The Department for Work and Pensions (DWP) has been handed controversial new powers to monitor the bank accounts of pensioners and benefit claimants. Under the new rules, banks will be required to share account information with the government department, affecting hundreds of thousands of older people receiving Pension Credit.
How the new powers work
Officials will be able to demand account details where there is suspicion of fraud or wrongful payments. This includes information on savings and other income, allowing them to verify benefit eligibility. The powers will focus on Universal Credit, Employment and Support Allowance (ESA), and Pension Credit.
Ministers argue the measures will help tackle billions wasted in benefit fraud each year, but privacy concerns have been raised. A DWP spokesperson said: "Our Fraud, Error and Recovery Bill includes an Eligibility Verification Measure which will require banks to share limited data on claimants who may wrongly be receiving benefits – such as those on Universal Credit with savings over £16,000."
The spokesperson added: "As well as tackling fraud, the new powers will also help us find genuine claim errors sooner, stopping people building up unmanageable debt. This measure does not give DWP access to any benefit claimants’ bank accounts."
Concerns over overreach
Sir Geoffrey Clifton-Brown, chair of the Public Accounts Committee, warned: "Make no mistake, the DWP’s new powers to reach further into citizens’ lives are significant. Our Committee of course firmly supports Government in its responsibility to ensure people are paid the correct benefits. But it is essential that these extensive new powers - of compulsion of disclosure over banks and financial institutions, of recovering funds directly from people’s accounts without the aid of the courts – have the risk of overreach mitigated against right from the outset."
