DWP update over when bank account checks will begin on three benefits | Personal Finance | Finance
Major new DWP powers are coming in to clamp down on benefit fraud including bank account checks for claimants. Laws were put on the books last year with a raft of new powers, empowering investigators to request banking information for people on certain benefits.
Officials will contact UK banking providers to order them to look over their records for accounts linked to certain benefits, to flag up any accounts that may not be eligible for their payments. The new legislation also grants powers to directly take an amount from a person’s bank account, if they owe the DWP an amount and are refusing to pay back the debt.
The eligibility checks will initially be used to check the details of those on Universal Credit, Pension Credit, and on Employment and Support Allowance. This could be extended to other benefits. Asked for an update on when the checks will start to be used, the DWP has confirmed they have not been put into use yet. Some key steps need to be completed first.
With the rollout of these bank account checks, the DWP is first running a ‘test and learn approach’ to try out using the new powers, which is due to start this year.
Prior to this, the DWP is currently working on code of practices for the use of the new powers. The DWP confirmed that “final versions of the codes of practice will be laid before parliament before any new powers can be used”.
The purpose of the direct deduction powers, where investigators will take a sum directly from a person’s bank account, is to target people who have left the benefits system and have an amount to pay back. Previously, the DWP could only recover funds through a person’s PAYE earnings or through deductions from their benefits.
If the DWP intends to use this power, they will contact the person to give them time to dispute the issue. Officials will also request three months of bank statements, to ensure the person has the funds available in their account.
The legislation also grants expanded powers for fraud investigators to request information when they are looking into a case. Previously, they could only order people to hand over information from a restricted list.
Now they can contact any third party associated with the person suspected of fraud, to mandate them to hand over the details they need. When the powers became law in December 2025, Andrew Western, minister for Transformation, said: “It is right that as fraud against the public sector evolves, the Government has a robust and resolute response.
“The powers granted through the bill will allow us to better identify, prevent and deter fraud and error, and enable the better recovery of debt owed to the taxpayer. A benefits system people can trust is essential for claimants and taxpayers alike – through this bill that’s exactly what we’ll deliver.”
