The Department for Work and Pensions (DWP) has recently outlined a significant shift in its approach to fraud prevention, particularly regarding claimants’ bank accounts.
According to the DWP, the upcoming measures will target the most vulnerable benefits, such as Universal Credit, Pension Credit, and Employment and Support Allowance (ESA), with a major focus on tackling fraudulent claims.
DWP’s Plans for Bank Account Checks
In a set of comprehensive fact sheets, the DWP has revealed the timeline for the implementation of bank account checks, which are aimed at identifying fraudulent activity among claimants.
The checks will be part of a broader crackdown that will give the government the authority to thoroughly examine the bank accounts of those claiming certain benefits.
The focus will be on benefits with the highest rates of fraud, such as Universal Credit, Pension Credit, and ESA.
These measures are part of a larger effort by the DWP to bolster fraud prevention, ensuring that claims are valid and that any misuse is swiftly detected.
Timeline and Implementation of New Powers
The Bill to introduce these powers was brought to the House of Commons on January 22, 2025. The DWP has stated that the measures outlined in the Bill will be implemented gradually, with a full rollout beginning in 2026.
This new legislation will affect several aspects of public sector fraud prevention, including the verification of eligibility for various benefits.
According to the DWP’s explanatory notes, this approach will be executed in phases. The initial stages will begin with a “test and learn” process to gauge the effectiveness of the new measures. This process will ensure that the implementation of these powers is carried out fairly and proportionately.
Development of Codes of Practice
The DWP has emphasized the importance of developing Codes of Practice (COP) for the application of these measures. These codes will outline the rules and procedures that government bodies, third parties, and industry stakeholders must follow when using the new powers.
Input from all relevant parties will be sought during the development of these Codes, ensuring transparency and fairness in their application.
In addition to the measures outlined in the Bill, the DWP and the Public Sector Fraud Authority (PSFA) will work together to ensure that the process is carried out in a manner that aligns with legal standards and best practices.
Safeguards and Oversight
To ensure that these new powers are implemented appropriately, the Bill includes strong safeguards, such as independent oversight and reporting mechanisms.
These safeguards are designed to prevent misuse and ensure that the powers granted under the Bill are used effectively and fairly.
The DWP and PSFA will be held accountable for the proportional and effective delivery of these measures, with the independent oversight ensuring compliance with the Codes of Practice.
Impact on Universal Credit and Other Benefits
The DWP has committed to cracking down on fraudulent claims, including by legislating for new powers to address issues related to Universal Credit claims.
The government has also hired thousands of staff members to ensure that the claims for Universal Credit are being processed accurately and without error.
These updates, initially proposed by the Conservative Party, have continued under the Labour administration, despite some controversy and pushback.
The new fraud prevention measures have sparked a mix of reactions, with critics expressing concerns over privacy and the potential for overreach, while supporters argue that these actions are necessary to safeguard taxpayer money.
The DWP’s new crackdown on fraud, including bank account checks, marks a significant shift in the way benefits will be managed. While the aim is to protect the public purse by tackling fraudulent claims, it also raises important questions about privacy and the fairness of implementation.
With strong safeguards and independent oversight, the DWP hopes to ensure these measures are both effective and fair. The phased implementation, starting in 2026, will be crucial in determining the long-term success of these initiatives.
FAQs
When will DWP start implementing the new bank account checks?
The DWP will begin implementing the new bank account checks in January 2026, with the first phase beginning as a “test and learn” process to ensure fairness and proportionality.
Which benefits will be targeted in this fraud crackdown?
The initial focus will be on benefits that are most susceptible to fraud, including Universal Credit, Pension Credit, and Employment and Support Allowance (ESA).
What safeguards are in place to protect claimants?
The Bill includes independent oversight, reporting mechanisms, and Codes of Practice to ensure the new powers are used fairly and in compliance with legal standards.