The Department for Work and Pensions could soon be granted new powers to look at the financial transactions of those claiming benefits
A disability advocate charity has warned of the potentially negative impacts of proposed new powers that could authorise the Department for Work and Pensions (DWP) to scrutinise bank accounts. Currently under debate in the House of Lords, the Data Protection and Digital Information Bill may endow the DWP with enhanced capabilities to investigate financial dealings of benefit recipients.
At present, the government department can only access a person’s transaction details given reasonable suspicion of fraud. As per official stats, the welfare system saw losses due to fraud and error totalling £8.3 million in 2022/23.
It is up to claimants to alert the DWP to any changes that might affect their benefits eligibility. However, the new bill dictates banks and building societies would be compelled to provide the DWP with data for all accounts into which benefits are paid.
Despite this, Disability Rights UK has issued a stark warning that this move might unfairly target those receiving disability allowances. Mikey Erhardt, policy officer at the organisation, stated: “These powers are a sledgehammer to crack the tiniest nut.”
He further criticised the proposals: “These new powers would see disabled people deprived of the presumption of innocence, adding to the victimisation we already face in a punitive welfare system that often seeks to sanction people into work.”
Meanwhile, legal advice given to Big Brother Watch raised concerns over the reach the powers would provide the DWP. Dan Squires KC and Aidan Wills of Matrix Chambers, who issued the legal advice, said: “It is clear that the purpose of the new proposed powers is to carry out monitoring of bank accounts where there are no ‘reasonable grounds’ for believing a particular individual has engaged in benefit fraud or has made any mistake in claiming benefits.”
They added: “There are real doubts about whether the exercise of the powers would be proportionate if they were used for detecting mistakes in claims made by people in receipt of benefits or the DWP’s own errors in payment of benefits.”
Meanwhile, DWP minister Andrew Western explained further details around the proposed powers. He told MPs: “More than 50 per cent of the fraud and error that we see in Pension Credit comes from two principle sources, which the eligibility verification measure specifically seeks to address. One is the issue of capital fraud, where there is a relatively easy indicator.”
Mr Western shed light on the vital role of bank checks, which include monitoring travel patterns to identify if individuals have exceeded the permitted time abroad which might lead to them being ineligible for benefits. He continued: “The provision also has the benefit of helping us to establish when somebody has been out of the country for longer than their benefit entitles them to be.
“For instance, it would provide a flag on an account when somebody’s bank account suggested they had been making purchases abroad and so on.”
He continued: “We would not receive the transactional data or know specifically where the purchases were made but it would give us specifically the date that somebody left the country, and thereby show whether they were in breach of the length of time they are allowed to be away.”
Green Party representative Sian Berry also raised concerns over particular elements of the bill which could impact verification methods, warning: “These powers will drag nearly 10 million people directly into a net of intrusive financial surveillance, as well as those appointed to receive benefits on their behalf, including parents, carers, appointed people and landlords.”
Berry further highlighted: “Given that several of these benefits have eligibility requirements based on household income, we are bringing in family members as well.”
