A disability advocate charity has warned over the adverse affects of new proposed powers that could allow the Department for Work and Pensions (DWP) to carry out bank account checks.
The Data Protection and Information Bill, which is currently being debated in the House of Lords, could give the DWP new powers to scrutinise the financial transactions of those receiving benefits. Under current rules, the DWP is only able to request the details of a bank account holder’s transactions as long as it has reasonable grounds to suspect fraud is taking place.
According to government figures, £8.3 million was lost to fraud and error in the welfare system in 2022/23. Claimants are responsible for informing the DWP of any changes in circumstances that could affect their benefits, but under new proposals in the Data Protection and Digital Information Bill, banks and building societies would be mandated to share data with the DWP on all accounts where benefits are deposited.
However, Disability Rights UK warned that the proposed powers could unfairly punish those claiming disability benefits. Mikey Erhardt, Policy Officer at Disability Rights UK, said: “These powers are a sledgehammer to crack the tiniest nut.
“These new powers would see disabled people deprived of the presumption of innocence, adding to the victimisation we already face in a punitive welfare system that often seeks to sanction people into work.”
Meanwhile, legal advice given to Big Brother Watch raised concerns over the reach the powers would provide the DWP. Dan Squires KC and Aidan Wills of Matrix Chambers, who issued the legal advice, said: “It is clear that the purpose of the new proposed powers is to carry out monitoring of bank accounts where there are no ‘reasonable grounds’ for believing a particular individual has engaged in benefit fraud or has made any mistake in claiming benefits.”
“There are real doubts about whether the exercise of the powers would be proportionate if they were used for detecting mistakes in claims made by people in receipt of benefits or the DWP’s own errors in payment of benefits.”
Clarification of powers
DWP minister Andrew Western clarified the significance of the new powers. He told MPs: “More than 50 per cent of the fraud and error that we see in Pension Credit comes from two principle sources, which the eligibility verification measure specifically seeks to address. One is the issue of capital fraud, where there is a relatively easy indicator.”
Mr Western shed light on the vital role of bank checks, which include monitoring travel patterns to identify if individuals have exceeded the permitted time abroad which might lead to them being ineligible for benefits. He continued: “The provision also has the benefit of helping us to establish when somebody has been out of the country for longer than their benefit entitles them to be.
“For instance, it would provide a flag on an account when somebody’s bank account suggested they had been making purchases abroad and so on.”
He continued: “We would not receive the transactional data or know specifically where the purchases were made but it would give us specifically the date that somebody left the country, and thereby show whether they were in breach of the length of time they are allowed to be away.”
Green Party representative Sian Berry also scrutinised elements of the bill which could impact verification methods, warning: “These powers will drag nearly 10 million people directly into a net of intrusive financial surveillance, as well as those appointed to receive benefits on their behalf, including parents, carers, appointed people and landlords.”
Berry further highlighted: “Given that several of these benefits have eligibility requirements based on household income, we are bringing in family members as well.”