In an effort to block benefit fraud, the government could be granted the ability to inspect people’s bank accounts.
The proposed legislation is facing concerns from senior MPs that it would be a “step too far”. The measures would cover all social security payments including the state pension.
Coming as part of the data protection and digital information bill, the plans would involve banks handing over customer data to the Department for Work and Pensions (DWP) in the case that a claimant may not meet the eligibility criteria for their benefit(s).
At the moment, the DWP believes an estimated £8 billion is lost every year to fraud and overpayment. In particular, Universal Credit is suspected to be an area where significant overpayments have been found.
As a result, the new laws aim to prevent fraud and overpayments across the board, meaning people accepting benefits in multiple areas could be affected.
Sir Stephen Timms, chair of the Work and Pensions committee, has pushed for clearer reasons as to why certain social security payments should be covered by the rules.
He told the Telegraph: Ministers should take new powers to intrude into the lives of citizens only when absolutely essential. What is being proposed is a step too far. With means-tested benefits like Universal Credit, it is clear why ministers want such powers. But the Government has not made a convincing case for taking these powers for the state pension, Personal Independence Payment or child benefit. In fact, there appear to be no firm plans for using the powers at all.
“The Government has a chance to put things right as the legislation progresses through the Lords by dropping the unnecessary parts of these plans.”
A DWP spokesman said in an official statement: “This is not a surveillance power, and it does not allow DWP to access bank accounts or see how claimants or pensioners are spending their money.
“Despite State Pension overpayments due to fraud currently sitting at 0.0 per cent, it is important to ensure that if fraud and error do arise in the future we have the tools to address them.”
Can the DWP currently check bank accounts?
At the moment, the DWP can only check someone’s bank account if they already suspect they could be committing fraud.
Claimants are themselves responsible for reporting any changes in their financial circumstances that could disqualify them from benefits.
