Officials will check the bank account details of millions of claimants
The DWP is getting new powers to directly take funds from people’s bank accounts(Image: Getty)
Fresh powers are being introduced to prevent fraud and incorrect payments within the DWP benefits system. New legislation will soon be put on the statute books, enabling investigators to request the banking information of people claiming three benefits, to ensure they qualify for their payments. The checks will initially be applied to check the details of those receiving Universal Credit, Employment and Support Allowance (ESA) and Pension Credit.
Officials will also gain new powers to directly withdraw sums from a person’s bank account where they owe the DWP money and are refusing to repay the amount. These deduction powers are intended to be used in situations where a person has exited the benefits system.
The DWP can currently only recover funds through deductions from a person’s benefit claim or via PAYE. If officials wish to exercise the powers, they must request at least three months of bank statements for the bank account from which they will withdraw funds, to ensure sufficient cash is available in the account.
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Stuart Morris, chief technology officer at compliance group SmartSearch, said the new powers “have the potential to reduce fraud and error” and that they could be expanded further. He said: “Digital verification and cross-checking powers could be valuable across departments where identity and entitlement need confirmation, for example, HMRC, DVLA, or local authorities managing council tax support or social care payments.
“The same framework could streamline fraud prevention while reducing administrative burden.” When questioned about which benefits face the greatest risk of fraud, he said: “Benefits involving cash payments or those accessed digitally, such as Universal Credit, ESA, and Pension Credit, are often the most targeted. Systems that rely heavily on manual verification are particularly vulnerable.
“Robust digital ID and real-time cross-checking can reduce these risks, ensuring payments reach legitimate claimants efficiently.” Mr Morris suggested that more data sharing could also be brought in to complement the use of the direct deduction measures.
The DWP will get new powers to take funds from people’s bank accounts(Image: Getty)
He said: “Direct deductions can recover some funds, but they may not always reach people who have already exited the system or whose circumstances change quickly. Complementary powers could include data-matching with HMRC and payroll records, secure credit reporting checks, and using verified digital identities to maintain contact with former claimants.
“At SmartSearch, we use triple-bureau verification, which sources data from Experian, TransUnion and Equifax to reduce false positives, giving us the highest match and pass rate on the market.” However, the data expert emphasised it’s equally vital to have “strong safeguards” in place so people can be assured their data is handled appropriately.
The legislation requires that an independent person will be appointed to oversee the use of the powers. In announcing the new laws in January 2025, then Work and Pensions Secretary, Liz Kendall, stated: “People need to have confidence the Government is opening all available doors to tackle fraud and eliminate waste, as we continue the most ambitious programme for Government in a generation – with a laser-like focus on outcomes which will make the biggest difference to their lives as part of our Plan for Change.”
