The DWP is getting new anti-fraud powers (Image: Getty)
Major new powers are coming into force to clamp down on fraud in the DWP benefits system. New measures which have been put into law will allow investigators to require bank account information for accounts linked to benefit payments.
Officials will also be able to directly take funds from people’s bank accounts if they owe the DWP funds and are refusing to pay up. Fraud investigators are also getting greater powers to require people to hand over information.
Included in the new powers are eligibility checks, where banks will be contacted by the DWP to hand over details about accounts linked to specific benefits. These measures will be used to check the details of those claiming Universal Credit, Employment and Support Allowance and Pension Credit.
However, the legislation sets out that this could be expanded to other benefits. Bank providers will be tasked with flagging up any accounts which may not be eligible to receive their payments and pass on the details to the DWP, to be looked into further.
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The DWP has confirmed it will not have direct access to people’s bank accounts under the new powers. Officials will start to use the powers after a consultation period and several codes of practice for the new measures have been approved by Parliament.
There will also be a ‘test and learn’ phase for the deployment of the powers, to ensure they are used properly. Security experts have raised concerns that it’s important these new measures are used correctly.
‘Incorrect rejections’
Stuart Morris, chief technology officer at compliance technology provider SmartSearch, said: “There is a risk that some claimants could feel anxious about the introduction of these powers, even when they have provided accurate information, because any system involving increased monitoring or automated checks can create concern if people don’t fully understand how decisions are made.
“Research shows that automated systems can flag legitimate cases as suspicious if they’re not properly calibrated. The challenge for the DWP is ensuring their systems are accurate enough to catch fraud while minimising incorrect rejections of genuine claimants.”
A DWP spokesperson said previously: “We have an obligation to protect public funds, with this legislation set to save the taxpayer £2.1billion over the next five years, part of wider plans that will save £14.6billion. The legislation includes an eligibility verification measure which will require banks to share limited data on claimants who may wrongly be receiving benefits. It does not involve access to benefit claimants’ bank accounts.”
Directly deductions from bank accounts
The new laws also provide powers for DWP officials to directly take an amount from a person’s bank account. This measure will only be deployed when a person owes the department funds and is refusing to settle the amount.
These new direct deduction powers are intended to claw back funds from people who have left the benefits system. The DWP could previously only recover debts through benefit deductions or from a claimant’s PAYE earnings.
In cases where investigators plan to use these powers, they will first contact the person to give them a chance to dispute the matter. They will also contact the bank provider to request at least three months of bank statements for the account, to make sure the person has the funds available.
Expanded powers for fraud investigators have also been brought in as part of the suite of new powers. Previously, they could only demand information from people on a restricted list, but now they can contact any third party connected to a suspect, to request the details they need.
Mr Morris said it’s important to have proper transparency and communication about the use of the new powers. He urged: “Claimants should know what information is being checked, why it’s being checked, and what safeguards are in place if errors occur. Independent oversight, fast appeals processes, and the use of multiple trusted data sources can all help minimise false positives and prevent innocent people from being unfairly penalised.”
The legislation sets out that an independent person will be appointed to oversee the use of the powers. They will check to see that the powers are only used when appropriate and that they are effective.