DWP Expands Bank Account Checks to Joint Accounts in New Crackdown Bill
The Department for Work and Pensions (DWP) is set to gain extensive new powers to scrutinise claimants' financial assets, including joint bank accounts and cryptocurrency holdings, under a recently enacted bill. This legislation, which received Royal Assent in December 2025, empowers the DWP to combat fraud and recover debts more aggressively than ever before.
New Powers and Their Scope
The Public Authorities (Fraud, Error and Recovery) Act 2025 grants the DWP authority to compel banks and other financial institutions to provide information verifying benefit eligibility. Crucially, it extends to joint accounts, marking a significant expansion of surveillance capabilities. Additionally, the department can now recover money directly from individuals' bank accounts without a court order, particularly targeting those not on benefits or in PAYE employment.
For those in work, the DWP will have the power to make deductions from salaries to collect overdue payments. The bill, greenlit by the Labour Party government this week, covers any establishment legally defined as a bank, ensuring a broad reach across financial systems.
Concerns Over Safeguards and Public Trust
However, a blistering report from the Public Accounts Committee (PAC) released on February 11, 2026, warns that the DWP has not fully outlined how it will use these new legal powers in a manner that supports public trust. The PAC emphasises the need for proportionate and effective application of these extensive authorities.
Labour MP Debbie Abrahams expressed concerns, stating that while tackling fraud is right, the bill might disincentivise the most vulnerable in society from engaging with the DWP. "To many, the bill will be seen as more evidence not to trust the DWP, and not to engage," she added.
Another committee member, Liberal Democrat MP Steve Darling, criticised the bill as "too much of a 'Big Brother bill'" to receive his support. He highlighted the rushed legislative process, noting "just seven working days between the first and second reading of the Bill," and questioned how it could be backed without clear safeguards in place.
Departmental Response and Oversight
In response, the DWP asserts that it is implementing safeguards, such as issuing codes of practice, to ensure responsible use of the powers. The department also highlights the oversight role of HM Inspectorate of Constabulary and Fire & Rescue Services in monitoring the application of these new authorities.
The PAC has recommended that the DWP report annually in its accounts on the frequency and impact of using the powers under the 2025 Act. This move aims to enhance transparency and accountability as the department navigates this expanded regulatory landscape.
