The Department for Work and Pensions (DWP) will now have the authority to monitor bank accounts and recover funds from individuals who have more than £16,000 in savings while claiming benefits. This new measure is part of a government crackdown on benefits fraud.
New Powers for the DWP
The government has enacted legislation granting the DWP enhanced capabilities, including the power to search properties, seize items, and directly withdraw money from bank accounts. Even those not currently receiving benefits or in PAYE employment could be subject to these actions.
Impact on Universal Credit Claimants
Universal Credit, the most common benefit besides pensions, requires claimants to have no more than £16,000 in savings to be eligible. Those with savings between £6,000 and £16,000 see their payments reduced by £4.35 for every £250 held, with additional reductions for remaining amounts.
The DWP stated: “New requirements for banks and building societies to flag where there is an indication that there may be a breach of eligibility rules for benefits – preventing debts accruing.”
Targeting Fraudulent COVID Loans
The new laws also aim at individuals who fraudulently obtained COVID support loans. The time limit for recovering such loans has been extended from six to twelve years.
Secretary of State for Work and Pensions, Liz Kendall, commented: “We are turning off the tap to criminals who cheat the system and steal law-abiding taxpayers’ money. This means greater consequences for fraudsters who cheat and evade the system, including as a last resort in the most serious cases removing their driving licence. Backed up by new and important safeguards including reporting mechanisms and independent oversight to ensure the powers are used proportionately and safely.”
