The Department for Work and Pensions (DWP) has revealed that 7.5 million people in Great Britain, whether employed or not, are currently claiming Universal Credit.
The Department recently emphasised the necessity of examining bank statements and transaction details for individuals either making a new claim for Universal Credit or undergoing a review of their existing award.
In response to a Freedom of Information (FOI) request, the DWP outlined how this data assists them in “understanding the claimant’s earnings, other incomes, savings or housing costs” when processing or renewing a claim.
The DWP elaborated: “Transaction details, such as descriptions and amounts facilitate an accurate assessment of a claimant’s current circumstances.”
They added: “For example, it helps us to establish if a claimant has other capital which would allow the Department to determine if the claimant is now in receipt of any other income or has outgoings which could impact the amount of Universal Credit they are entitled to.”
The DWP further explained that by scrutinising transactions on bank statements, they can “identify unreported changes in circumstances that may affect the amount of Universal Credit received”, including alterations that could result in additional benefit entitlement, reports the Daily Record.
The DWP concluded: “One example of this would be evidence of an unreported increase in rent from an outgoing transaction. Where incorrectness is found, claims are corrected retrospectively.”
Eligibility Verification Measure
Earlier this year, the UK Government declared what it termed ‘the biggest fraud crackdown in a generation’, aimed at curbing financial losses within the welfare system.
The DWP anticipates that the Public Authorities (Fraud, Error and Recovery) Bill will facilitate taxpayer savings of approximately £1.5 billion over the next five years.
The new measures encompass driving bans of up to two years for benefit cheats who consistently fail to repay owed money, powers enabling the DWP to directly recover money from fraudsters’ bank accounts, and Eligibility Verification, which permits third-party organisations such as banks to flag potential fraudulent benefit claims.
In an effort to provide more clarity on how these new measures will be safely implemented and monitored, the DWP has published a series of 11 factsheets. These confirm that the UK Government plans to start implementing the proposed measures from 2026.
These factsheets also detail how safeguards, reporting mechanisms and oversight will function to ensure the “appropriate, proportionate, and effective use of the powers”.
According to guidance on GOV.UK: “The Government will begin implementing the Bill measures from 2026. For the Eligibility Verification Measure, the Government will implement a ‘test and learn’ approach to ensure the new powers to tackle public sector fraud are being used proportionally and effectively.
“DWP and the Cabinet Office will continue to work with industry to implement the new measures, consult stakeholders on Codes of Practice and publish guidance.”
The DWP intends to widen its intelligence-gathering capabilities by liaising with a broader range of third-party entities such as airlines to determine if individuals are improperly claiming benefits from outside the UK, potentially violating the rules of eligibility.
It is crucial for the public to understand that the DWP will not have unfettered access to the bank accounts of millions receiving means-tested benefits like Universal Credit, Pension Credit, and Employment and Support Allowance.
In collaboration with financial institutions, the DWP aims to pinpoint claimants who might exceed means-tested benefit criteria, such as the £16,000 income cap for Universal Credit recipients, in order to address any subsequent overpayments or suspected fraudulent activity.
The current legislation specifies banks and other financial organisations may relay only restricted data to the DWP, safeguarding transaction details from scrutiny. Consequently, the department will lack the ability to trace how benefit recipients utilize their funds.
As per the latest information, overly expansive data sharing by banks could result in penalties, reinforcing the focus on avoiding undue exposure of individual transactions.
The document concludes: “Any information shared through the Eligibility Verification Measure will not be shared on the presumption or suspicion that anyone is guilty of any offence.”
The forthcoming Bill is set to fulfil the UK Government’s manifesto pledge to protect taxpayers’ money, ensuring every pound is utilised judiciously and effectively:
- New powers of search and seizure – so DWP can control investigations into criminal gangs defrauding the taxpayer.
- Allowing DWP to recover debts from individuals no longer on benefits and not in PAYE employment who can pay money back but have avoided doing so.
- New requirements for banks and building societies to flag where there is an indication there may be a breach of eligibility rules for benefits – preventing debts accruing.
- All the powers will include strong safeguards to ensure they are only used appropriately and proportionately – including new inspection and reporting mechanisms.
- DWP will have a clearly defined scope and clear limitations for the use of all the powers it is introducing, and staff will be trained to the highest possible standards.
This Bill will empower the Public Sector Fraud Authority to:
- Reduce fraud against the public sector by using its expertise to take action on behalf of other departments, against those who attack the public sector.
- Better detect and prevent incorrect payments across the public sector through new information gathering and sharing powers.
- Use strong non-criminal sanctions and civil penalties to provide an alternative to criminal prosecution and to deter fraud.
- Improve the government’s ability to recover public money, through new debt recovery and enforcement powers.
- Use new powers of entry, search and seizure to reduce the burdens on the police in the most serious criminal investigations.
- Improve fraud management in future emergencies by creating specialist time limited powers to be used in crisis management situations – building on lessons learned during COVID-19.
The Public Sector Fraud Authority plans to adopt a ‘test and learn’ strategy with these powers, trialling various methods and expertise to determine the most effective way to combat public sector fraud.
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