The Department for Work and Pensions (DWP) is set to launch a major crackdown on benefits claimants with significant savings, starting in October 2026. Under new powers granted by the Public Authorities Fraud, Error and Recovery Bill (PAFER), the DWP will be able to issue Eligibility Verification Notices (EVNs) to financial institutions, requiring them to disclose account balances for Universal Credit, Employment and Support Allowance (ESA), and Pension Credit claimants.
What the New Powers Mean
The enhanced powers will allow DWP officials to directly access bank account information and, in cases of overpayment, seize funds directly from accounts. This move is part of a broader government effort to reduce fraud and error in the welfare system, which currently costs the department billions of pounds each year.
According to the DWP, the EVNs will target accounts that receive Universal Credit or are linked to such accounts, particularly those with balances exceeding £16,000 – the capital threshold for Universal Credit eligibility. However, the threshold may be adjusted; for instance, information could be requested for accounts with balances between £6,000 and £16,000, as claimants with capital in this range have their Universal Credit award tapered.
Gradual Rollout from October 2026
Enforcement of these new powers will be phased in gradually from October 2026, as announced by the DWP earlier this year. This staggered approach aims to ensure a smooth implementation while giving financial institutions time to adapt to the new requirements.
Cabinet Office Minister Satvir Kaur emphasised the government's commitment to tackling fraud: "Fraud against the public sector and unrecovered debt deny our vital frontline services of the funding they deserve. Under these new powers in the PAFER Act, this Government will deliver on its promise to protect hardworking taxpayers and clamp down on those who try to cheat the system."
Impact on Claimants
Claimants with suspicious bank balances, particularly those with over £16,000 in savings, are most at risk of being investigated. The DWP has clarified that the information requested may vary, depending on the specific circumstances of each case. For example, they might only request data for accounts with a specific amount above £16,000, or they could lower the threshold to verify payments for those with between £6,000 and £16,000.
This crackdown is part of a wider effort to recover overpaid benefits and reduce errors, which have been a significant drain on public finances. The DWP's new powers are expected to significantly enhance its ability to detect and recover fraudulent claims.
What Claimants Should Know
Benefit claimants are advised to review their savings and ensure they are reporting accurate information to the DWP. Those with capital between £6,000 and £16,000 may see their Universal Credit payments reduced, and failing to declare such savings could result in penalties.
The PAFER Act represents a significant shift in the DWP's enforcement capabilities, giving it unprecedented access to financial data. As the rollout begins in October, claimants should stay informed about their obligations to avoid potential issues.
