The Department for Work and Pensions has detailed a strategic shift in its anti-fraud operations, moving focus from Universal Credit to Pension Credit following recent legislative changes. Senior officials outlined this new direction during a parliamentary committee session, emphasising enhanced data access and verification measures.
New Legislative Powers Enable Deeper Scrutiny
DWP permanent secretary Peter Schofield addressed the Work and Pensions Committee about ongoing efforts to reduce wrongful and fraudulent benefit payments. This comes after new laws granted the department expanded authority, including the controversial Eligibility Verification Measure.
These powers enable investigators to examine bank account information for claimants receiving Universal Credit, Pension Credit, and Employment and Support Allowance. More significantly, the legislation allows the DWP to directly withdraw funds from accounts when claimants owe money and refuse repayment.
Capital Fraud Becomes Primary Target
Schofield identified capital fraud as the most significant area of concern within Pension Credit claims. This involves claimants misrepresenting their savings and investments to receive payments they wouldn't otherwise qualify for.
"The biggest areas of fraud and error in Pension Credit relate to capital, and also abroad fraud," Schofield told committee members. "People who are claiming who are abroad for longer than they are allowed to be under the eligibility for the benefit."
Capital refers to financial assets that appreciate over time, including savings accounts, investments, and other holdings. For Pension Credit recipients, having £10,000 or more in savings triggers reduced entitlement, with each £500 above this threshold counting as £1 weekly income deducted from benefits.
Universal Credit Precedent Informs New Approach
The department's successful fraud reduction efforts with Universal Credit are now being applied to Pension Credit. Schofield explained that Universal Credit served as their initial focus because it represented "the biggest area of loss" before showing "big improvements."
For Universal Credit claimants, savings between £6,000 and £16,000 reduce monthly payments by £4.35 for each £250 held above the £6,000 threshold. The department has developed sophisticated methods to verify these holdings through data sharing arrangements.
Enhanced Data Access Transforms Investigations
Schofield revealed multiple channels through which the DWP accesses financial information. Claimants using open banking systems can voluntarily share their data, while new legislation enables "access to data support from the banks" to investigate capital fraud more effectively.
"We're also able to work in terms of other types of fraud around earnings, using the same channel that we use on Carer's Allowance, to get access from HMRC data," Schofield added. "The eligibility verification measure in the act will also allow us to pick up on transactions that are made abroad."
Targeted Case Review Programme Expands
A significant component of the renewed focus involves targeted case reviews, where officials examine individual claims to identify unreported changes in circumstances. This approach helps correct improper payments while preventing claimants from accumulating debt.
Schofield confirmed his team is working "at full pelt" on these reviews, with approximately £300 million invested this year alone. This funding supports around 4,000 agents dedicated to investigating potential fraud cases across both Pension Credit and Universal Credit systems.
Claimant Responsibility Remains Crucial
Despite technological advancements and legislative powers, Schofield emphasised that claimant cooperation remains essential. "Obviously a key thing is encouraging people to let us know when there is a situation that means that they shouldn't be entitled to [the benefit]," he stated.
The department continues reminding beneficiaries of their obligation to report changes affecting eligibility, particularly regarding capital holdings and international travel duration. This combination of technological capability and personal responsibility forms the cornerstone of the DWP's evolving anti-fraud strategy.
