Plans for new powers to check the bank accounts of DWP benefit claimants are moving forward. A bill is going through Parliament which includes powers to require banks to hand over information about people who claim certain benefits, to make sure they are genuinely eligible. These powers, known as an eligibility verification measure, will initially be used to check the details of those claiming Universal Credit, Employment and Support Allowance and Pension Credit, but they could be expanded to other benefits.
Other powers in the legislation include the ability for DWP officials to directly take an amount from a person’s bank account, where they owe funds and are refusing to pay up. The new laws have been approved by the House of Commons and are now going through the House of Lords.
The draft bill is at the report stage in the upper house, with the Lords to begin this stage from Wednesday, October 15. This is another chance for the politicians to scrutinise the legislation and to suggest any amendments.
The DWP has previously said it will not have direct access to people’s bank accounts. The direct deduction powers will be used in cases where the DWP cannot retrieve funds from a person through deductions from their benefits or through PAYE.
Stuart Morris, chief technology and product officer at SmartSearch, said better eligibility checks could have a big positive impact. He said: “If implemented properly, digital eligibility verification could make a real difference in ensuring benefits go to the right people — without unfairly targeting those who genuinely need support.
“I began my career at the DWP, working on Income Support and Jobseeker’s Allowance, before joining the National Fraud Initiative, where I was involved in uncovering more than £50million in fraud through complex data matching. That experience taught me that precision, accuracy and fairness must go hand in hand.
“Benefit fraud is often linked to wider forms of financial crime, from identity theft to organised money laundering. So improving verification isn’t just about saving taxpayer money; it’s also about disrupting criminal networks that exploit system weaknesses.”
Mr Morris said it’s important to have proper safeguards in place in using the powers. He said: “Safeguards and proportionality are essential. Data should be used only for its intended purpose, retained for the minimum time necessary, and subject to independent oversight by Parliament and the Information Commissioner’s Office.
“There must also be clear redress for anyone wrongly flagged, because automation errors can be just as harmful as undetected fraud. This cannot become a surveillance exercise.
“The goal should be a smarter, fairer system that helps genuine claimants access support swiftly while deterring organised fraud. Trust and transparency are the foundation — lose those, and even the best technology will fail.”
In announcing the new legislation, Secretary of State for Work and Pensions, Liz Kendall, said: “We are turning off the tap to criminals who cheat the system and steal law-abiding taxpayers’ money. This means greater consequences for fraudsters who cheat and evade the system, including as a last resort in the most serious cases removing their driving licence.
“Backed up by new and important safeguards including reporting mechanisms and independent oversight to ensure the powers are used proportionately and safely. People need to have confidence the Government is opening all available doors to tackle fraud and eliminate waste, as we continue the most ambitious programme for government in a generation – with a laser-like focus on outcomes which will make the biggest difference to their lives as part of our Plan for Change.”
