DWP Bank Account Checks to Impact 1.4 Million State Pensioners
The Department for Work and Pensions (DWP) is set to implement new powers that will allow it to conduct bank account checks on 1.4 million state pensioners who receive Pension Credit. This move is part of broader efforts to combat fraud and error in benefit payments, with the DWP targeting benefits where incorrect payments are currently highest.
New Legal Framework for Financial Scrutiny
The Public Authorities (Fraud, Error and Recovery) Act 2025 grants the DWP the authority to comb through bank accounts of benefit claimants. This legislation enables the department to force third parties to provide information during criminal investigations and, in certain cases, recover money owed directly from accounts without requiring a court order.
Initially, the focus will be on Universal Credit, Pension Credit, and Employment and Support Allowance (ESA). The DWP has clarified that the State Pension is explicitly excluded from these powers and cannot be added through future regulations without parliamentary approval.
Safeguards and Oversight Measures
A DWP spokesperson emphasized that the new powers include numerous safeguards and will be independently overseen. "We will not have access to claimants’ bank accounts when checking they are receiving the correct benefits," the spokesperson stated in February. The department aims to reduce fraud and error levels to 2.8% by 2028-29, which would be the lowest rate since tax credits were introduced in 2003-04.
Addressing Overpayments and Taxpayer Losses
A February report from the Public Accounts Committee highlighted the need for the DWP to improve its processes to prevent overpayments and losses to taxpayers. The committee recommended leveraging data from other government departments to verify claimants' entitlement to benefits more effectively.
Currently, there are 1.4 million Pension Credit claimants who will be subject to these new checks. The DWP has introduced major reforms to ensure accurate benefit payments and recover overpayments, projecting significant savings for taxpayers through these measures.
