The Department for Work and Pensions (DWP) is implementing new measures to monitor bank accounts as part of a strengthened effort to combat benefit fraud. Under these measures, banks and financial institutions will be required to review claimant accounts to ensure compliance with benefit eligibility rules.
Staff at the UK’s 15 largest banks will have access to data related to accounts receiving certain DWP benefit payments. They will cross-check these accounts against specific eligibility indicators outlined by the DWP in an Eligibility Verification Notice. These indicators align with the rules for particular benefits.
For example, recipients of Universal Credit are not allowed to hold more than £16,000 in savings unless the capital qualifies as an approved exception. Accounts that meet the eligibility criteria for review will be flagged for further investigation by the DWP. However, the department emphasizes that no benefit entitlement decisions will be made based solely on the bank data.
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Big Brother Watch has raised concerns about potential debt recovery actions linked to these checks. If you owe money to the DWP but are no longer receiving benefits or are not in PAYE employment, your debt might be deducted directly from your bank account. Before this can happen, the DWP’s debt management team will attempt multiple contacts via letter and phone over a four-week period to arrange a voluntary repayment plan.
If contact cannot be made, the case moves to the debt enforcement team, which will make four additional attempts to reach you in writing. Failing a response, the DWP may request at least three months of bank statements from any bank where you hold an account—not limited to the one receiving benefits—to assess your ability to repay the debt through direct deductions.
Your bank is not permitted to notify you if such a request occurs. Should the DWP determine you can afford direct deductions, they will issue a ‘direct deduction order’ and inform you of the decision. You will also have the right to challenge this decision if you believe it to be incorrect.