The Department for Work and Pensions (DWP) has been granted new powers to directly obtain information from banks and building societies to carry out bank account checks on Pension Credit claimants, with penalties issued for benefit fraud or incorrect claims.
The new Eligibility Verification Measure (EVM) powers, announced on Tuesday, will compel banks and other financial institutions to hand over information upon request from the DWP to 'identify incorrect benefit payments'. Those in receipt of Pension Credit are amongst those who will be impacted by the new measures.
How the new checks will work
At present, to qualify for Pension Credit, you must be a state pensioner receiving state pension payments. However, Pension Credit is means-tested, meaning only those whose income falls below certain thresholds are entitled to claim.
Pension Credit tops up your weekly income to £238 if you're single or £363.25 if you're in a couple. The state pension, other private pensions, earnings from work and self-employment and other benefits like Carer's Allowance, all count as income which could reduce your eligibility or payments.
What information the DWP can access
The DWP will now be able to deploy its new powers to establish whether state pensioners are claiming the benefit fraudulently. This means the DWP will be in a position to access various details about your finances without requiring your consent. This includes account holders' names, account numbers, current balances, and the dates of any transactions carried out abroad.
The DWP stressed that it 'cannot log into your online banking or see your account in real time'.
Penalties and next steps
The DWP has urged anyone whose situation has changed — and who may therefore no longer be entitled to the benefits they are currently receiving, or at the same level — to report a change of circumstances as 'soon as possible'.
The DWP adds: "If you give wrong or incomplete information, or do not report a change in your circumstances, you may: need to pay back any money you are overpaid if you are asked to be prosecuted need to pay a fine."
Using the information obtained from your bank, the DWP says it may then contact you with follow-up questions, which could result in your benefits being delayed or stopped altogether. It said: "If information shared by your bank suggests you may be getting an incorrect benefit payment, DWP will review your claim. The review might find that: you're not eligible for the benefit you're claiming the amount you're receiving is incorrect."
"DWP may ask you to answer questions about your eligibility or ask you to provide further information to support your benefit claim. DWP will contact you through your online journal if you have an online account set up. If you do not have an online account, DWP may contact you by phone, letter or text message. You should respond as soon as possible to avoid your benefit payments being delayed or stopped."
The DWP clarified that it will be unable to view 'full statements or transactions', monitor how individuals spend their money, pinpoint specific transaction locations, or access 'sensitive personal information about your background, such as political opinions or religious beliefs'. It added: "An independent reviewer will check that DWP, banks and other financial institutions have followed the law, amongst other things. Their reports will be presented to Parliament."
