DWP Publishes Guidance on New Bank Monitoring Powers
The Department for Work and Pensions (DWP) has released official guidance detailing how banks and financial institutions will be required to monitor benefit claimants' accounts under new Eligibility Verification powers. The measures are part of the UK Government's broader crackdown on welfare fraud and error, initially targeting recipients of Universal Credit, Pension Credit, and Employment and Support Allowance (ESA).
Under the Eligibility Verification Measure (EVM), banks may be asked to examine accounts receiving certain DWP benefits and flag those meeting specific “eligibility indicators” linked to benefit rules. The DWP states these checks aim to identify incorrect payments caused by fraud, claimant error, or official error, while also preventing large overpayments that later require repayment.
Key Indicators Banks Must Look For
According to the Code of Practice on Eligibility Verification Notices, banks could be required to flag accounts where savings exceed benefit thresholds. For Universal Credit, this includes accounts holding more than £16,000, the upper capital limit for the benefit. The DWP may also request information linked to signs that a claimant has spent more time abroad than benefit rules normally allow.
However, the DWP emphasizes strict legal limits on what banks can share. Financial institutions are prohibited from sharing transaction information, meaning the DWP cannot see what people buy, where they shop, or individual spending habits. Banks are also banned from sharing “special category data,” including political opinions, religious beliefs, ethnicity, or health information.
The guidance states: “DWP is prohibited by law from sharing personal data with financial institutions under this power, and from requesting transaction information and special category data.”
What Banks Cannot Share
The document makes clear that the DWP cannot ask banks to search for named benefit claimants. Financial institutions are prohibited by law from sharing transaction histories, spending information, financial statements, and special category data such as political opinions, religion, or ethnicity. Instead, financial institutions will apply eligibility criteria across their own systems and only return limited information where accounts match the indicators set out in an Eligibility Verification Notice (EVN).
Information that may be shared with the DWP includes account details, names and dates of birth linked to accounts, and details showing how an account met the eligibility indicator. Examples include confirmation that savings exceeded a certain amount or evidence that an account had been consistently used outside the UK.
No Automatic Decisions on Benefit Entitlement
The DWP stressed that information returned by banks does not automatically mean somebody has done anything wrong. The Code states: “No decisions about benefit entitlement will be made automatically on this information alone.” DWP must instead review the information alongside other evidence already held on a claim before deciding whether further checks are needed.
Test and Learn Rollout Phase
The guidance confirms there will be a “Test and Learn” rollout phase involving a small number of financial institutions before wider expansion. During this period, the DWP will assess how well the system works, how accurate the data is, and whether safeguards are operating effectively before broader implementation. The DWP estimates benefit fraud and error resulted in £9.6 billion of overpayments during the 2025/26 financial year.
