UK DWP bank account checks benefit fraud, Digi Mart USA News (United Kingdom): The UK’s Department for Work and Pensions (DWP) has issued its first Eligibility Verification Notice (EVN), introducing new requirements for banks to identify accounts that may indicate incorrect benefit payments.
The Eligibility Verification Measure (EVM), established under the Public Authorities (Fraud, Error and Recovery) Act 2025, allows the department to request limited financial information to check whether claimants continue to meet benefit eligibility conditions. The government expects the initiative to generate £1.2 billion in savings by 2030/31 by identifying undeclared savings, excessive periods spent abroad and other potential causes of benefit overpayments.
The DWP said the system would also help detect mistakes earlier, reducing the likelihood of claimants accumulating debts through payments to which they are no longer entitled. The first notices mark the start of a controlled testing phase before any wider implementation.
Under the new legislation, the DWP can require financial institutions to check accounts receiving specified benefits against eligibility indicators provided by the department. These indicators are based on existing benefit conditions, including limits on savings and restrictions on time spent outside the UK.
Banks must identify accounts that meet the indicators and provide relevant information to the DWP for further examination.
The checks can cover linked accounts and joint accounts, including accounts held by individuals who are not themselves receiving benefits. For Universal Credit, claimants generally cannot qualify if their countable savings exceed £16,000.
Spending more than one month abroad can also affect eligibility, subject to certain exceptions. Financial institutions may therefore identify accounts with balances above the relevant threshold or transaction dates suggesting an extended overseas stay.
An account being flagged does not establish fraud or automatically affect benefit payments. The DWP must conduct further enquiries before determining whether someone has received incorrect support.
Minister for Innovation, Fraud and Debt Lilian Greenwood said the new powers would help identify deliberate misuse of the welfare system. “Benefit fraudsters should be looking over their shoulder,” Greenwood said.
She added that the government was not interested in routine consumer spending and that banks would only be asked to identify possible breaches of benefit rules.
The legislation restricts the information financial institutions can provide under an Eligibility Verification Notice. Where an account meets an eligibility indicator, banks may disclose limited information relevant to the indicator.
The DWP cannot use the measure to access online banking accounts directly or monitor financial activity in real time.
Banks are prohibited from supplying full bank statements, detailed transaction records, information about purchases or specific locations where transactions occurred. Sensitive personal information, including political opinions and religious beliefs, must also remain protected.
Financial institutions that disclose prohibited information can face penalties.
The DWP has stated that data collected under the measure must be used to assess benefit entitlement, identify incorrect payments or support related investigations. Information received about individuals who are not relevant to a benefits enquiry must be destroyed in accordance with the department’s information management requirements.
An independent reviewer will assess whether the DWP and participating financial institutions comply with the legislation, and reports on the operation of the powers will be presented to Parliament.
A bank notification could result in the DWP reviewing a claimant’s entitlement, but the information alone cannot justify stopping or reducing benefits. Officials must establish whether the claimant has breached the relevant conditions and consider any applicable exemptions.
If an investigation identifies an overpayment, the department may reduce or terminate future benefits and seek repayment of money already received.
Some savings are disregarded when calculating eligibility. These can include certain personal injury compensation payments, money held in trust for another person and proceeds from selling a home that are intended for purchasing another property.
Claimants may need to provide evidence explaining the source and intended use of those funds. Similarly, extended periods abroad do not necessarily result in the loss of benefits.
Certain circumstances, including medical treatment or bereavement involving a close relative, may allow a claimant to remain outside the UK for longer than the standard permitted period. The DWP has said these exceptions will be considered before entitlement decisions are made.
The statutory code of practice accompanying the new powers sets out safeguards for collecting, handling and reviewing financial information. The bank verification initiative forms part of the government’s efforts to reduce fraud and administrative errors within the welfare system.
In its October 2026 announcement, the government described the new powers as an attempt to improve payment accuracy while ensuring support reaches eligible recipients.
The policy comes amid pressure to control the UK’s growing welfare expenditure. The Treasury’s October 28 Budget outlined further reforms intended to reduce incorrect payments, encourage employment and protect public finances.
Additional measures announced in the Budget are expected to generate £1.4 billion in savings between 2027 and 2032. The government also plans to increase face-to-face assessments for certain health-related benefits.
Separately, the independent Timms Review of Personal Independence Payment published its interim findings in July 2026, contributing to the wider debate over disability benefit eligibility and welfare expenditure.
Civil liberties organisations have raised concerns about the scale of the new verification powers and their potential effects on individuals who have not been suspected of wrongdoing. Big Brother Watch has described the system as a “snooper’s charter”, arguing that requiring banks to screen benefit-related accounts amounts to widespread financial surveillance.
The organisation warned that the measures risk treating welfare recipients as potential fraud suspects without individual evidence, and it raised concerns about incorrect automated assessments, drawing comparisons with the Horizon accounting scandal involving the Post Office. Big Brother Watch said safeguards preventing automated findings from being treated as proof of wrongdoing were an important concession during the legislative process.
Disability Rights UK has similarly warned that the measure could enable broad investigations without prior evidence of benefit fraud. The government maintains that the system is intended to identify possible eligibility problems rather than establish guilt.
A flagged account must be assessed through a separate process, and the department cannot make an entitlement decision solely on the information received through an EVN.
The introduction of eligibility verification follows the DWP’s decision to cancel a separate procurement project involving open banking technology. The department had begun searching for a strategic supplier in May 2025 to support account verification and the voluntary sharing of financial information for Universal Credit.
A February 2025 procurement notice outlined plans for a system allowing claimants to share bank balances and transaction information, alongside the verification of bank account ownership. In January 2026, the DWP said the procurement was approaching its final stages.
Ecospend, which had developed a Universal Credit Open Banking proof of concept with the department in 2024, was believed to have been identified as a preferred supplier through the competitive process. The department subsequently abandoned the project in June 2026, citing changing delivery priorities.
The earlier proposal relied on claimants consenting to share their financial information through open banking, a requirement the DWP later explained meant the approach could not be applied to every Universal Credit claim. The new Eligibility Verification Measure operates through statutory notices issued to financial institutions rather than claimant-authorised access to banking data.
The introduction of bank account verification coincides with changes to benefit payments scheduled for the 2027/28 financial year. The DWP has confirmed that most working-age and disability-related benefits will increase by 3.5%, reflecting consumer price inflation in the year to September 2026.
Most updated rates will take effect on April 12, 2027. Attendance Allowance, a non-means-tested benefit for eligible people aged 66 and over who require support because of disability or serious health conditions, is among the payments expected to increase.
Current weekly payments of £76.70 and £114.60 could rise to approximately £79.38 and £118.61 respectively, although the final figures have not yet been confirmed. The estimated annual amounts would be £4,127.76 and £6,167.72.
Unlike means-tested benefits, Attendance Allowance eligibility does not depend on the recipient’s savings or income.
State Pension payments will increase by 3.9%, reflecting average earnings growth and the government’s triple lock commitment. The full annual rate of the new State Pension is expected to rise by approximately £490, while the basic State Pension will increase by around £375 annually.
The standard minimum guarantee within Pension Credit will also rise by 3.9%, reaching £247.30 per week for a single pensioner and £377.40 for a couple. Work and Pensions Secretary Pat McFadden said the increases would protect pensioners’ incomes while maintaining inflation-linked adjustments to other benefits.
The DWP’s new bank verification powers will initially operate under a test-and-learn approach, with independent monitoring required before broader deployment.
