Major changes to the law will mean DWP officials carrying out sweeping checks of benefit claimants’ bank accounts. A bill is making its way through Parliament which includes eligibility checks, where investigators will order banks to hand over account details for those claiming certain benefits. The measures will initially be used to check the details of the millions of people on Universal Credit, Pension Credit and Employment and Support Allowance. But the legislation states that this could be extended to other benefits.
George Kampanella, head of business crime and regulatory at law firm Taylor Rose, said: “This legislation could offer a major step forward in improving how Government departments can verify the eligibility of claimants and use anti-fraud tools to identify fraud cases and recover funds.”
He spoke about how the new measures could help recoup lost funds: “By enabling secure and lawful data sharing, the initiative could vastly improve fraud detection, eligibility verification, and the recovery of public funds. For the Department for Work and Pensions (DWP), it would provide more practical powers and access to tools that enable efficient, targeted recovery, reducing delays and increasing accuracy.
“The ability to verify income and savings directly could vastly improve the accuracy of benefit payments and reduce overpayments, particularly in cases like Universal Credit, where changes in circumstances often go unreported.”
The legislation also includes powers for officials to directly take an amount from a person’s bank account, in cases where a person owes the DWP cash and is refusing to pay up despite being requested to do so. In these cases, the department willhave to request at least three months’ bank statements for the person’s account, to make sure they have the funds available.
Officials can deduct the amount in one lump sum or in instalments. The DWP can currently recover owed amounts through deductions from a person’s benefit award, or through PAYE.
The DWP said previously the new bill woud help recover £1.5billion in funds. A Government document introducing the bill explains: “The bill will modernise DWP’s powers to ensure money spent is reaching those who need it, and not those who exploit the system.
“This will result in more money being recovered, more robust action being taken against those who attack the system, and an increased deterrent to potential fraudsters. The powers contained in this bill to address overpayments in the social security system will be tough on criminals and fair for the taxpayer – and DWP claimants – that money in the public sector is spent wisely and effectively.”
Mr Kampanella spoke about how the measures in the bill could be used more widely. He said: “The opportunity for wide-ranging application and departmental crossover is also significant.
“HMRC could benefit from enhanced fraud detection, supporting more accurate and timely identification of fraud and tax evasion, while also improving customer service through better data integration. Beyond HMRC, departments such as the Home Office and the Department for BEIS [Business, Energy & Industrial Strategy] could benefit from streamlined case management, faster eligibility checks, and improved policy targeting.”
He added that the changes that the powers must be carefully designed to avoid overreach and to protect people’s rights. The bill outlines that an independent person will be appointed to oversee the use of the measures, to make sure they are used properly and are effective in achieving their purpose.