DWP bank account 'monitoring' start date to combat benefit fraud

The UK Government is vowing to introduce 'the biggest fraud crackdown in a generation' in a bid to save large sums slipping fraudulently out of the welfare system. The Department for Work and () says the Public Authorities (Fraud, Error and Recovery) Bill could save taxpayers around £1.5 billion over the span of five years.

They are planning to slap persistent benefit cheats with driving bans of up to two years if they fail repeatedly to pay back money they owe, and could even take money directly from the bank accounts of fraudsters. On top of that, a new scheme called Eligibility Verification is being introduced, letting third parties like banks alert the DWP to dodgy benefit claims.

The DWP has issued an 11 in-depth factsheets on how the measures will be brought into play. The government intends to implement the new plans by 2026, reports .

The papers look at the safeguards and other measures designed to guarantee the "appropriate, proportionate, and effective use of the powers". The says: "The Government will begin implementing the Bill measures from 2026. For the Eligibility Verification Measure, the Government will implement a 'test and learn' approach to ensure the new powers to tackle public sector fraud are being used proportionally and effectively.

"DWP and the Cabinet Office will continue to work with industry to implement the new measures, consult stakeholders on Codes of Practice and publish guidance."

The DWP is ramping up its verification process for benefit claims. Officials will be able to get more information from third-party organisations like airlines in a bid to ensure no one is bending the rules by claiming benefits from overseas.

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Eligibility verification measure

The DWP says it won't have direct access to the bank accounts of millions on means-tested benefits such as , Pension Credit, and Employment and Support Allowance. Instead, the DWP says it will team up with banks to identify claimants who might be flouting the eligibility rules for means-tested benefits - like earning over the £16,000 cap for Universal Credit - and use this information to probe potential overpayments or fraud.

The law aims to strictly define what data banks and other financial institutions can share with the DWP, with officials saying it explicitly rules out transaction details so that the DWP can't track how benefit recipients spend their money. Furthermore, the factsheet says banks and financial institutions could face penalties if they overshare information, such as transaction data.

Additionally, the document notes: "Any information shared through the Eligibility Verification Measure will not be shared on the presumption or suspicion that anyone is guilty of any offence."

New DWP measures to tackle fraud

The forthcoming Bill is designed to guarantee that taxpayer money is put to the best possible use:

• New requirements for banks and building societies to flag where there is an indication there may be a breach of eligibility rules for benefits in a bid to prevent debts building up.
• All the powers will, the DWP says, include strong safeguards to ensure they are only used appropriately and proportionately - including new inspection and reporting mechanisms.
• Allowing DWP to recover debts from people no longer on benefits and not in PAYE employment who can pay money back but have avoided doing so.
• New powers of search and seizure - so DWP can control investigations into criminal gangs defrauding the taxpayer.
• DWP will, they say, have a clearly defined scope and clear limitations for the use of all the powers it is introducing, and staff will be trained to the highest possible standards.

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DWP officials say the provisions in this Bill will also empower the Public Sector Fraud Authority to:

• Use new powers of entry, search and seizure to reduce the burdens on the police in the most serious criminal investigations.
• Better detect and prevent incorrect payments across the public sector through new information gathering and sharing powers.
• Reduce fraud against the public sector by using its expertise to take action on behalf of other departments against those who attack the public sector.
• Use strong non-criminal sanctions and civil penalties to provide an alternative to criminal prosecution and to deter fraud.
• Improve the government’s ability to recover public money, through new debt recovery and enforcement powers.
• Improve fraud management in future emergencies by creating specialist time limited powers to be used in crisis management situations - building on lessons learned during COVID-19.