The Department for Work and Pensions (DWP) is set to launch a significant new wave of financial scrutiny for millions of people receiving state support. Under freshly granted powers, the department will conduct real-time digital checks on the bank accounts of claimants to verify their eligibility for benefits.
Which Benefits Are Affected by the New Checks?
The initial focus of the DWP's enhanced investigation will be on four major benefits: Universal Credit, Employment and Support Allowance (ESA), Pension Credit, and Personal Independence Payment (PIP). The measures, passed as part of a new bill, will allow officials to contact banks directly to obtain information on accounts held by individuals claiming these payments.
Experts suggest this is just the beginning. Collette Smith, chief customer officer at SmartSearch, indicated that the scope could logically widen. "Eligibility checks could logically be extended to any benefit where identity and entitlement verification are important," she stated, citing Child Benefit, Carer’s Allowance, and Disability Living Allowance as potential future targets.
A "Test and Learn" Approach from 2026
The government has confirmed that these intrusive checks will not begin immediately. A "test and learn" approach will be adopted, with the new verification powers scheduled for implementation from 2026. This phased rollout is intended to ensure the powers are used proportionately and effectively.
Ms. Smith emphasised the importance of building public trust, warning that moving too fast could backfire. "Trust is key; extending the powers too quickly without demonstrating that safeguards work could undermine confidence," she explained. The DWP and Cabinet Office will work with industry stakeholders to develop Codes of Practice and guidance before the checks go live.
Direct Deductions and Licence Suspensions
The legislation encompasses more than just eligibility verification. It also grants the DWP formidable new recovery powers. Where a person owes money to the department and refuses to repay, investigators will now have the authority to take funds directly from their bank account.
DWP minister Andrew Western was clear about the intent: "If those who can afford to refuse to pay back what they owe, we’ll take the money straight from their accounts." Before any deduction, the individual will be notified and given a chance to dispute the claim. Officials must also review at least three months of bank statements to confirm sufficient funds are available.
In more severe cases, the department can suspend a person's driving licence. This power will be used when £1,000 or more is owed and other recovery attempts have failed. These combined measures form a major part of the government's strategy to prevent fraud and error within the benefits system, aiming to save public funds while ensuring support reaches those who are legally entitled to it.
