That is what happened to Cait Riley, so she took the government to court and has won on appeal.
But hang on. She was getting JSA and probably Housing Benefit, as well as Council Tax relief, so hardly working for nothing. If everything is taken into account as 'money' then she was being paid, but at a rate a lot less than min wage. Therein lies a big problem, or problems.
It is illegal to employ someone on less than min wage, that applies to government as well. It is also in the rules that someone unemployed cannot work more than a few hours otherwise they are deemed to not be looking for work. The scheme broke that rule. The scheme also allowed commercial businesses to have free labour - at tax payers' expense. For every 1.5 people taken on free a job available to the unemployed was lost.
The whole thing is a sorry mess, but that's what politicians do for us.