The Department for Work and Pensions (DWP) has confirmed it will exclude the State Pension from its new powers to scrutinise claimants' bank accounts, a move that will spare approximately 13 million pensioners from the upcoming crackdown on welfare fraud and error.
New Powers and a Key Exclusion
Under legislation introduced by the Labour Party government, the DWP has been granted significant new authority to combat incorrect benefit payments. These powers, which originated as a Conservative Party concept, will compel banks and other financial institutions to hand over customer data to help verify a claimant's entitlement.
Financial firms will be required to match accounts receiving specified DWP benefits against eligibility criteria set by the department. They can share details including account numbers, sort codes, balances, and the holder's name and date of birth.
However, in a crucial exemption, the DWP has explicitly stated: "The State Pension is explicitly excluded from the power and cannot be added by regulations." This decision removes the UK's largest benefit payment from the scope of the new financial surveillance.
Focus on High-Risk Benefits
The government's data-driven initiative will initially concentrate on the three benefits with the highest recorded levels of fraud and error. These are:
- Universal Credit
- Pension Credit
- Employment and Support Allowance (ESA)
The DWP asserts that the measures, which came into focus after the Christmas period, include safeguards to protect vulnerable individuals. A department spokesperson emphasised that debt recovery actions are aimed at those who have stopped receiving benefits, have the means to repay, but persistently refuse.
Civil Liberty Concerns and Official Defence
The expansion of the DWP's powers has sparked alarm among privacy campaigners. Jasleen Chaggar, a legal and policy officer at the campaign group Big Brother Watch, condemned the move.
"We should not be giving the government powers to go behind our backs and pilfer through our bank accounts," Chaggar stated. She described the authority to secretly request three months of bank statements as "paternalistic and nothing short of dystopian," arguing that such decisions should be made by courts, not Whitehall officials.
In its defence, the DWP pointed to a 'green rating' from the independent Regulatory Policy Committee (RPC), which deemed the legislation "fit for purpose." The government maintains that the powers are a vital tool to ensure benefit money goes to those who genuinely need it, correcting costly errors and targeting deliberate fraud.
