The Department for Work and Pensions (DWP) can now check state pensioners' bank accounts and find out exactly how much money is in them, with the power to issue fines to anyone claiming Pension Credit incorrectly or fraudulently.
New powers announced on Tuesday allow the government to directly obtain information from banks and building societies to check for fraud. The new Eligibility Verification Measure (EVM) powers require banks and other financial institutions to provide information when requested by the DWP to 'identify incorrect benefit payments'. Those receiving Pension Credit are among those affected.
How the new powers work
Currently, to receive Pension Credit, you must be a state pensioner receiving state pension payments. But Pension Credit is means-tested, and only those who earn under the thresholds are eligible. 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.
The DWP will now use its new powers to check if state pensioners are claiming the benefit fraudulently. This means the DWP can find out various pieces of information about you without needing your permission, including the names of account holders, the account numbers, how much money is in the accounts, and the date of any transactions if they took place in another country.
What the DWP cannot see
The DWP stressed that it 'cannot log into your online banking or see your account in real time'. It also cannot see 'full statements or transactions', won't be able to see how you spend your money, won't be able to locate specific transaction locations, or obtain 'sensitive personal information about your background, such as political opinions or religious beliefs'.
The DWP urged anyone whose circumstances have changed, and therefore may no longer be eligible to receive the benefits they are currently receiving, or receive them at the same level, to get in touch to report a change of circumstances as 'soon as possible'.
Consequences of incorrect claims
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."
With the information shared by your bank, the DWP says it can then contact you to ask follow up questions which could result in your benefits being delayed or stopped entirely. 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."
The DWP added: "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."
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.
