The Department for Work and Pensions (DWP) has provided new details on recently approved powers that will allow officials to scrutinise the bank accounts of individuals receiving state benefits.
What Are the New Eligibility Verification Measures?
Under the new legislation, which comes into force this year, the DWP will require banks and other financial institutions to provide data on accounts linked to people claiming specific benefits. The primary aim is to verify that claimants are genuinely entitled to the payments they receive.
Initially, these checks will focus on three key benefits: Universal Credit, Pension Credit, and Employment and Support Allowance. The DWP has stated there are "no current plans" to extend the checks to other benefits, though the legislation does allow for the scope to be broadened in future.
A DWP spokesperson emphasised the purpose, stating: "We have an obligation to protect public funds, with this legislation set to save the taxpayer £2.1billion over the next five years." This forms part of wider government plans to save £14.6 billion.
How Will Personal Information Be Used?
Officials have moved to clarify how personal data will be handled under the new regime. The process will require banks to review their own customer data to identify accounts receiving one of the three targeted benefits.
Crucially, the DWP confirmed that "no personal information will be shared by DWP" with the banks to assist in this process. Instead, financial institutions will use their internal systems to flag accounts where the holder "may not be meeting specified eligibility rules." The department stresses this does not equate to granting DWP officials direct access to claimants' bank accounts.
Broader Powers to Recover Funds and Combat Fraud
The Eligibility Verification Measure is just one part of a larger legislative package designed to tackle fraud and error across the benefits system and other public bodies.
A significant new power is the direct deduction order. This will enable investigators to take money directly from a person's bank account if they owe money to the DWP and are refusing to repay the debt. The individual will receive an advance warning before any funds are seized.
These powers are intended to help recover funds from people who have left the benefits system but still have outstanding debts. Previously, the DWP could only reclaim money through deductions from ongoing benefits or via PAYE earnings.
To target organised criminal gangs, the new laws also grant investigators powers to:
- Conduct property searches.
- Confiscate items.
- Issue new information notices to compel anyone connected to a fraud investigation to provide necessary details, significantly widening the net beyond a previously restricted list.
The DWP described the rollout as a "test and learn" process, allowing time for businesses to establish the best procedures for implementing these checks.
