The Department for Work and Pensions is set to be granted new powers
The Department for Work and Pensions (DWP) is stepping up its game to combat benefits fraud by planning checks on claimants’ bank accounts. New proposed powers could see the government department working more closely with banks and building societies to monitor individual accounts for any signs of a breach in benefit rules.
These far-reaching measures are set to start trials this year, initially with bank account inspections, with later plans to escalate to confiscating items, property searches, and withdrawing funds directly from bank accounts. While it’s still unclear which benefits will come under scrutiny, the government has hinted that these bank surveillance powers will be primarily used to verify adherence to benefit eligibility.
Earlier this year, it stated: “New requirements for banks and building societies to flag where there is an indication that there may be a breach of eligibility rules for benefits – preventing debts accruing.”
Currently, the DWP can only ask for transaction details from banks if there’s a justified suspicion of fraud. Government stats have reportedly lost a staggering £8.3 million to fraud and error within the welfare system during the 2022/23 period.
The DWP has confessed to having dished out a whopping £894 million in benefits to individuals who didn’t declare their earnings as being too high. Even though claimants are expected to notify the DWP of any income changes, fresh proposals under the Data Protection and Digital Information Bill could compel banks and building societies to automatically report account details where benefits are deposited to the DWP.
A government review on the proposed policy revealed: “The policy has been designed in collaboration with operational colleagues, whereby a period of ‘test and learn’ will begin in 2025 with a limited number of banks and building societies.”
It further stated: “The purpose of this approach is to get the data sharing agreement between DWP and third-party data holders right, before implementing the policy on a larger scale. After the focused test and learn, the policy will begin gradual roll-out (from 2027/28), with it reaching full scale by 2030/31.”
‘Unprecedented financial surveillance powers’
These incoming policies have raised the eyebrows of privacy watchdogs and disabled rights campaigners. Big Brother Watch’s Jasleen Chaggar expressed her concerns to parliament members: “On the eligibility verification measures – what we are calling the bank spying powers – we are recommending that they be removed in their entirety.
“These really are unprecedented financial surveillance powers. There are no other laws like this in this country. They permit generalised mass surveillance of everybody’s bank accounts.
“It is not just benefits claimants who will be targeted; it is everyone’s accounts, including yours and mine, will be scanned using algorithmic software to make sure that these eligibility indicators are not met.”
She added: “Even if you are a benefits recipient, you can appoint an individual – a parent, a guardian, an appointed person or your landlord – to receive the benefit on your behalf, so these people will also be pulled into the net of surveillance. We do not really see a way in which these measures could ever be proportionate.”
Disability Rights UK also warned that the prospective use of algorithms to sift through a large amount of accounts could constitute an infringement on the right to privacy and could also result in false positive matches for benefit fraud or error. It highlighted that disabled people who depend on care and support may wrongly trigger fraud detection and have their benefits suspended as a result.
It notes that this is because many disabled people on benefits set up their bank accounts to pay for their social care – accounts which hold capital and may be misidentified as fraudulent. Mikey Erhardt, Policy Officer at DR 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.”
At the time of writing, the Data Protection and Digital Information Bill had reached the Committee Stage in the House of Lords, further details can be found here.