The Department for Work and Pensions (DWP) has released a full list of four things it will not be able to see when checking bank accounts under new powers granted by the Labour Party government. These measures aim to reduce fraud and errors in benefit payments.
New Powers for Bank Account Checks
The Labour government's new legislation grants the DWP authority to examine bank accounts for signs of fraud or overpayment. The enhanced Eligibility Verification powers focus on the three benefits with the highest fraud rates: Universal Credit, Pension Credit, and Employment and Support Allowance (ESA).
Under the Eligibility Verification Measure (EVM), banks may be required to review accounts receiving these benefits and flag those meeting specific eligibility indicators. However, following pressure from privacy campaigners and civil rights groups, the DWP has clarified its limitations.
What the DWP Cannot See
The DWP confirmed that financial institutions are legally prohibited from sharing four types of information:
- Transaction histories
- Spending information
- Financial statements
- Special category data (e.g., political opinions, religion, ethnicity)
The DWP stated: "DWP must only request the minimum information to identify individuals who meet the eligibility indicators, and relevant details related to how the indicators have been met, and financial institutions must only provide minimal information to DWP."
Furthermore, the DWP emphasized that sharing information does not imply guilt: "Where information is shared with DWP, it is not shared on the assumption that the person to whom the information relates is guilty of any wrongdoing."
How the Process Works
Any accounts identified will be considered for further inquiry, but no automatic decisions about benefit entitlement will be made based solely on this information. The types of accounts in scope include current accounts, savings accounts, and investment accounts. Some children's accounts may also be included if they align with benefit eligibility rules.
Accounts out of scope include credit card accounts, current account mortgages, accounts held outside the UK, and non-personal accounts.
