Plans to give the Government new powers to monitor the bank accounts of benefit claimants have sparked fears that some of the poorest retirees will be too frightened to apply for Pension Credit.
Campaigners say the Public Authorities (Fraud, Error and Recovery) Bill could undo a recent surge in take-up of the benefit, which tops up incomes for pensioners living on the breadline.
The Bill would require banks to “examine their own data sets” and flag up information to officials that could suggest someone may not meet the strict eligibility criteria for support.
Dennis Reed, director of the campaign group Silver Voices, told The i Paper that the proposals were “draconian”.
He warned: “They are terrifying many recipients of pension credit and will act as a disincentive for future claimants.
“Pensioners are worried that any unusual, but perfectly legal, transactions will flag up their accounts for investigation, and they may have their benefits frozen or their personal accounts raided.”
Mr Reed added: “Many pensioners are already reluctant to claim pension credit because of the complexity and intrusiveness of the process.
“I am very worried that the recent increase in uptake will be reversed and more older people will be plunged into poverty as a consequence.”
Members of Silver Voices have written to the group saying they are deeply concerned about the Bill.
A 72-year-old from Dorset said: “I am single, live alone, receive Pension Credit, and the old state pension. I am terrified of these new powers in this new legislation. I feel vulnerable enough now without facing the dread of this.”
Another pensioner added: “I am truly concerned about this intrusion by the Department for Work and Pensions.”
Pension Credit not only boosts income – up to £227.10 a week for single pensioners and £346.60 for couples – but also unlocks a raft of other benefits, including free TV licences for over-75s and eligibility for cold weather payments.
This year claims have jumped by 28% – with 321,000 applications – after ministers restricted winter fuel payments to those in receipt of Pension Credit.
But campaigners now fear that gain could be wiped out if pensioners are spooked by the idea that their spending habits may be scrutinised.
The Department for Work and Pensions (DWP) has denied it will have access to claimants’ bank accounts or details of how they spend their money, saying financial institutions are prohibited from sharing such transactional data.
A spokesman said: “We have a duty to the taxpayer, and this Bill is set to save £1.5bn over the next five years, which together with wider reforms will save £9.6bn by 2030 according to Office for Budget Responsibility estimates.”
