The DWP has issued an update amid plans by the Labour Government to trim £8.6 billion over five years by clamping down on benefit fraud with the Public Authorities (Fraud, Error and Recovery) Bill, set to come into force in 2026
The Department for Work and Pensions (DWP) has outlined how it will target claimants of three specific benefits. This comes as the Labour Government plans to shave off £8.6 billion over five years by cracking down on benefit fraud with the Public Authorities (Fraud, Error and Recovery) Bill, set to kick in from 2026.
Government documents reveal: “In the social security system, overpayments from fraud and error currently cost the taxpayer almost £10 billion a year and, since the pandemic, a total of £35 billion of taxpayers’ money has been incorrectly paid to those not entitled… Outside the social security and tax system. at least £3 billion is being lost to fraud and error per year.”
Under the new law, the DWP will compel banks and other financial bodies to cross-check benefit claimants’ accounts against “specific eligibility indicators.”
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These indicators are based on criteria that people must meet to qualify for benefits such as the £16,000 capital limit for Universal Credit, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, Income Support, and Housing Benefit (if you’re below State Pension age).
The Department for Work and Pensions (DWP) is cracking down on benefit fraud with a new rule that could see claims shut down if savings or investments exceed £16,000. Banks are now on alert to share account details with the DWP when they receive an eligibility verification notice, reports Birmingham Live.
The DWP has spoken out, saying: “The measure will initially focus on benefits where incorrect payments are currently highest. These are Universal Credit, Pension Credit and Employment and Support Allowance.”
They added, “Other benefits could be added with the approval of Parliament in the future through affirmative regulations. The State Pension is explicitly excluded from the power and cannot be added by regulations.”
The department also explained how the data gathered could have wider implications: “When information obtained by DWP in response to an Eligibility Verification subsequently helps identify that a claimant is ineligible for a specified benefit, DWP may also use the information to verify the claimant’s eligibility for other benefits.”
For instance, they noted, “For example, where a claimant is eligible for Pension Credit they may also be automatically eligible for Housing Benefit. If information received leads DWP to conclude that a claimant is ineligible for Pension Credit, then the Department will also review the claimant’s eligibility for Housing Benefit. A human will always be involved in any decision which may affect benefit awards or eligibility.”
The statement further clarified: “The powers will not give DWP access to any claimants’ bank accounts, nor any information on how claimants spend their money.”