DWP to ‘test and learn’ by monitoring bank accounts (2025)

A range of new measures to crackdown on fraud will be introduced

The “biggest fraud crackdown in a generation” was announced by the UK Government earlier this year. The new Public Authorities (Fraud, Error and Recovery) Bill is meant to save over £1billion by giving the DWP new powers to investigate and recover money fraudulently claimed through the benefits system.

Now, the DWP has officially confirmed the date this will be implemented as it released a string of factsheets detailing all the new measures. It read: “The Government will begin implementing the Bill measures from 2026.”

One of the measures that struck a chord of concern for most benefit recipients is the Eligibility Verification Measure. This will require banks and financial institutions to “examine their own data” and report back to the DWP.

This can help the department crackdown on fraud by highlighting people who might not qualify for the benefit or amount they are claiming. For example by having too much in savings or receiving an income increase that hasn’t been reported to the DWP.

However, it has been emphasised that the DWP will not get direct access to the bank accounts of claimants. It will also not be able to see information on how claimants spend their money. To ensure benefit claimants still feel protected, banks will only be allowed to share limited information with the DWP. Institutions that share too much of your information could actually receive a penalty.

The fact sheets highlighted: “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.”

According to the Daily Record, the DWP will also be able to gather information from more third-party organisations such as airlines to check if people are claiming benefits from abroad and potentially violating eligibility rules.

Elsewhere in the Bill, the DWP will also get new recovery powers. This could allow them to recover debts or fraudulently claimed benefit money directly from an individual’s earnings or bank accounts.

Some of the new punishments for benefit fraudsters extend beyond finances. Fraudsters who repeatedly fail to pay back their debts could be facing a driving ban of up to two years.

Other changes in the Bill include:

• 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 that 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.