DWP bank checks, USA News: New bank checks targeting people claiming three benefits have begun as part of a major Department for Work and Pensions crackdown on fraud and error.
The DWP has issued its first Eligibility Verification Notice, requiring banks and other financial institutions to check information relating to some benefit-receiving accounts. The new system can be used in relation to Universal Credit, Pension Credit and Employment and Support Allowance (ESA).
It is designed to identify cases where someone may have savings which affect their entitlement or has remained abroad for longer than benefit rules allow. However, the DWP has stressed that the powers do not give officials access to people’s bank accounts, transactions or information about their spending habits.
Instead, financial institutions will be asked to check relevant benefit-receiving accounts against specified eligibility rules and flag cases where further investigation could be required. A flag will not itself mean somebody has committed benefit fraud or done anything wrong. The Government also says no decision about a person’s benefit entitlement can be made solely using information provided through the new system.
Undeclared savings and the amount of time claimants spend outside the country are two of the areas the Government hopes the checks will help identify. The DWP estimates fraud and error involving undeclared savings and time spent abroad in relation to Universal Credit and Pension Credit cost taxpayers £1.5 billion in 2025-26. The Eligibility Verification Measure is expected to generate £1.2 billion in savings by 2030-31.
Ministerial Comments
Minister for Innovation, Fraud and Debt Lilian Greenwood stated that benefit fraudsters should be looking over their shoulder, noting that the new powers will help crack down on those who deliberately abuse the system while ensuring people receive proper support. Greenwood emphasized that officials are unconcerned with routine shopping habits and that banks will simply identify if somebody may no longer meet rules.
Being flagged through the system will not automatically result in someone’s benefits being stopped. The DWP says a flag does not establish fraud or wrongdoing and further enquiries would have to be made. The measure is initially being introduced through a test-and-learn phase and will be subject to independent oversight before any wider rollout.
The powers were introduced through the Public Authorities (Fraud, Error and Recovery) Act 2025 and form part of the Government’s wider efforts to reduce fraud and incorrect benefit payments. Further measures are also planned, including 2,000 additional anti-fraud specialists being deployed to Jobcentres and tougher checks involving Universal Credit claims from people who have gone abroad. The Government says its broader package of measures is intended to save taxpayers £14.6 billion over the next five years.
