The Department for Work and Pensions (DWP) has published final regulations for its new Eligibility Verification Measure, which will require banks and other financial institutions to check customer accounts for indicators linked to Universal Credit, Pension Credit and Employment and Support Allowance (ESA).
Under the measure, financial institutions will be issued an Eligibility Verification Notice (EVN) specifying the eligibility indicators they must use to identify relevant accounts. Once an account is flagged, the bank can share limited information with the DWP to help officials determine whether a benefit may have been paid incorrectly.
The regulations make clear that the DWP will not gain access to claimants' bank accounts or be able to see where benefit money is spent. Banks are expressly forbidden from providing transaction details in response to an EVN.
How the new bank checks will work
The DWP will send an EVN to a bank or building society listing the eligibility indicators it wants checked. The notice cannot include personal details of individual claimants, so institutions must rely on their existing customer data to identify accounts that match the criteria.
Once a match is found, the bank may forward specific information to the DWP to assist in establishing whether a benefit may have been incorrectly paid. The DWP stresses that the measure is designed to detect potential incorrect payments, not to assess an individual's entitlement to benefits.
An account being flagged does not automatically mean a benefit award is wrong, nor does it mean payments will be suspended. The Child Poverty Action Group (CPAG) said that once a claimant is identified, the DWP will use existing processes to decide whether further action is needed, which could include changing a benefit decision or stopping payments.
What information can banks send?
Financial institutions cannot provide the DWP with transaction details showing what someone has bought or where they have spent money. The legislation also generally prohibits the sharing of special category data, with limited exceptions such as information needed to confirm that a person receives a specified benefit.
The DWP is also barred from sharing claimants' personal data with banks when issuing an EVN. The Code of Practice requires that any information supplied by financial institutions is transferred securely, and EVNs are expected to be issued mainly in electronic form.
What happens if an account is flagged?
A match alone is not enough for the DWP to conclude that someone has been overpaid. Further checks are necessary because there may be legitimate reasons why bank data appears to conflict with benefit eligibility. For example, the Code acknowledges that a person could appear to hold savings above the normal capital limit while some of that money is legally disregarded when calculating their benefit entitlement.
DWP staff would therefore need to examine each claimant's individual circumstances before making a decision about their award. These powers are part of the Public Authorities (Fraud, Error and Recovery) Act 2025, which received Royal Assent in December.
The DWP says the broader measures aim to combat fraud and error within the benefits system while incorporating safeguards on how information is obtained and used. For a detailed breakdown of how the new measure will operate, the Child Poverty Action Group has published a full briefing by welfare rights adviser Ruby Sullivan.
