NON-national dole cheats defrauded millions of euro from the Exchequer by flying into the country once a month to sign on.
In a first trawl of suspected benefit fraudsters, 776 non-national cases were examined, of which 76 were found to be permanently living outside of the State.
Officials were so alarmed they ordered residency checks on a further 3,665 non-nationals, and found that 403 (11pc) of these were living outside the State and flying in once a month to collect their benefit.
The vast majority of the claimants were from Eastern European countries.
Both investigations between them yielded savings of more than €4m -- or up to €10,000 per dole cheat -- for the cash-strapped Exchequer.
The fraudsters had been getting the cash wired to bank accounts in Ireland, while flying here once a month to sign on at their local dole office.
Even with the deduction of flight costs, each claimant took home nearly €1,000 a month.
The revelation raised questions about the full extent of the fraud, which has still to be fully quantified.
Urgent nationwide residency checks were introduced for all non-Irish claimants on jobseekers' benefits after evidence of the widespread fraud became apparent last year.
The revelation comes as gloomy new figures confirmed that record numbers are now signing on the Live Register.
The Central Statistics Office confirmed almost 200,000 people lost their jobs last year.
Unemployment has soared to a 13-year-high, with a total of 413,500 signing on the dole.
This is a 92pc rise on last year, and more than two-and-a-half times the number of jobless compared to the same period in 2007.
Taoiseach Brian Cowen yesterday gave his strongest hint yet that social welfare payments will be hit as the Government attempts to claw back up to €5bn in savings identified by An Bord Snip Nua, the state agency tasked with balancing the Budget books.
"We need €72m a week to maintain the current level of services.
"The Government is not in a position ad infinitum, or over the short term, to maintain that level of deficit," Mr Cowen said.
"Look at what people in employment must face in terms of reduced pay, increased levies or taxes, or the various policies we have had to implement," he added.
The Government is also set to continue its clampdown on benefit fraud and 'welfare tourism' as it desperately seeks to cut the soaring welfare bill.
The anti-fraud drive involved a home visit to check residency within six weeks of the first signing on day. These were followed up by further visits at between six and eight months and at one year.
The frequency of the visits was varied so as not to establish a predictable pattern.
"In response to the findings of these initial checks, it was considered that a more targeted control approach to residency was required," a spokesman for Social Welfare Minister Mary Hanafin told the Irish Independent.
In view of the scale of scamming, the department decided from last July 2008 not to make electronic fund-transfer payments method available to new claimants.
They are now paid weekly to a post office of the claimant's choice.
This means that claimants must attend the post office weekly to collect their payment, and bring a photo ID, such as a passport, when signing for receipt of the cash.
From March this year, stricter identity checks were introduced in post offices for people collecting social welfare payments.
Meanwhile, border regions have put an increased emphasis on controls on claims from applicants with a previous address in Northern Ireland.
The frequency of issue of mail shots to validate continued entitlement to child benefit has also increased to one every three months for all non-nationals, the department said.