New DWP update on plans to monitor bank accounts of pensioners and benefits claimants

new dwp update on plans to monitor bank accounts of pensioners and benefits claimants

DWP has issued an update.

The Department for Work and Pensions (DWP) has confirmed that proposed new amendments to the Data Protection and Digital Information Bill, announced in November 2023, will “not grant DWP access to any bank accounts ” or “see how claimants are spending their money”.

The clarification came after an online petition, calling for proposed new measures allowing the DWP to check bank accounts of people on State Pensions or benefits to crack down on fraud, passed the 10,000 signature threshold.

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The ‘Do not introduce regular bank account checks for benefit claimants’ petition, argues that the proposed amendments to the Bill take “too aggressive an approach towards benefit claimants” and is “undermining their rights”, reports the Record.

Under current rules, the DWP is able to request bank account holders’ bank transaction details on a case-by-case basis if there is reasonable grounds to suspect fraud. However, new powers would allow the DWP to access the personal data of benefit claimants by requiring the third party served with a notice, such as a bank or building society, to conduct mass monitoring without suspicion of fraudulent activity.

More than 19,800 people have signed the petition created by Wendy Scott, which is posted on the petitions-parliament website. The written response from the DWP states that the current DWp are “limited” and leave the Department “unable to address certain fraud or error challenges”.

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It continues: “We must modernise and strengthen DWPs legislative framework to give those fighting fraud the tools they need to stand up to future challenges and minimise the impact of genuine mistakes that can lead to debt.”

“The third party data gathering measure enables DWP to request data from third parties so we can more proactively detect fraud and error in the welfare system.”

DWP goes on to explain how “data is a powerful tool to understand whether someone is entitled to benefit” adding that it already uses “several data streams to help verify a person’s claim or entitlement to benefit which has helped significantly reduce other types of fraud and error”.

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DWP said: “This measure will provide better access to data to establish whether someone is entitled to benefit, making it harder for fraudsters to steal from the taxpayer. The measure will also address error by ensuring claimants are in receipt of the correct amount of benefit that they are entitled, preventing people from inadvertently getting into debt.”

“There are a number of misconceptions about this measure, namely, it does not grant DWP access to any bank accounts and it does not allow DWP to see how claimants are spending their money.”

DWP clarified that the measure will require third parties to look within their own data and provide “relevant information” to the Department that “may signal where claimants do not meet the eligibility criteria for the benefit they are receiving”.

“DWP will only receive data on accounts matching criteria DWP prescribes, these will be linked to eligibility criteria for benefits that, if met, may require further consideration to ensure a claim is correct through our business-as-usual processes,” DWP explained.

DWP went on to give an example of how some benefits have rules regarding how much money a claimant can have in a bank account and remain eligible for that benefit – the capital limit.

It added that claimants breaching the capital limit is one of the “largest causes of fraud and error in the welfare system” and accounted for almost £900 million of overpayments in Universal Credit for the 2022/23 financial year.

DWP continued: “The measure avoids DWP having to share any personal data with third parties in order to obtain the information it needs and only the minimum amount of information will be requested on accounts that match the criteria provided so that DWP can identify the claimant in their own database.”

“DWP will only request information where there is a link between DWP, the data holder and the recipient of payment.”

“Where there is no signal of a potential overpayment no claimant information will be shared with DWP. This means the vast majority of claimants will be unaffected by this measure.”

The DWP response reiterated that it “will protect the data it receives” and highlighted how the Department “continuously handles large volumes of data and has robust processes in place”.

Some £8.3 billion was overpaid in fraud and error last year in the benefit system. The DWP estimates that the proposed new measures will save up £600 million in taxpayers’ money by 2028/29.

The full written response from the DWP can be read online here.

At 100,000 signatures the ‘Do not introduce regular bank account checks for benefit claimants’ petition would be considered by the Petitions Committee for debate by MPs in Parliament.

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