DWP major update on 'eligibility verification' checks as banks to 'monitor' claimants

Banks will share information with the Department for Work and Pensions

Banks will work with the Department for Work and Pensions (DWP) to monitor claimants in a bid to reduce benefit fraud. The new measures will see financial institutions support the DWP if asked by investigators when there is a suspected overpayment.

Work and Pensions Secretary Liz Kendall announced in Parliament on Tuesday (October 8) that new 'eligibility verification' measures will be brought in. Banks will be required to examine data they have on claimants and report back to the DWP.

Under the Fraud, Error and Debt Bill, new powers are being granted to the DWP. This includes using the 'eligibility verification' measures to 'identify incorrect payments' and any fraud.

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The new powers will also allow the DWP to 'recover debts' from those who have avoided paying money back and make changes to penalties. The Secretary said: "The Government is determined to prevent incorrect payments where we can, so DWP will be given new powers to better identify and prevent potential overpayments.

"These will help officials to ensure eligibility criteria is being met - including being able to see sooner where it is not - which will mean fewer claimants accruing debts and getting into financial difficulty. This will also serve to ensure every claimant is treated fairly.

"We will ensure that these powers are proportionate. We will introduce safeguarding, reporting mechanisms and independent oversight, to give greater confidence to claimants that the powers are being used fairly and effectively. DWP staff will receive training on the use of any new powers."

She added: "Through our Eligibility Verification measure, require banks and financial institutions to examine their own data sets to highlight where someone may not be eligible for the benefits they are being paid. This will help DWP identify incorrect payments, prevent debts from accruing for the claimant and help identify where there may be fraudulent activity.

"Banks will only share very minimal information, and this will only be used by DWP to support further inquiry, if needed, into a potential overpayment."

The DWP will not be given access to bank accounts or information on how claimants spend their money. Ms Kendall said: "The proposed new power instead helps verify benefit eligibility, using very limited information from banks and financial institutions.

"A human being will always be involved in any investigations and any decisions taken afterwards that affect eligibility or benefit awards, as they do now. This measure will not be used on the State Pension."

The measures are expected to save up to £1.6 billion over the next five years. Ms Kendall said the bill will be 'tough on criminals, fair for claimants and provide confidence to the taxpayer'.

The aim of the Bill is to 'reduce overpayments, detect and prevent fraud, ensure prompter investigations and bring greater fairness to the system', she added.

Some of the other new powers the Bill will give to DWP include:

• Search and seizure to take greater control of investigations into criminal gangs
• Ability to make changes to the penalty system to fairly punish fraudsters
• Greater debt recovery abilities to recover money from individuals who can pay it back but have avoided doing so