DWP update on starting bank accounts checks for 3 benefits | Personal Finance | Finance
The DWP has issued an update on when it intends to start to use new powers to request bank accounts details of people on three benefits.
New powers as part of a bill making its way through Parliament will allow investigators to require banks to hand over details of accounts held by people on certain benefits.
Investigators will check the financial details of claimants to make sure those receiving certain benefits are entitled to do so, as part of the Eligibility Verification Measure part of the new legislation.
The powers will initially be used to check the eligibility of those on Universal Credit, Employment and Support Allowance and Pension Credit, although this could be expanded to other benefits.
The bill to prevent fraud and error in the benefits system and among other public authorities has been approved by the House of Commons and is now being considered by the House of Lords.
As the measures move through the process towards becoming law, the DWP was asked for an update on when it would use the new eligibility check powers.
The department said it can’t use the powers before they are given Royal Assent, the final stage when the King signs off a new law coming into effect.
But officials also said they expect to start using the verification checks in 2026/2027. The DWP said this will begin with an initial test of the measures to see how well they work.
A DWP spokesperson said: “We are bringing forward the biggest fraud crackdown in a generation, as part of wider plans that will save £9.6billion by 2030.
“We are absolutely clear that we will not tolerate any waste as we protect taxpayer’s money, ensuring people get the money they are entitled to, and so we can invest in our public services as part of our Plan for Change.”
The bill also includes powers which will allow investigators to directly take funds from a person’s bank account where they owe an amount and are refusing to pay up.
In such a case, officials will have to request at least three months of bank statements for the relevant bank account, to make sure they have the funds available to pay the amount.
These deductions can be taken in instalments or in a lump sum, depending on how much is owed and how much the person has available.
DWP ministers previously said that these measures are necessary for recovering funds from a previous claimant who no longer receives benefits.
At present, the DWP can only recover funds through PAYE deductions or by making deductions from a person’s benefit award if they are still a claimant.
