The DWP will be able to request details from certain benefit claimants’ banks (Image: John Keeble/Getty)
A crackdown on benefit fraud includes checks on bank accounts to make sure claimants and those applying for them are entitled to the money. Under the clampdown overseen by the Department for Work and Pensions (DWP), checks will be made via official notices sent to banks, building societies and other financial institutions requesting certain details. The checks are known as Eligibility Verification Notices (EVNs).
For Universal Credit (UC) claimants and those applying for the benefit, an EVN might include checking whether they have over £16,000 in savings. Under UC rules, a person isn’t entitled to the benefit if they have more than that amount. For couples who live together, the DWP takes combined money, savings and investments into account even if one person isn’t eligible for UC.
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The amount a claimant or applicant has in cash, digital accounts such as PayPal and in savings accounts, including ISAs, Premium Bonds and property, are among a long list of monies DWP considers when it assesses entitlement to UC.
A few savings aren’t included on the list, such as unpaid life insurance policies, funeral plan contracts and savings or investments in your child’s name or belonging to your children. A full list of what is and isn’t included can be found at the Government’s guidance on UC.
A DWP spokesperson said the new measures will save taxpayers £2.1billion over the next five years and form part of wider plans which will save £14.6bn.
They said the legislation includes checks which will require banks to share limited data on claimants who may wrongly be receiving benefits. The spokesperson added: « It does not involve access to benefit claimants’ bank accounts. »
The Government has clarified how the Eligibility Verification Notices will work, explaining that DWP « where possible » will use different sources of data to check the details claimants provide so any benefit entitlement is calculated correctly.
This can include data from HM Revenue and Customs to verify details about Pay As You Earn (PAYE) employment and income, which can affect eligibility and entitlement.
Government guidance states that information around savings and investments isn’t « readily available in a timely fashion », according to reporting by Chronicle Live.
It says this can lead to errors or fraud as benefits are overpaid, leaving taxpayers out of pocket and claimants facing a situation where they have to pay back what they owe in overpayments.
Under the new powers, the Government insists EVM will improve DWP’s access to data to help verify entitlements, make sure payments are correct, stop the build up of overpayments and prevent debts piling up.
In its guidance, DWP adds: « This will help to reduce fraud and identify errors, including where claimants and/or DWP have made genuine mistakes and help to ensure that they receive the correct amount of money that claimants are entitled to.
« This not only avoids claimants incurring large overpayments that must be repaid, but also ensures the people who are eligible for the support receive the correct amount of money at the right time. »
The Government insists banks and other financial institutions will only be asked to give « limited » information to DWP.
DWP staff won’t be able to access bank accounts themselves, but can request information, which banks are legally bound to provide if asked.
After such checks, DWP can see account balances, regular incoming and outgoing payments as well as transfers between accounts.
To avoid any problems, the GOVexplained website recommends reporting changes in income, savings or your household circumstances.
It also suggests keeping bank statements, payslips and letters as well as replying promptly to any requests from the DWP for information.
Under new legislation, benefits covered by the fresh powers are UC, Pension Credit and Employment and Support Allowance (ESA). It doesn’t apply to the State Pension.
Banks will be asked to confirm if an account exists, whether or not the balance is above a certain savings threshold, evidence of regular income and basic information about the account holder, such as name and date of birth.
