DWP Granted Authority to Access Benefit Claimants' Bank Statements
The Department for Work and Pensions has been granted significant new powers under recently passed legislation, allowing it to demand that banks and financial institutions hand over detailed information about benefit claimants. This move aims to enhance the verification process for eligibility and entitlement to various benefits.
New Legislation Details
The Public Authorities (Fraud, Error and Recovery) Act 2025 provides the DWP with the legal authority to compel banks to provide specific financial data. Before issuing a direct deduction order against a liable person's account, the department is now required to obtain and review bank statements covering a minimum period of three months.
The legislation stipulates that the DWP must serve a notice to the bank where the liable person holds an account, demanding statements for the three months immediately preceding the notice. The Bill explicitly states that this period can be extended if necessary, ending just before the notice is given.
Required Information from Banks
When receiving an account information notice, banks must identify every account held by the liable person and provide comprehensive details for each account. The required information includes:
- Type of account
- Sort code and bank account number
- Account holder status (sole or joint)
- Current account balance at time of identification
- For joint accounts, names of all other account holders
- Correspondence addresses for all account holders
The legislation clearly specifies that account information notices can only be issued for the purpose of determining whether to make a direct deduction order regarding a specific account. This limitation is designed to prevent misuse of the powers.
Concerns About Implementation
On Wednesday, February 11, 2026, the Public Accounts Committee spending watchdog expressed concerns about how these new powers will be implemented. The committee warned that the DWP has not fully articulated how it will exercise these authorities in a manner that maintains public trust and confidence.
The committee's statement highlights the importance of transparent procedures and safeguards to ensure that the enhanced access to financial information does not compromise individual privacy rights or create unnecessary burdens on legitimate benefit claimants.
This development represents a significant shift in how benefit eligibility verification will be conducted, with financial institutions now playing a more active role in providing data to government departments. The three-month statement requirement provides the DWP with a substantial window into claimants' financial activities, potentially helping to identify discrepancies or fraudulent claims more effectively.
