New anti-fraud powers granted to the Department for Work and Pensions could lead to benefit claimants being incorrectly identified for bank account investigations, a leading expert has warned.
Expert warns of verification failures
Martin Hartley, group Chief Commercial Officer of business consultancy emagine and member of the Bank of England decision maker panel, has raised serious concerns about the implementation of the DWP's enhanced monitoring capabilities.
"Without careful oversight, there is a danger that individuals could be wrongly identified as having received overpayments, or that funds could be incorrectly deducted from bank accounts," Hartley cautioned.
He emphasised that robust verification processes are essential to prevent these risks, noting that proper checks and balances are critical both for protecting claimants from financial harm and maintaining public confidence in the benefits system.
Root causes of potential errors
According to Hartley, errors in identifying overpayments or underpayments typically stem from multiple factors including outdated claimant information, delays in reporting changes, and limitations in data sharing between government departments.
"The combination of data sharing limitations and poor quality data creates inaccuracies as without clean data, systems can't perform effectively," he explained.
The DWP currently uses data from HMRC to verify employment and income information that affects benefit eligibility. However, for other criteria such as savings, investments, or time spent abroad, the department relies heavily on individuals self-reporting their circumstances accurately.
Three benefits facing immediate scrutiny
The new powers will initially focus on three specific benefits where welfare fraud rates are highest according to DWP statistics:
- Universal Credit
- Employment and Support Allowance (ESA)
- Pension Credit
Hartley proposed several solutions to improve the system's accuracy, including greater automation and real-time data verification between departments and financial institutions, supported by modern digital infrastructure.
He also advocated for simplifying the benefits system, providing clearer guidance for claimants, investing in staff training, and ensuring people know how to easily update their information.
"These measures would go a long way towards improving accuracy and fairness across the system," Hartley concluded, stressing the importance of getting the balance right between preventing fraud and protecting legitimate claimants.