The Department for Work and Pensions (DWP) has published the final Code of Practice for the new Eligibility Verification Measure, which will require banks and other financial institutions to examine accounts receiving Universal Credit, Pension Credit and Employment and Support Allowance (ESA).
Under the new regulations, banks will be provided with specified eligibility indicators and required to identify accounts that correspond with them before supplying certain information to the DWP. The measure is part of the Public Authorities (Fraud, Error and Recovery) Act 2025, which received Royal Assent in December.
How the new DWP bank checks will operate
The DWP will issue an Eligibility Verification Notice (EVN) to a bank or other financial institution, outlining the eligibility indicators it wants accounts assessed against. The DWP cannot use an EVN to supply a bank with the personal details of individual benefit claimants or request information about them.
Instead, financial institutions will use the information they already possess to identify accounts that satisfy the criteria outlined in the notice. When an account is identified, particular information may then be forwarded to the DWP to assist officials in establishing whether a benefit might have been paid incorrectly.
The DWP states the mechanism is intended to detect potential incorrect payments rather than determine whether somebody is entitled to benefits. An account being highlighted will not automatically indicate someone's benefit award is wrong or that payments will be stopped.
What information banks are permitted to send
There are limits on the information financial institutions may provide under the new powers. Banks are unable to send the DWP transaction details showing what someone has purchased or where they have spent their money. The legislation also generally prevents special category data from being shared, with limited exceptions such as information required to establish someone receives a specified benefit.
The DWP is additionally prohibited from sharing claimants' personal data with banks when issuing an EVN. The Code of Practice stipulates information supplied by financial institutions must be transferred securely, with EVNs themselves anticipated primarily to be issued electronically.
What occurs if an account is flagged
A match will not, on its own, be enough for the DWP to decide someone has been overpaid benefits. Further checks will be required because there may be legitimate reasons why information held by a bank appears inconsistent with benefit eligibility.
For instance, the Code acknowledges someone could appear to hold savings above the normal capital limit while some of that money is legally disregarded when their benefit entitlement is calculated. DWP staff would consequently need to consider the claimant's circumstances before making a decision about their award.
Child Poverty Action Group (CPAG) said once a claimant has been identified through the measure, the DWP will utilise its existing processes to decide whether further action is required. This could ultimately include changing a benefit decision or suspending payments. The DWP has indicated the broader provisions are designed to tackle fraud and error in the benefits system while incorporating protections governing how information may be obtained and used.
