Fresh legislation has granted officials from the Department for Work and Pensions significant new powers to scrutinise the bank accounts of benefits claimants, as part of a major crackdown on fraud. However, certain households have been confirmed as falling outside the scope of these intrusive checks, providing a measure of relief for specific groups.
Targeted Benefits and the 'Safe' Exception
The new rule, officially named the Eligibility Verification Measure, will initially focus on recipients of three key benefits: Universal Credit, Pension Credit, and Employment and Support Allowance. Banks will be legally required to provide limited data on accounts associated with these benefits when requested by the DWP.
Notably, the State Pension has been explicitly excluded from these provisions. As a non-means-tested benefit with a distinct classification, it cannot be included alongside other benefits under the current legislation. A government document clearly states: "This is except for the State Pension, which is excluded from being added by the legislation."
How the New Powers Will Operate
The DWP has emphasised that this measure does not involve direct access to claimants' full bank accounts. Instead, it requires banks to share limited data to verify whether individuals are correctly receiving benefits. The department plans a gradual rollout in a "test and learn environment" to establish optimal processes.
A DWP spokesperson indicated the initiative is projected to deliver £2.1 billion in taxpayer savings over five years, forming part of wider measures expected to save £14.6 billion. The spokesperson clarified: "The legislation includes an Eligibility Verification Measure which will require banks to share limited data on claimants who may wrongly be receiving benefits. It does not involve access to benefit claimants' bank accounts."
Additional Enforcement Powers
The legislation also grants the DWP new powers to directly withdraw funds from bank accounts in specific circumstances. This could occur when an individual has outstanding debts to the department and is declining to settle them through existing arrangements.
Previously, the DWP's options for recovering owed sums were limited to benefit deductions or PAYE salary deductions. The new provisions represent a significant expansion of enforcement capabilities.
Compliance Requirements for Financial Institutions
Banks and financial institutions face substantial obligations under the new rules:
- They must respond to Eligibility Verification Notices within specified deadlines to avoid penalty notices
- Financial institutions could incur fines for inappropriately disclosing information that should remain confidential under the new provisions
- Failure to comply with the requirements could result in significant penalties
Future Expansion and Parliamentary Oversight
While the legislation allows for potential expansion to cover additional benefits in the future, the DWP has confirmed there are no immediate plans to extend the measure beyond the initial three benefits. Any future expansion would require proper parliamentary scrutiny.
A government document states: "If the Secretary of State wishes to expand the range of benefits covered, it will require a debate and approval by Parliament." The department has also given assurances that no personal data will be inappropriately disclosed through these processes.
The new measures represent one of the most significant developments in benefits administration in recent years, balancing fraud prevention against privacy concerns while creating clear exemptions for certain household types.
