DWP names the 3 benefits to be first to face new bank account checks | Personal Finance | Finance
People claiming three specific benefits will be the first to undergo new bank account checks in a bid to prevent fraud, the DWP has announced. The new Eligibility Verification Measure, part of the Public Authorities (Fraud, Error and Recovery) Bill, is set to be implemented in 2026.
This move is part of the DWP‘s strategy to save £8.6billion over five years by cracking down on benefit fraud. Government documents read: “In the social security system, overpayments from fraud and error currently cost the taxpayer almost £10billion a year and, since the pandemic, a total of £35 billion of taxpayers’ money has been incorrectly paid to those not entitled. Outside the social security and tax system at least £3 billion is being lost to fraud and error per year.” The legislation grants the DWP new powers allowing it to ask banks and other financial institutions to cross-check benefit claimants’ accounts against “specific eligibility indicators.”
These indicators will be based on the rules people must meet to qualify for benefits, such as the £16,000 capital limit for being entitled to Universal Credit, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, Income Support, and Housing Benefit – if you are under State Pension age, reports Chronicle Live.
This means that claimants cannot have more than this total amount across all their savings or investments. If they exceed this limit, their claim is suspended until the amount falls below £16,000, according to BirminghamLive.
When a bank receives an eligibility verification alert, it will share relevant details with the DWP, including the sort code, account number, the account holder’s name and date of birth, as well as the eligibility indicators that have been triggered. According to the DWP: “The measure will initially focus on benefits where incorrect payments are currently highest.
“These are Universal Credit, Pension Credit and Employment and Support Allowance. Other benefits could be added with the approval of Parliament in the future through affirmative regulations. The State Pension is explicitly excluded from the power and cannot be added by regulations.
“When information obtained by DWP in response to an Eligibility Verification subsequently helps identify that a claimant is ineligible for a specified benefit, DWP may also use the information to verify the claimant’s eligibility for other benefits. For example, where a claimant is eligible for Pension Credit they may also be automatically eligible for Housing Benefit.
“If information received leads DWP to conclude that a claimant is ineligible for Pension Credit, then the Department will also review the claimant’s eligibility for Housing Benefit. A human will always be involved in any decision which may affect benefit awards or eligibility.”
The DWP also said: “The powers will not give DWP access to any claimants’ bank accounts, nor any information on how claimants spend their money.”