The Department for Work and Pensions (DWP) has confirmed that data gathered through new bank account eligibility checks will not automatically result in benefit suspensions. The DWP says trained staff will be required to examine cases before any action is taken.
Reassurance from Consultation Response
The reassurance forms part of the UK Government's response to a public consultation on new Codes of Practice linked to the Public Authorities (Fraud, Error and Recovery) Act 2025. The legislation will permit the DWP to issue Eligibility Verification Notices (EVNs), requiring banks and financial institutions to verify information connected to certain benefit eligibility rules.
The DWP stated the new powers are intended to help pinpoint incorrect benefit payments resulting from fraud or error, including instances where someone may have exceeded savings thresholds or spent excessive time overseas. However, concerns raised throughout the consultation included fears that benefit payments could be unfairly halted based solely on bank account data.
Trained Staff Review Before Action
In its response, the DWP said that information received through an EVN will not trigger any automatic suspension. It emphasised that all decisions would be handled by trained staff who assess all relevant information before any action is taken, reports the Daily Record. The department further confirmed that claimants would be contacted and given the chance to respond should further clarification regarding their circumstances be required. According to the consultation response, benefit payments would not be suspended until concerns had been reviewed under existing DWP procedures, including hardship considerations.
Eligibility Indicators Kept Secret
The DWP also confirmed it will not disclose the precise eligibility indicators used to identify accounts for checks, arguing that doing so could enable fraudsters to evade detection. The DWP stated the indicators would remain tied to existing benefit eligibility rules, such as capital limits or time spent abroad.
Phased Rollout and Independent Oversight
The response document further confirmed the checks will be phased in gradually through a Test and Learn period ahead of a wider rollout. The DWP confirmed all safeguards in place during full implementation would equally apply throughout the early rollout phase. An independent reviewer will oversee the use of the new powers and report findings to Parliament on an annual basis. The consultation response reveals the UK Government received 61 responses from members of the public, charities, representative organisations and businesses throughout the 12-week consultation period.
What Banks Can Check
Under the proposals, the DWP can issue an EVN requiring a financial institution to search its own records for accounts matching certain criteria. The guidance confirms banks will not receive personal information from the DWP and cannot search for named claimants. Instead, banks would identify accounts already receiving relevant benefits that satisfy specific criteria outlined in the notice. The code provides the example of Universal Credit savings regulations, where accounts holding more than £16,000 could be highlighted because this represents the upper capital threshold for the benefit. It also notes the DWP may request banks to identify people with savings between £6,000 and £16,000 because Universal Credit payments decrease once capital exceeds the lower limit. The guidance further states information could be shared where there are signs someone may have spent more time abroad than benefit regulations permit.
What Banks Are Prohibited from Sharing
The code repeatedly emphasises strict limitations apply to the information banks can provide. The DWP said financial institutions are prohibited by law from sharing transaction histories, spending information, financial statements, and special category data such as political opinions, religion or ethnicity. The guidance also confirms no decisions about benefit entitlement will be made automatically using bank data alone. It stated any information shared would only suggest further enquiry may be necessary and would not mean a person is presumed to have committed fraud or wrongdoing. The document says: No decisions about benefit entitlement will be made automatically on this information alone.
Joint Accounts and Linked Accounts
The code also clarifies how linked and joint accounts may be considered. Linked accounts are described as any additional accounts held by the same person who receives a relevant benefit payment. The DWP stated that joint account details could also be disclosed in certain circumstances because banks wouldn't know which account holder is claiming benefits. The department confirmed that information irrelevant to benefit entitlement would not be shared further and would subsequently be deleted in accordance with data protection regulations. The guidance also features sections addressing appointees and landlords who may receive benefit-related payments into personal accounts on someone else's behalf.
Test and Learn Rollout
The DWP explained the system will initially operate with a limited number of financial institutions as part of a Test and Learn phase before wider implementation. The department indicated this would enable processes, safeguards and digital systems to be examined before broader expansion. The code confirms use of the powers will be independently reviewed every 12 months. Financial institutions will also have rights to request internal reviews and challenge EVNs through the First-tier Tribunal.
Why the DWP Is Introducing the Checks
Last week, the DWP published its latest fraud and error figures which revealed £9.9bn was overpaid across the benefits system during the financial year ending 2026. Universal Credit remained the largest source of overpayments, with fraud connected to earnings, savings and living arrangements amongst the biggest causes identified in the report. The DWP stated that the updated verification procedure is designed to detect erroneous payments sooner and stop claimants accumulating significant debts as a result of overpayments.
