DWP bank account deductions alert over claimants being ‘wrongly identified’ | Personal Finance | Finance
Major new powers for the DWP to directly take funds from benefit claimants’ bank accounts could target the wrong people. Fresh measures set to come in under new legislation would allow officials to directly deduct an amount from a person’s bank account, where they owe the DWP cash and are refusing to repay the amount.
The funds can be taken as a lump sum or in regular instalments. Investigators will notify the person ahead of taking the amount and will also have to request at least three months of bank statements for the account, to check they have the funds available.
Martin Hartley, group CCO of business consultancy emagine and member of the Bank of England decision maker panel, said there needs to be proper checks in place so people are not wrongly targeted.
He warned: “Without careful oversight, there is a danger that individuals could be wrongly identified as having received overpayments, or that funds could be incorrectly deducted from bank accounts. To prevent these risks, verification processes must be robust.
“Ensuring proper checks and balances is critical not only to protect claimants from undue financial harm but also to maintain public confidence in the integrity of the benefits system.” The bill, which is currently being considered by the House of Lords, also includes bank account checks for people on certain benefits.
These will initially be used to check the accounts of those claiming Universal Credit, Employment and Support Allowance and Pension Credit, to make sure claimants are eligible for their payments. The legislation mandates that there will be an independent person appointed to oversee the use of the powers.
They will assess if the powers are being used correctly and if they are effective in preventing incorrect payments and in recovering owed funds. Mr Hartley spoke about what can cause errors in benefit payments.
He said: “Errors in overpayments or underpayments often stem from a combination of factors. This includes outdated or incomplete claimant information and delays in reporting changes.
“The combination of data sharing limitations and poor quality data creates inaccuracies as without clean data, systems can’t perform effectively.” He said there should be better verification checks to help prevent this.
The expert said: “To address these issues, there should be greater automation and real-time data verification between departments and financial institutions, supported by modern digital infrastructure. Simplifying the benefits system and providing clearer guidance for claimants would also reduce the likelihood of mistakes.
“Investing in staff training and ensuring claimants know they can easily update their information would go a long way towards improving accuracy and fairness across the system.”
A DWP policy document introducing the new legislation said: “The bill will modernise DWP’s powers to ensure money spent is reaching those who need it, and not those who exploit the system.
“This will result in more money being recovered, more robust action being taken against those who attack the system, and an increased deterrent to potential fraudsters. The powers contained in this bill to address overpayments in the social security system will be tough on criminals and fair for the taxpayer – and DWP claimants – that money in the public sector is spent wisely and effectively.”
