The Department for Work and Pensions (DWP) has announced a significant expansion of its powers, enabling banks to conduct checks on the bank accounts of benefits claimants suspected of fraudulent activity.
New Powers for Financial Institutions
This crackdown, backed by the Labour Party government, is a direct response to the UK's ballooning welfare bill. Andrew Western, the DWP minister, addressed the Commons, confirming the new measures. He stated that the primary aim is to identify both legitimate errors and deliberate fraud within the benefits system.
The new eligibility verification measure will allow the DWP to request limited data from financial institutions. This data will be used to identify incorrect payments and verify that individuals are correctly receiving specific benefits.
Focus on High-Risk Benefits and Impact on Claimants
Personal finance experts have indicated that benefits with the highest recorded rates of fraud are likely to be scrutinised most closely. These are believed to include Pension Credit, Universal Credit, and Employment and Support Allowance (ESA).
Minister Western emphasised that the system is designed to help those who have made genuine mistakes. He explained, "The eligibility verification measure will enable us to identify errors that are legitimate as well as illegitimate... in order to minimise the level of debt for individuals who have, I accept, done this accidentally and ensure that they are caught earlier."
He argued that a key advantage is that any overpayments will be smaller as they are identified sooner, thereby minimising suffering for people who have inadvertently made a mistake.
Addressing Privacy Concerns
Despite the stated aims, the policy has faced a fierce backlash from privacy campaigners and civil liberties groups concerned about state surveillance and data sharing.
In response to these concerns, Andrew Western sought to provide reassurance. "Let me be clear that there is no reason for individuals to lose access to banking services solely because of information shared under the eligibility verification measure," he told MPs.
He further clarified that the information provided to the DWP "does not imply any wrongdoing" and is simply integrated into the department's existing processes, which include support for vulnerable claimants.
