DWP confirms dates it will start monitoring your bank account

The Department for Work and Pensions (DWP) has confirmed when new bank checks on benefit claimants will start under its new powers. The plans will mean banks and building societies have to keep an eye on people’s accounts for any activity that breaks the rules and hand over information to the DWP.

The powers are designed to stop people defrauding the DWP by claiming benefits they aren’t entitled to – because they have too much money, are working or are spending time abroad, among other factors.

Government figures show £8.3 billion was lost to fraud and error in the welfare system in 2022/2023, reports BirminghamLive. The new system will report to the DWP if you have more than £16,000 in your bank and are claiming Universal Credit or other benefits – for example.

At present, the DWP can only ask to check an individual’s account if it already suspects fraud has been committed. It also relies on claimants themselves to report any changes in circumstances – including large cash deposits – that mean they’re no longer entitled to benefits.

New powers will require banks and building societies to share information with the DWP on all accounts where benefits are paid in. Britain’s top 15 banks – which handle 97 per cent of all DWP benefit payments – will have to set up systems that automatically keep tabs on claimants’ accounts to check for these signs of possible fraud.

The legislation would allow other financial institutions to be brought on board in future so fraudsters couldn’t move their money elsewhere to avoid detection. The DWP says it intends to test the new crackdown from 2025 and then start bringing it in properly from 2027. It’s expected to be running at full scale, with all banks on board, by 2031.

A Government impact assessment on the new measures details the schedule as follows: “The policy has been designed in collaboration with operational colleagues, whereby a period of ‘test and learn’ will begin in 2025 with a limited number of banks and building societies.

“The purpose of this approach is to get the data sharing agreement between DWP and third-party data holders right, before implementing the policy on a larger scale. After the focused test and learn, the policy will begin gradual roll-out (from 2027/28), with it reaching full scale by 2030/31.”

DWP bank checks timetable – full list of dates

• 2025 – testing of new bank account checks begins
• 2027/28 – gradual rollout of full powers
• 2030/31 – new powers operating at full scale with all 15 banks