Three types of benefits will be targeted in specific measures to clamp down on benefit fraud outlined by the Department for Work and Pensions in Government guidance
The Government has explained how people claiming three types of benefits will be targeted. The Department for Work and Pensions (DWP) has issued an update amid plans by the Labour Government to trim £8.6 billion over five years by clamping down on benefit fraud with the Public Authorities (Fraud, Error and Recovery) Bill, set to come into force in 2026
Government documentation said: “In the social security system, overpayments from fraud and error currently cost the taxpayer almost £10 billion a year and, since the pandemic, a total of £35 billion of taxpayers’ money has been incorrectly paid to those not entitled… Outside the social security and tax system. at least £3 billion is being lost to fraud and error per year.”
According to the legislation, the DWP will require banks and other financial institutions to check benefit claimants’ accounts against “specific eligibility indicators.” Indicators are based on ruled people must meet to qualify for benefits such as the £16,000 capital limit for being entitled to Universal Credit, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, Income Support, and Housing Benefit (if you are under State Pension age).
It means people cannot have above the £16,000 total in investments or savings. Their claim will be shut down until the amount falls below the total. Banks that receive an eligibility verification alert will share information with the DWP. This includes details of the sort code and account number; the name and date of birth of the account-holder; and which eligibility indicators have been triggered.
The DWP said: “The measure will initially focus on benefits where incorrect payments are currently highest. These are Universal Credit, Pension Credit and Employment and Support Allowance.
“Other benefits could be added with the approval of Parliament in the future through affirmative regulations. The State Pension is explicitly excluded from the power and cannot be added by regulations.
“When information obtained by DWP in response to an Eligibility Verification subsequently helps identify that a claimant is ineligible for a specified benefit, DWP may also use the information to verify the claimant’s eligibility for other benefits.
“For example, where a claimant is eligible for Pension Credit they may also be automatically eligible for Housing Benefit. If information received leads DWP to conclude that a claimant is ineligible for Pension Credit, then the Department will also review the claimant’s eligibility for Housing Benefit. A human will always be involved in any decision which may affect benefit awards or eligibility.”
It added: “The powers will not give DWP access to any claimants’ bank accounts, nor any information on how claimants spend their money.”
