The Department for Work and Pensions (DWP) has confirmed the red flags banks will look for on accounts of people claiming benefits. The new Eligibility Verification Measure will allow the DWP to require banks and other financial institutions to check accounts receiving Universal Credit, Pension Credit and Employment and Support Allowance (ESA).
Banks will be given specified eligibility indicators and required to identify accounts which match them before providing certain information to the DWP. However, the rules do not give the DWP access to people's bank accounts or allow officials to see where benefit claimants are spending their money. Financial institutions are specifically prohibited from providing transaction information in response to an Eligibility Verification Notice (EVN).
How the new verification system works
The final Code of Practice governing the new powers has now been published following consultation, paving the way for the DWP to begin using the measure. Under the system, the DWP will issue an EVN to a bank or other financial institution setting out the eligibility indicators it wants accounts checked against.
Importantly, the DWP cannot use an EVN to provide a bank with the personal details of individual benefit claimants and ask for information about them. Instead, financial institutions will use the information they already hold to identify accounts which meet the criteria set out in the notice. Where an account is identified, specified information can then be passed to the DWP to help officials determine whether a benefit may have been incorrectly paid.
What flagged accounts mean for claimants
The DWP said the measure is designed to identify potential incorrect payments rather than determine whether somebody is entitled to benefits. An account being flagged will therefore not automatically mean someone's benefit award is wrong or that payments will be stopped.
Child Poverty Action Group (CPAG) said once a claimant has been identified through the measure, the DWP will use its existing processes to decide whether further action is required. This could ultimately include changing a benefit decision or suspending payments. The publication of the Code of Practice marks a significant step in the rollout of the measure, which aims to reduce incorrect payments across the benefits system.
