The Department for Work and Pensions (DWP) has been handed new controversial powers allowing it to withdraw cash directly from certain bank accounts belonging to state pensioners. This move is part of a crackdown on low-income households that claim Pension Credit.
New Powers for DWP
Under the new rules, banks will be forced to share account information with DWP officials upon request, and the DWP will have the ability to make direct cash withdrawals from accounts. However, these measures will only be applied in cases of suspected benefit fraud or wrongful payments, including instances where individuals are claiming support they are not entitled to.
Targeted Benefits
The so-called 'spy' powers will target three specific benefits: Pension Credit, Universal Credit, and Employment and Support Allowance (ESA). The Pension Credit crackdown comes despite the benefit being significantly underclaimed. The government would pay out much more if everyone who is eligible actually claimed it, as close to a million eligible pensioners do not claim.
Privacy Concerns
Officials will be able to check on savings and other forms of income to determine if someone should be receiving benefits, but concerns have been raised around privacy. Officials say the new powers will also allow them to spot errors early, preventing people from having to pay back large amounts.
Official Statement
A DWP spokesperson said: “Our Fraud, Error and Recovery Bill includes an Eligibility Verification Measure which will require banks to share limited data on claimants who may wrongly be receiving benefits – such as those on Universal Credit with savings over £16,000. As well as tackling fraud, the new powers will also help us find genuine claim errors sooner, stopping people building up unmanageable debt. This measure does not give DWP access to any benefit claimants’ bank accounts.”
Concerns from Committee Chair
Sir Geoffrey Clifton-Brown, chair of the Public Accounts Committee, has warned the DWP about the use of these powers. He said recently: "Make no mistake, the DWP's new powers to reach further into citizens' lives are significant. Our Committee of course firmly supports Government in its responsibility to ensure people are paid the correct benefits. But it is essential that these extensive new powers - of compulsion of disclosure over banks and financial institutions, of recovering funds directly from people's accounts without the aid of the courts – have the risk of overreach mitigated against right from the outset."
