The government will tell up to 70,000 jobseekers that they must work unpaid for four weeks or lose their benefits for three months under an expansion of the mandatory work activity programme.

Employment minister Chris Grayling said the Department for Work and Pensions (DWP) would also tighten up rules to stop jobseekers from "gaming the system" – evading mandatory placements by temporarily signing off the dole – after it found up to half of those assigned mandatory work had done just that.

Introduced in May last year, mandatory work activity requires claimants to carry out up to 30 hours unpaid work a week for up to four weeks for community benefit in an attempt to get jobseekers back into the habit of work.

Before the scheme started, the DWP told parliament that 10,000 jobseekers a year were expected to be sent on such placements, but figures released on Tuesday show more than 49,000 jobseekers have been referred to the scheme in its first 10 months.

Month-on-month referrals to the scheme, which are decided by jobcentre staff, are understood to outstrip those to the government's own flagship, but voluntary, work experience scheme.

Figures also reveal only 16,790 have actually started mandatory placements; the DWP says 46% of jobseekers either signed off benefits or failed to turn up rather than start the placement. The figures show that 2.4 times more men than women were being sent on the placements.

Grayling said he would be spending £5m on expanding the scheme to increase placement numbers by 9,000 and he would tighten up rules later this year to stop jobseekers from signing off before placements and then returning to the claims office weeks later to avoid doing mandatory placements. "People need to be aware that, for those who are fit enough to work, it is simply not an option to sit on benefits and do nothing.

"We've found that a month's full-time activity can be a real deterrent for some people who are either not trying or who are gaming the system. But we're also fighting a battle to stop claimants slipping back into the benefits system by the back door."

"That's why for the extended roll out of mandatory work activity, we will toughen up the sanctions regime and make sure that anyone reclaiming jobseeker's allowance will have to complete a full placement or face a further sanction."

Liam Byrne MP, the shadow work and pensions secretary, said the expansion of the scheme would do little for the ranks of unemployed in the long run.

"This announcement does nothing for 99% of Britain's jobless. There are 2.6 million out of work in Britain. This announcementwill help just 9,000."

"If this government is serious about tackling Britain's unemployment emergency, they would stop tinkering around the edges and bring in Labour's Real Jobs Guarantee, to get 110,000 young people back to work – paid for by a tax on bankers bonuses."

Lee Sproat, 25 from Norfolk, said he had resisted doing a mandatory placement at the British Heart Foundation late last year, but in hindsight believed that it had improved his chances of finding his part-time job as a display sales person in Norwich.

"I was so against doing it to start with. I'd even drawn up a letter to the local MP … It was difficult to come to grips with having to do it, but retrospectively I did come out with a good letter of recommendation – which I had to ask for - and it did help me get the current job that I'm in now.

"The interviewer was quite impressed, [with] the fact that I'd done the voluntary work. [But] I didn't say, 'oh it was mandatory voluntary work'… but it was very postively taken at the interview."

Tony Wilson, director of policy at the Centre for Economic and Social Inclusion said that leaving benefit wasn't the same as getting a job.

"The government said last year that around 10,000 people a year would be referred to mandatory workfare. But today's figures show that more people are now being referred to this than to their flagship work experience programme.

"If some of those people were already working while claiming benefit, then that's fraud … and needs to be dealt with properly.

"However, the evidence suggests that fraud is not prevalent in jobseeker's allowance – indeed the government's own estimates are that there are more cases of mistakes by officials than of fraud by claimants.

"If people are leaving benefit for paid work, then that's a clear success. But if people are signing off, or having their benefit stopped, and not going into work, then we need to make sure that they don't end up even further away from the support that they need to get a job.

"The government's own research suggests that the evidence on workfare is mixed at best, with little sign that it increases the chances of finding paid work. So we need to really understand what's going on with these numbers before we rush to spend more money on it."