Investigators will contact bank providers to get information about claimants
The DWP has new powers to request bank account information for benefit claimants(Image: Getty)
Sweeping new powers are being introduced to tackle fraud within the DWP benefits system. Legislation now in place will enable investigators to demand bank account information for accounts connected to benefit payments.
Officials have also been granted the authority to recover funds directly from a person’s bank accounts should they owe money to the DWP and refuse to repay it. Fraud investigators are also being equipped with greater powers to compel people to hand over information. Among the new measures are eligibility checks, whereby banks will be approached by the DWP to provide details on accounts tied to specific benefits. These checks will initially be applied to those claiming Universal Credit, Employment and Support Allowance and Pension Credit.
Nevertheless, the legislation indicates that this could be extended to cover additional benefits. Banks will be required to flag any accounts that may be ineligible to receive payments and forward the relevant details to the DWP for further investigation.
The DWP has confirmed that it will not have direct access to individuals’ bank accounts under the new powers. Officials will begin utilising these powers following a consultation period, and once several codes of practice for the new measures have received parliamentary approval.
A ‘test and learn’ phase will also be implemented during the rollout of the powers, to ensure they are deployed appropriately. Security experts have stressed the importance of ensuring these new measures are applied correctly.
‘Incorrect rejections’
Stuart Morris, chief technology officer at compliance technology provider SmartSearch, said: “There is a risk that some claimants could feel anxious about the introduction of these powers, even when they have provided accurate information, because any system involving increased monitoring or automated checks can create concern if people don’t fully understand how decisions are made.
“Research shows that automated systems can flag legitimate cases as suspicious if they’re not properly calibrated. The challenge for the DWP is ensuring their systems are accurate enough to catch fraud while minimising incorrect rejections of genuine claimants.”
A DWP spokesperson said previously: “We have an obligation to protect public funds, with this legislation set to save the taxpayer £2.1billion over the next five years, part of wider plans that will save £14.6billion. The legislation includes an eligibility verification measure which will require banks to share limited data on claimants who may wrongly be receiving benefits. It does not involve access to benefit claimants’ bank accounts.”
Direct deductions from bank accounts
The new legislation also grants DWP officials powers to directly withdraw funds from an individual’s bank account. This action will only be taken when someone has an outstanding debt to the department and is refusing to repay the sum.
These newly introduced direct deduction powers are designed to recoup funds from individuals who have left the benefits system. Previously, the DWP was limited to recovering debts solely through benefit deductions or from a claimant’s PAYE earnings.
Where investigators intend to deploy these powers, they will first reach out to the person concerned, giving them an opportunity to challenge the matter. They will also contact the relevant bank to request a minimum of three months’ worth of bank statements, to ensure the person has sufficient funds available.
As part of this package of new measures, fraud investigators have also been granted expanded powers. Where previously they were restricted to demanding information from a limited list of sources, they can now approach any third party connected to a suspect to obtain the necessary details.
Mr Morris said it’s important to have proper transparency and communication about the use of the new powers. He urged: “Claimants should know what information is being checked, why it’s being checked, and what safeguards are in place if errors occur. Independent oversight, fast appeals processes, and the use of multiple trusted data sources can all help minimise false positives and prevent innocent people from being unfairly penalised.”
The legislation stipulates that an independent individual will be appointed to oversee the exercise of these powers. They will be tasked with ensuring the measures are only used when appropriate and that they are used effectively.
