The Department for Work and Pensions (DWP) has confirmed new measures to tackle fraud in the welfare system will not give investigators access to claimant bank accounts or see how they spend any benefit payments.
However, Work and Pensions Secretary Liz Kendall announced on Tuesday the new ‘Eligibility Verification’ measure will “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” adding this will “help DWP identify incorrect payments, prevent debts from accruing for the claimant and help identify where there may be fraudulent activity”.
The DWP boss made it clear the ‘Fraud, Error and Debt Bill’ will ensure banks “only share very minimal information” which will “only be used by DWP to support further inquiry, if needed, into a potential overpayment”.
The DWP pays benefits to around 22.7 million people across Great Britain.
Fraud and error in the welfare system currently costs the taxpayer almost £10 billion each year and since the pandemic a total of £35bn has been incorrectly paid to those not entitled to the money, however, it’s important to be aware this also includes criminal gangs, not just benefit claimants.
Ms Kendall explained the measures in this Bill are expected to save up to £1.6bn over the next five years and will “extend and modernise DWP’s powers to stop fraud in its tracks, recover money lost to fraud and, crucially, help protect claimants who may already be on the edge financially from racking up debt”.
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.
She continued: “We will introduce safeguarding, reporting mechanisms and independent oversight, to give greater confidence to claimants that the powers are being used fairly and effectively.”
This will be achieved through staff training on the use of any new powers.
The Work and Pensions Secretary also highlighted how some of the DWP’s fraud powers have not been updated for over 20 years and are currently “misaligned” with other government departments and public bodies such as HM Revenue and Customs (HMRC).
New DWP fraud measures
The measures in this Bill will remedy that, giving DWP powers to:
- Better investigate suspected fraud and new powers of search and seizure, so DWP can take greater control of investigations into criminal gangs defrauding the taxpayer.
- Make changes to the penalties system, so no one found to have committed fraud against the social security system avoids punishment, bringing increased fairness for claimants who do the right thing.
- Allow DWP to recover debts from individuals who can pay money back but have avoided doing so, bringing greater fairness to debt recoveries.
- Eligibility Verification – 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.
Ms Kendall added: “The powers in this Bill will be legal, proportionate and targeted to reduce overpayments, detect and prevent fraud, ensure prompter investigations and bring greater fairness to the system.”
Eligibility Verification
The DWP boss explained: “The Eligibility Verification measure will not give DWP access to any bank accounts, nor any information on how claimants spend their money.
“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.”
She added this measure will not be used on the State Pension.
Further details on the legislation will be set out when the Bill is introduced to Parliament shortly.