Former Federal Liberal MP Alex Somlyay says he did nothing wrong by using his taxpayer-funded budget to employ his wife to work from home.

Fairfax newspapers say Mr Somlyay's wife was paid tens of thousand of dollars for work in the Maroochydore electorate but that she was never seen in the office.

The former MP says his wife is a qualified researcher and there was nothing illegitimate about her employment.

"Jenny, my wife, was employed by me under the relief budget - which was within the rules," he said.

"It is true that she worked from home, which was part of the workplace agreement which she signed. She did the work and she got the pay."

Mr Somlyay says he is considering legal action following the Fairfax story.

"I am having a look next Friday with my legal representatives to find out whether there's a case for defamation," he said.

"I mean, they have accused me of fraud."

The Australian Federal Police says it is "currently assessing available information to determine whether a potential Commonwealth criminal offence has been committed".

Allegations will be investigated if complaint made: Pyne

Federal Government frontbencher Christopher Pyne says the allegations will be investigated if a complaint is made.

He says the Government has a policy of not allowing MPs to employ family members.

"I'm sure if there's any wrongdoing it will be pursued by the appropriate authorities, I guess, if somebody lays a complaint," he said.

"I understand that no-one's done that."

Palmer United Party Leader Clive Palmer says it is unethical for MPs to employ family members.

"I don't think it's a slight legal point, I think it's a question of what's the right thing to do," he said.

"I think the expectation of most people would be that you don't employ your own in your own office with public money."

Queensland Premier Campbell Newman has declined to comment on the reports, but says all MPs should be held accountable.

"I've always had a standard in my team that it's not at all preferable to employ family members," he said.

"I'm not saying it's never happened in my Government, there've been some instances, but our standard is one where we don't encourage it.

"The Labor Party, by the way, do it all the time."