Officials will check the bank accounts of millions of claimants
The DWP is getting major new powers to check the bank account details of people on certain new benefits. Officials will order banks to hand over information about accounts linked to Universal Credit, Employment and Support Allowance, and Pension Credit. The checks are intended to make sure those receiving these benefits are eligible for their payments.
Also under the new measures, investigators will be able to directly take an amount from a person’s bank account if they are owe cash and are refusing to pay up. Officials will have to request at least three months of bank statements for the account, to make sure they have the funds available.
The amount can be deducted as a lump sum or in regular instalments. Siobhan Blagbrough, financial crime manager at Ocean Finance, said the new legislation show the DWP “is clearly trying to crack down on benefit fraud and stop money falling into the wrong hands”.
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But she said there are concerns that people could be wrongly identified as owing cash. She said: “If someone is genuinely cheating the system then spotting issues faster is a good thing. But these powers are not risk free.
“Innocent people could get swept up in this and suddenly find the money they rely on blocked or taken away. Most people who claim benefits are just trying to get by.
“A missed update about earnings or a small admin mistake should not lead to someone losing the cash they need to pay for food or rent.” The DWP has confirmed that with the eligibility checks, it will not have access to people’s bank accounts.
A previous policy document from the Government explains: “DWP will require banks and other financial institutions to examine their own datasets and provide data to help identify where someone may not be meeting the specific eligibility criteria of a benefit through issuing ‘Eligibility Verification Notices’. DWP will then use the information received, along with other information held on the claimant, to determine whether further inquiry is needed.”
An independent person will also be appointed to oversee the use of the powers in the bill, to ensure they are effective in their purpose and used only when necessary.
Debt letters arriving out of the blue
However, Ms Blagbrough warned some may still feel the new powers are a step too far. She said: “The DWP says they will not be poking through people’s full bank statements or judging how they spend their money. Even so this will feel intrusive to many.
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“Someone could have their account flagged even when they have done nothing wrong at all. That could mean stressful investigations, payments paused, and debt letters arriving out of the blue.
“People should not have to fight to prove they are innocent when their only crime was being poor or confused by a complicated system.” In announcing the new legislation in January 2025, then Work and Pensions Secretary, Liz Kendall, said: “We are turning off the tap to criminals who cheat the system and steal law-abiding taxpayers’ money.
“This means greater consequences for fraudsters who cheat and evade the system, including as a last resort in the most serious cases removing their driving licence. Backed up by new and important safeguards including reporting mechanisms and independent oversight to ensure the powers are used proportionately and safely.
“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.”
