The Department for Work and Pensions (DWP) has released an update on new powers coming into law that will enable officials to request claimants’ bank statement details in cases of suspected benefit fraud. Investigators will have the authority to ask for three months’ worth of a person’s bank statements, or even longer, to verify they have enough funds to repay an amount owed to the DWP.
If the individual refuses to pay, officials will then have the power to directly deduct funds from their account. However, the DWP has clarified that it will not directly access people’s bank accounts.
The Government was questioned about whether it had considered holding a public consultation on these new anti-fraud measures, which are part of the Public Authorities (Fraud, Error and Recovery) Bill. In response, DWP minister Andrew Western stated: “DWP continues to seek feedback on the bill through regular engagement with key stakeholders, including at official and ministerial level.
“This will ensure the measures are designed to be effective and take into consideration wider feedback from the financial sector, welfare organisations, business representative organisations and others.” On the topic of a consultation, Mr Western added: “There will be codes of practice for the eligibility verification measure, information gathering and debt recovery powers, which DWP will publicly consult on before publication.”
Neil Couling, senior responsible owner of Universal Credit, spoke recently about the circumstances under which the new powers may be used. He emphasised to the Work and Pensions Committee that individuals will be given chances to settle the amount before any deduction takes place, saying: “We give the opportunity for people to pay this money back. We don’t go straight to these powers. These are conversations.”
Claimants will receive a minimum notice period of 28 days before any deductions, with an invitation during this time to dispute the amount owed. Mr Couling further clarified the intentions behind the process: “The whole process and the point of the powers is designed to encourage people to pay what they owe.
“It’s not that we say you’re a fraudster, we’re going straight to your bank account, it just doesn’t work in that way.” Despite the protective measures around how the powers will be used, there have been serious concerns raised that such powers may be applied incorrectly, potentially targeting innocent individuals.
Sebrina McCullough, director of external relations at Money Wellness, stressed the importance of differentiating between “intentional fraud” by criminal groups and simple mistakes by those struggling with a complex benefits system. She explained: “It’s paramount that the Government distinguish ‘intentional fraud’, where, for example, large-scale fraud committed by criminal gangs are exploiting vulnerable individuals, from genuine errors made by people trying to navigate an outdated, overly complex system.
“Any legislation must consider how to prevent fraud, as well as how to use the data available to proactively engage people who should be claiming but clearly do not know they are entitled to additional benefits. The system must be simplified and streamlined.”