DWP targets state pensioners and three benefits in crackdown | Personal Finance | Finance

The DWP has confirmed it will target state pensioners on Pension Credit and two other common benefits with bank checks to clamp down on fraud.

The Department for Work and Pensions has issued more detail on its plans to clamp down on ‘incorrectly paid’ benefits in a new law, the Public Authorities (Fraud, Error and Recovery) Bill. It has clarified what it calls its ‘Eligibility Verification Powers’ under the new law and the key benefits it will target. The DWP says the changes will focus on Universal Credit, Pension Credit and Employment and Support Allowance because these are the benefits “where incorrect payments are currently highest”.

Pension Credit can only be claimed by state pensioners. The benefit is a top-up for pension income for those with a low weekly income. The DWP looks at a pensioner’s state pension, private workplace pension and savings in total and then issues a top up to their state pension if their income is too low – usually about £218 a week is the cut off. For example, those on the old basic state pension, which pays out £176.45 per week max, will often be able to qualify for Pension Credit and lift their weekly payment to about £220 a week.

Universal Credit is a catch-all benefit which is slowly replacing a host of other benefits including Tax Credits, and also encompasses various benefits for families as well as low income support.

Employment and Support Allowance is a benefit which helps those with health conditions who are unable to work.

The DWP said about its new powers to check bank accounts of those on benefits: “This new measure in this Bill will give DWP the power to require banks and other financial institutions to provide information to help verify a claimant’s entitlement to benefits and identify incorrect payments.

“Banks and other financial institutions will be required to look at the data they hold on accounts in receipt of a specified DWP benefit payment and match these accounts to specific eligibility indicators determined by DWP (and defined within an Eligibility Verification Notice) and highlight where the criteria have been met.

“This power can only be used to obtain information on accounts that receive a specified DWP benefit, and any accounts linked to that benefit receiving account if they match the eligibility indicators set by DWP.

“The eligibility indicators in the notice are the specific criteria that banks and other financial institutions will be asked to check relevant accounts against. They will be based on the eligibility rules for the specified benefits. For example, in Universal Credit, an individual cannot hold more than £16,000 in savings and remain eligible for Universal Credit, unless this capital is a result of a specified exception.

“Any accounts identified will be considered by DWP for further inquiry, if necessary. No decisions about benefit entitlement will be made on this information alone.”

Although the changes will target state pensioners who claim Pension Credit, it won’t target the state pension itself.

It continued: “The measure will initially focus on benefits where incorrect payments are currently highest, these are: Universal Credit, Pension Credit and Employment and Support Allowance. Other benefits could be added with the approval of Parliament in the future through affirmative regulations. The State Pension is explicitly excluded from the power and cannot be added by regulations.”

The DWP added that the information it finds during its checks could help determine that a claimant is ineligible for multiple benefits at once.

It added: “When information obtained by DWP in response to an Eligibility Verification Notice subsequently helps identify that a claimant is ineligible for a specified benefit, DWP may also use the information to verify the claimant’s eligibility for other benefits.

“For example, where a claimant is eligible for Pension Credit they may also be automatically eligible for Housing Benefit. If information received leads DWP to conclude that a claimant is ineligible for Pension Credit, then the Department will also review the claimant’s eligibility for Housing Benefit. A human will always be involved in any decision which may affect benefit awards or eligibility.”