DWP says bank account checks could be coming for people on pension credit (Image: Getty)
The says bank account checks could be coming for people on pension credit under legislation going through Parliament that provides and other public authorities. The new laws will grant investigators new powers of “entry, search, and seizure” to tackle cases of criminal gangs exploiting the benefits system.
In an update, Andrew Western MP told the Commons: “More than 50% of the fraud and error that we see in pension credit comes from two principle sources, which the eligibility verification measure specifically seeks to address. “One is the issue of capital fraud, where there is a relatively easy indicator—for example, in respect of universal credit, was the individual in receipt of capital in their account of more than £16,000?”
He continued: “The provision also has the benefit of helping us to establish when somebody has been out of the country for longer than their benefit entitles them to be. For instance, it would provide a flag on an account when somebody’s bank account suggested they had been making purchases abroad and so on.
“We would not receive the transactional data or know specifically where the purchases were made—or, indeed, whether it was cheesecake or some other item—but it would give us specifically the date that somebody left the country and thereby show whether they were in breach of the length of time they are allowed to be away.
“This is not, then, just a tool to deal with capital fraud, although that is the most straightforward example to articulate and, therefore, the one I use most readily; it will also be useful to identify people who have been abroad for longer than their eligibility suggests they should be allowed to be while continuing to receive benefits.
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“It is important to recognise—I touched on this when I set out the human safeguard that is in place—that a flag would not necessarily mean that someone has done anything wrong, or that they are no longer entitled to benefits. On capital fraud, it might be because someone has received, perfectly legitimately, a Government compensation payment, such as for infected blood, which would be out of scope. That is why a human would check that. The person would therefore not lose benefits or receive an overpayment.”
In 2023-24, £520 million in pension credit was overpaid and pension credit has one of the highest rates of capital fraud and error, according to Mr Western.
“The rate of fraud in pension credit increased by more than 50% in 2023-24, as against the previous year, so we have a clear problem. The under-declaration of financial assets and claimants staying abroad for a longer period than is allowed remain the two main causes of pension credit overpayments in ’23-24. As I said previously, they accounted for more than 50% of all overpayments”, he said.
In announcing the legislation, Labour said that the search and seizure powers would be used in cases where “criminal gangs” are defrauding the benefits system.