The Department for Work and Pensions is preparing to implement significant new measures that will see officials begin checking the bank accounts of benefit claimants, with Universal Credit recipients among the first to be affected.
New Legislation Enables Enhanced Fraud Detection
Following the introduction of new legislation designed to combat fraud and error within the benefits system, DWP officials have confirmed they will be increasing their efforts to verify claimant eligibility through bank account monitoring. These measures represent a substantial expansion of the department's investigative capabilities and come as part of a broader strategy to reduce incorrect payments across the welfare system.
Initial Focus on Key Benefits
The enhanced checking procedures will initially apply to individuals receiving three specific benefits:
- Universal Credit
- Pension Credit
- Employment and Support Allowance
The legislation contains provisions that could allow this scope to be extended to encompass additional benefits in the future, depending on the outcomes of the initial implementation phase.
Direct Recovery Powers Introduced
Alongside the new monitoring capabilities, fresh powers will enable DWP investigators to directly withdraw funds from a person's bank account when they owe money to the department and are refusing to make repayments. This represents a significant escalation in the department's ability to recover funds that have been incorrectly paid out.
Human Oversight Maintained
During recent questioning by the Work and Pensions Committee, DWP permanent secretary Peter Schofield provided reassurance about the department's approach. "In our fraud and error work, we don't stop any benefits without a human looking at this, reviewing all the evidence, from all sorts of different sources that they've got, including understanding markers of vulnerability or complex needs as well, and then making a decision off the back of that," he clarified.
Mr Schofield explained that while the department employs sophisticated machine learning technology to identify potentially fraudulent payments, all final decisions are made by human agents who consider the full context of each case.
Substantial Funding and Resources Allocated
The DWP has received approximately £300 million in funding for fraud and error reduction during the current financial year, which finances around 4,000 agents dedicated to examining cases. Mr Schofield noted that this investment has already yielded results, with the department achieving a substantial reduction in the proportion of fraudulent and incorrect Universal Credit payments over the last two years.
Additional Safeguards Being Implemented
Alongside the enhanced checking procedures, the department is introducing additional safeguards designed to prevent incorrect payments from being issued in the first instance. These include sending regular reminders to claimants to notify the DWP of any changes in their circumstances that might affect their eligibility.
One specific example highlighted involves claimants with children over the age of 16, who are reminded to inform the department if their children remain in full-time education. This is particularly relevant as claimants can receive additional Universal Credit payments for children until they turn 16, with this support potentially continuing until age 19 if the child remains in approved education or training.
Child Payment Details and Upcoming Changes
The additional payment amounts to £399 monthly for a first child born before April 6, 2017, or £298.81 for those born on or after this date. For second and subsequent children, claimants receive £298.81 per child. Currently, these additional amounts are only available for the first two children, meaning claimants can receive up to £631.81 in extra support.
However, this system is set to change from April 2026, following Chancellor Rachel Reeves's announcement in the Autumn Budget 2024 that Labour would scrap the two-child cap that applies to certain benefits, potentially affecting how these additional payments are calculated in the future.
The DWP's enhanced monitoring represents a significant development in how benefit eligibility is verified, balancing technological capability with human oversight while aiming to reduce fraud and error within the welfare system.
