The Department for Work and Pensions (DWP) has detailed the specific red flags that banks will monitor on the accounts of individuals claiming Universal Credit, Pension Credit, and Employment and Support Allowance (ESA). Under the new Eligibility Verification Measure, the DWP will have the authority to require banks and other financial institutions to review accounts against set eligibility indicators.
Financial institutions will receive these specified indicators and will be tasked with identifying accounts that correspond to them before sharing certain information with the DWP. However, this measure stops short of granting the DWP direct access to individuals' bank accounts, ensuring that officials cannot view detailed spending patterns or transaction histories.
Notably, banks and other financial bodies are expressly forbidden from disclosing transaction details in response to an Eligibility Verification Notice (EVN).
Following a comprehensive consultation period, the final Code of Practice outlining the use of these new powers has been published, allowing the DWP to proceed with implementing the measure.
Under the process, the DWP will issue an EVN to banks or financial institutions specifying the eligibility indicators against which accounts are to be checked. Crucially, the DWP cannot provide banks with personal information about individual benefit claimants nor request details pertaining to specific individuals.
Financial institutions will instead rely on the information already held to match accounts against the stated criteria. When matches are found, certain prescribed information may be shared with the DWP to assist officials in identifying potential incorrect benefit payments.
The DWP emphasises that the measure aims to uncover possible incorrect payments rather than making determinations about an individual’s entitlement to benefits. Consequently, an account being flagged does not automatically imply that a benefit award is incorrect or that payments will be halted.
The Child Poverty Action Group (CPAG) has pointed out that once an account is identified via this measure, existing departmental procedures will be followed to decide if further action is warranted, which could include amending benefit awards or suspending payments.