New DWP update gives more detail on plans to monitor bank accounts

The DWP is planning new measures to continue its crackdown on fraud and error within the benefits system

The Department for Work and Pensions (DWP) has issued new details on plans to allow it to check bank accounts of people on benefits or in receipt of the State Pension in a bid to crack down on fraud. The proposals led to a petition that has now garnered more than 20,000 signatures.

Now the DWP has confirmed that proposed 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 petition, entitled ‘Do not introduce regular bank account checks for benefit claimants’, argues that the proposed amendments to the Bill take “too aggressive an approach towards benefit claimants” and are “undermining their rights”.

Currently, the DWP can request details of a person’s bank account transactions if it has reasonable grounds to suspect fraud. But new powers would allow it 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, reports the Daily Record.

The petition created by Wendy Scott is posted on the petitions-parliament website. The written response from the DWP states that its powers are currently “limited” and that means it is “unable to address certain fraud or error challenges”.

It continues: “We must modernise and strengthen DWP’s 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”.

It added: “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 errors by ensuring claimants are in receipt of the correct amount of benefit that they are entitled (to), 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.”

The DWP clarified that the measure would require third parties to look within their own data and provide “relevant information” 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,” the DWP explained.

It 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 £900million of overpayments in Universal Credit for the 2022/23 financial year.

The 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 it “continuously handles large volumes of data and has robust processes in place”. Some £8.3billion was overpaid in fraud and error last year in the benefits system. The DWP estimates that the proposed new measures will save up to £60 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.