DWP update on powers that will allow 'monitoring' of Brits' bank accounts
The Fraud, Error and Recovery Bill is set to come into effect from 2026, with the measures expected to save a total of £1.5 billion of taxpayers' money over the subsequent five years. The bill aims to crack down on benefit fraudsters.
These new powers are part of a series of measures Labour claims will constitute the "biggest fraud crackdown in a generation." Further details have been provided on the DWP's plans to closely monitor people's bank accounts.
Under the changes, benefit fraudsters could face driving disqualifications for up to two years if they refuse all opportunities to repay the money they owe, reports the Liverpool Echo.
Currently being debated in the House of Lords, more details on how these powers will work have been revealed by Baroness Maeve Sherlock, a minster of state for the DWP.
The key power that will enable the DWP to request banks to share financial information with its agents is called the Eligibility Verification Measure.
The DWP will be able to gather information from more third-party organisations such as airlines to check if people are claiming benefits from abroad and potentially violating eligibility rules.
The financial department will not have direct access to the bank accounts of millions of people on means-tested benefits including Universal Credit, Pension Credit and Employment and Support Allowance.
The Department for Work and Pensions will identify people who may have exceeded the eligibility criteria for means-tested benefits, such as the £16,000 income threshold for Universal Credit. If a person is identified, the department will then investigate that claimant to prevent possible overpayments and potential cases of fraud.
The legislation only allows banks and other financial institutions to share limited data and excludes the sharing of transaction data. This means DWP will not be able to see what people are spending money on.
A DWP factsheet states: "Any information shared through the Eligibility Verification Measure will not be shared on the presumption or suspicion that anyone is guilty of any offence. Banks and other financial institutions could receive a penalty for oversharing information, such as transaction information."
Baroness Sherlock outlines that the information the institution can be asked to share includes information about the account holder, including their name and date of birth. Agents can also ask for the bank account's sort code and account number, as well as details about how the account meets eligibility.
Ministers say the government is introducing these powers to be able to determine if an individual is eligible for a benefit they are claiming or have applied for based on their financial position.
Baroness Sherlock has said the measures will be implemented over 12 months, in a "phased approach" and work with a small number of banks initially. Based on its usage by HMRC and the Child Maintenance Service, Baroness Sherlock says DWP estimates it will make between 5,000 and 20,000 Direct Deduction Orders every year.
A DWP spokesperson told The Independent: "Our Fraud, Error and Recovery Bill includes an Eligibility Verification Measure which will require banks to share limited data on claimants who may wrongly be receiving benefits – such as those on Universal Credit with savings over £16,000.
"As well as tackling fraud, the new powers will also help us find genuine claim errors sooner, stopping people building up unmanageable debt. This measure does not give DWP access to any benefit claimants' bank accounts."
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