Wildcard X Factor contestant Wagner Carrilho is understood to be having his incapacity benefit claim reassessed after his flamboyant performances on the hit talent show.
The long-haired Brazilian told producers of the ITV programme he was receiving the payments before he signed up.
A Department for Work and Pensions spokeswoman said: "We do not discuss individuals but we do reassess people regularly.
"Anyone who claims can be called in for an assessment if we feel circumstances have changed."
A source said it was likely that the controversial singer's claim would be looked at again in light of his on-stage antics.
But a spokeswoman for the programme said Carrilho had declared everything and had done nothing wrong.
She said: "Wagner declared to us that he was receiving benefits before he joined the show.
"We advised him to contact the benefits office regarding his taking part in X Factor, which he did. He was deemed physically fit to take part in the show."
X Factor judge Simon Cowell has described the former PE teacher's act as "the most bonkers ... I've seen in my life".
Fellow judge Louis Walsh said of him: "He may not be the best singer, but he is the most entertaining."