New rules could see bank accounts being monitored in a DWP crackdown against fraud.
The Department for Work and Pensions has been exploring legislative measures to help reduce levels of fraud, error and debt in the benefits system. But now, new rules could mean thousands will be prosecuted and even sent to prison.
New powers currently going through Parliament would mean the UK’s top 15 banks will continuously monitor the accounts of people on benefits and inform the DWP if someone is suspected of cheating the system, BirminghamLive reports. It aims to target those claiming more benefits than needed as well as undeclared income.
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The new system will likely be rolled out in 2025, however some banks may not be on board for a further five years. The DWP estimates it will cost around £30 million a year for them to investigate potential fraud identified by the new system but will save taxpayers £500 million a year through reduced fraud and error.
Officials have also estimated that over the first 10 years, the new powers will result in an extra 74,000 prosecutions and 2,500 custodial sentences. During a debate on the new Data Protection and Digital Information Bill, which has now passed its third reading in the House of Commons, concerns were raised by Sir Stephen Timms, Labour MP for East Ham and chair of the Work and Pensions Committee.
He was concerned that the measures would also be used to look into the bank accounts of people claiming the State Pension. However, Sir John Whittingdale, Conservative MP for Maldon and Minister of State in the Department for Culture, Media and Sport and the Department for Science, Innovation and Technology, said it was “narrowly focused.”
He added: “It will ensure that where benefit claimants may also have considerable financial assets, that is flagged with the DWP for further examination, but it does not allow people to go through the contents of people’s bank accounts. It is an alarm system where financial institutions that hold accounts of benefit claimants can match those against financial assets, so where it appears fraud might be taking place, they can refer that to the Department.”
He went on to say State Pension will not be an area of focus, but the system is about “ensuring that means-related benefit claimants are eligible for the benefits for which they are currently claiming”. He added: “In doing that, the identification and the avoidance of fraud will save the taxpayer a considerable amount of money.”
Individuals claiming Universal Credit and Employment and Support Allowance can have up to £6,000 in savings before deductions are applied to their payments and £16,000 before they are no longer entitled to receive any benefits at all. Universal Credit claimants may also need to inform job centre coaches of time abroad.
Sir Chris Bryant, Labour MP for Rhondda and Shadow Minister for Creative Industries and Digital, said it includes the bank accounts of anyone in the UK “in receipt, or having been in receipt, of State Pension, Universal Credit, Working Tax Credit, Child Tax Credit, Child Benefit, Pension Credit, Jobseeker’s Allowance or Personal Independence Payment”.
He went on to say: “We should of course be tackling fraud. The Government have completely lost control of fraud in recent years, with benefit fraud and error skyrocketing to £8.3 billion in the last financial year. The Minister seemed to think that it was a good thing that he could cite that figure. The year before, it was even higher – a record £8.7 billion. On the Conservative party’s watch, the percentage of benefit expenditure lost to fraud has more than trebled since Labour was last in power.
“Let me be absolutely clear: Labour will pursue the fraudsters, the conmen and the claimants who try to take money from the public purse fraudulently or illegally. That includes those who have defrauded the taxpayer over personal protective equipment contracts, or have not declared their full income to His Majesty’s Revenue and Customs. Defrauding the taxpayer is one of the worst forms of theft. It is theft from all of us. It undermines confidence in the system that so many rely on. It angers people when they abide by the rules and they see others swinging the lead and getting away with it.
“I back 100% any attempt to tackle fraud in the system, and we will work with the Government to get the legislation right, but this is not the way to do it, because it is not proper scrutiny.”
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William Turner is a seasoned U.K. correspondent with a deep understanding of domestic affairs. With a passion for British politics and culture, he provides insightful analysis and comprehensive coverage of events within the United Kingdom.
