An expert has issued a warning about plans for DWP bank account checks (Image: Getty)
New DWP powers that will enable officials to take money directly from the accounts of benefit claimants suspected of fraud could leave people struggling to make ends meet. Legislation is coming in to tackle benefit fraud, empowering investigators to request bank statements and to directly recover funds from a person’s bank account where money is owed.
Critics of the measures fear people and could force people into dire financial situations where they struggle to get by. Sebrina McCullough, director of external relations at debt and benefit counselling service , said: “It is vital that before any agreements to recover money directly from bank accounts are made, affordability checks are completed.
“The details of a person’s account and what is on bank statements might not always be a true reflection of their financial situation.”
Under the measures, officials will have to request at least three months of bank statements to check the person has the funds befor they are deducted from their account, although they can request statements over a longer period.
Ms McCullough said: “We’d encourage the Government to first refer these people to free debt advice services, which can work with people to establish their full financial situation and then support them with a sustainable and workable repayment plan. Otherwise, we risk forcing vulnerable low-income households into crisis.”
The expert also said it’s important that the wider context around benefit fraud is considered, with overpayments due to fraud accounting for just 2.8% of welfare spending, with a total of £7.4billion.
This compares with £1.6billion in overpayments due to mistakes from claimants and a further £0.8billion going out due to other errors. Meanwhile, some £20billion in benefits reportedly goes unclaimed because people are not claiming what they could.
Ms McCullough urged: “It’s paramount that the Government distinguish ‘intentional fraud’, where, for example, large-scale fraud committed by criminal gangs are exploiting vulnerable individuals, from genuine errors made by people trying to navigate an outdated, overly complex system.
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“Any legislation must consider how to prevent fraud, as well as how to use the data available to proactively engage people who should be claiming but clearly do not know they are entitled to additional benefits. The system must be simplified and streamlined.”
Another expert worried about the powers being misused is Ben Fleming, financial crime analyst at . He warned: “Mistakes in benefit assessments are not uncommon, and there’s a risk that innocent people might be unfairly scrutinised or penalised.
“If these checks are applied inconsistently or without clear oversight, it could lead to a disproportionate impact on vulnerable groups who are already struggling.”
He warned that disability benefit claimants could be a particular target under the new measures. Mr Fleming explained: “Disability benefits like Personal Independence Payment (PIP) and Employment and Support Allowance (ESA) could also see heightened checks, as these often rely on subjective assessments that can be manipulated.
“Housing Benefit and Council Tax Reduction schemes might also be targeted due to the financial strain they place on local authorities. These benefits often involve third-party data like rental agreements, making them susceptible to misreporting.”