Andy Burnham's government has scrapped plans to allow the Department for Work and Pensions (DWP) to check the bank accounts of people claiming Universal Credit to look for fraud and hidden savings.
The plan, announced when Rachel Reeves was Chancellor, was intended to help save £200m a year in benefit fraud. It would have allowed the DWP to examine claimants' bank accounts to see how much money they held in savings.
Savings rules and the scrapped proposal
Universal Credit rules state that savings below £6,000 generally do not affect entitlement. Savings between £6,000 and £16,000 may reduce the amount of benefits received. Those with more than £16,000 in savings are not eligible to claim unemployment benefits.
The checks were designed to identify people hiding savings to claim benefits they were not entitled to. Now Chancellor John Healey is said to have scrapped the proposal, according to The Telegraph newspaper.
New scheme with bank reporting
The government is reported to have replaced the counter-fraud measures with a new scheme in which banks conduct checks on welfare claimants' accounts after they have started receiving Universal Credit and report findings back to ministers, according to the Manchester Evening News.
The government website states: "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 a claimant is not eligible for the benefit they are claiming or that the amount they are receiving is incorrect. The website adds that DWP may ask questions about eligibility or request further information to support the claim.
How DWP contacts claimants
DWP will contact claimants through their online journal if they have an online account set up. Those without an online account may be contacted by phone, letter or text message. The website advises responding as soon as possible to avoid benefit payments being delayed or stopped.
DWP may ask for further information or decide whether further enquiries are needed. Any decision about benefit entitlement or payments will always be made by DWP staff. Claimants who disagree with a benefits decision can request that it be looked at again.
