The Department for Work and Pensions is set to introduce new fraud-combatting measures – here’s what you need to know
This year, the UK Government announced what it calls ‘the biggest fraud crackdown in a generation’, aiming to significantly reduce the misuse of funds within the welfare system. The Department for Work and Pensions (DWP) believes that the new Public Authorities (Fraud, Error and Recovery) Bill will be instrumental in saving taxpayers a hefty £1.5 billion over the coming five years.
The bill introduces tough penalties, including driving bans of up to two years for persistent benefit fraudsters, as well as granting the DWP powers to directly seize funds from the bank accounts of those guilty of fraud. Additionally, the Eligibility Verification system will allow third parties, such as banks, to highlight suspicious benefit claims.
The DWP has published 11 new factsheets to clarify how these measures will be safely implemented and monitored. These documents outline that the UK Government plans to start implementing the proposed measures in 2026.
The factsheets also elaborate on the checks and balances, including reporting requirements and oversight mechanisms, designed to ensure that the new powers are used in a manner that is ‘appropriate, proportionate, and effective’. According to the Daily Record, advice from GOV.UK states: “The Government will begin implementing the Bill measures from 2026.
“For the Eligibility Verification Measure, the Government will implement a ‘test and learn’ approach to ensure the new powers to tackle public sector fraud are being used proportionally and effectively. DWP and the Cabinet Office will continue to work with industry to implement the new measures, consult stakeholders on Codes of Practice and publish guidance.”
The DWP will also gain the ability to gather data from additional third-party organisations, such as airlines, to confirm whether people are claiming benefits from abroad, potentially violating eligibility rules.
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Eligibility Verification Measure explained
It’s vital to note that the DWP won’t have direct access to the bank accounts of millions of people receiving means-tested benefits like Universal Credit, Pension Credit and Employment and Support Allowance.
The DWP will work alongside banks to identify people who may have surpassed the eligibility criteria for means-tested benefits, such as the £16,000 income limit for Universal Credit. Using this information, the DWP will scrutinise the claimant to prevent potential overpayments and possible fraud cases.
The legislation only allows banks and other financial institutions to share limited data and forbids the sharing of transaction data, meaning the DWP won’t be able to see how benefit recipients spend their money.
Indeed, the factsheet makes it clear that banks and other financial institutions could face penalties for oversharing information, including transaction details.
It adds: “Any information shared through the Eligibility Verification Measure will not be shared on the presumption or suspicion that anyone is guilty of any offence.”
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New DWP steps to combat fraud
The upcoming Bill will uphold the UK Government’s manifesto promise to safeguard taxpayers’ money, ensuring every pound is spent wisely and effectively:
- New powers of search and seizure – so DWP can control investigations into criminal gangs defrauding the taxpayer.
- Allowing DWP to recover debts from individuals no longer on benefits and not in PAYE employment who can pay money back but have avoided doing so.
- New requirements for banks and building societies to flag where there is an indication there may be a breach of eligibility rules for benefits – preventing debts accruing.
- All the powers will include strong safeguards to ensure they are only used appropriately and proportionately – including new inspection and reporting mechanisms.
- DWP will have a clearly defined scope and clear limitations for the use of all the powers it is introducing, and staff will be trained to the highest possible standards.
This Bill will empower the Public Sector Fraud Authority to:
- Improve fraud management in future emergencies by creating specialist time-limited powers to be used in crisis management situations – building on lessons learned during COVID-19.
- Reduce fraud against the public sector by using its expertise to take action on behalf of other departments, against those who attack the public sector.
- Improve the government’s ability to recover public money, through new debt recovery and enforcement powers.
- Use new powers of entry, search and seizure to reduce the burdens on the police in the most serious criminal investigations.
- Better detect and prevent incorrect payments across the public sector through new information gathering and sharing powers.
- Use strong non-criminal sanctions and civil penalties to provide an alternative to criminal prosecution and to deter fraud.
The Public Sector Fraud Authority will adopt a ‘test and learn’ strategy when using these powers, trialling various methods and expertise to discover the most effective way to combat public sector fraud.