The Department for Work and Pensions (DWP) will be checking how much money some households have in savings as part of its controversial new 'spy' powers. Banks will be forced to share information with officials, who will be able to withdraw cash directly from accounts.
New Powers Aim to Cut Benefit Fraud
The new powers hope to cut the billions of pounds wasted in benefit fraud, with ministers adamant the situation cannot continue. However, concerns have been raised about privacy and state overreach.
Which Benefits Are Targeted?
The DWP will be focusing on claimants of three benefits: Universal Credit, Employment and Support Allowance (ESA), and Pension Credit. This means pensioners are among households being targeted in the fraud crackdown, despite the fact that Pension Credit is actually massively underclaimed.
Officials will be able to check how much people have in savings to confirm whether someone is eligible for the benefits they are claiming. The savings cut-off for claiming Universal Credit is £16,000, so someone with more than that would be flagged as wrongly receiving benefits. They would also be able to spot other forms of income that may be undeclared and make claimants ineligible.
Government Defends Measures
Labour says the new powers are crucial to tackling benefit fraud, but there are concerns the government is going too far. 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. 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 State Overreach
Sir Geoffrey Clifton-Brown, chair of the Public Accounts Committee, has warned the DWP about the use of the powers. He said recently: '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.'
