DWP reveals exact amount in bank accounts to perform checks for 1 benefit | Personal Finance | Finance
The Government is looking to clampdown on benefit fraud and erroneous overpayments. (Image: Getty)
Banking providers may have to flag the accounts of some benefits recipients if their bank balance rises above a certain level, under new legislation. The Eligibility Verification Measure (EVM), created under the recently passed Public Authorities (Fraud, Error and Recovery) Act, is designed to allow the Department for Work & Pensions (DWP) to improve the way the department uses data to detect and prevent fraud and error in the social security system and address it more quickly.
Under the new measures, the department will require banks and other financial institutions to examine their own datasets and provide data to the DWP to help identify where someone on means-tested benefits may not be meeting the specific eligibility criteria of a benefit through by issuing Eligibility Verification Notices, as reported by Chronicle Live.
This includes checking bank accounts to make sure people are eligible for the money they are claiming, and flagging ones that rise above certain balance thresholds, depending on the type of support.
Explaining the justification for these Eligibility Verification Notices (EVNs) and how they will work, in a public consultation document published in December, Government said: “Where possible, DWP uses different sources of data to verify the information provided by claimants to ensure their benefit entitlement is calculated correctly.
“For example, DWP uses data from HM Revenue and Customs to verify information about Pay As You Earn (PAYE) employment and income that can affect benefit eligibility and entitlement.
“However, for other eligibility criteria – such as savings or investments held – such information is not readily available in a timely fashion. That can mean that benefits may be overpaid due to either fraud or error, which can lead to the build-up of debt for the claimant and losses to the taxpayer.”
It says EVMs will “improve DWP’s access to important data to help verify entitlements, ensure payments are correct, prevent the build-up of overpayments and prevent debt from accruing” as well as helping to reduce fraud and identify error, including those made without ill-intent.
Benefits being looked at under the clampdown will initially include Universal Credit, Pension Credit and Employment and Support Allowance eligibility.
The Government explains that eligibility indicators in the notice “are the specific criteria that financial institutions will be asked to check relevant accounts against”.
“They will be based on the eligibility rules for the specified benefits and therefore may differ for each benefit in scope.” It cites Universal Credit as an example, which precludes anyone with more than £16,000 in savings from remaining eligible, unless this money is a result of a specified exception.
The Government doesn’t appear to have laid out exact thresholds for all benefits at this time, though it may well follow existing savings limits.
However, it stresses that rules expressly forbid providers sharing information certain information, such as transaction information and special category data (highly protected personal information) and may be penalised for doing so.
According to DWP estimates the overall level of overpayments due to fraud and error was almost £10billion in 2024 to 2025.
Meanwhile £45billion has been overpaid in the social security system since the pandemic (measured from 2020 to 2021) as a result of fraud and error. It’s hoped the measures will save billions in the years ahead.
Its expected the that measures will be implemented from this year, following the publishing of the Codes of Practice associated with the powers.
You can find a more detailed breakdown of the measure on the Government website.
