Plans for DWP to check benefits claimants’ bank accounts questioned

Plans that would allow the government to check the bank accounts of people claiming universal credit if they have more than £6,000 have raised concerns.
 
Under the proposals, the Department for Work and Pensions (DWP) will have the power to ask for information about claimants from banks and financial institutions to make sure they’re entitled to support. 
 
People with between £6,000 and £16,000 in savings would then have their benefits reduced. 

So if you have more than £6,000 in cash, savings and investments, your benefit payment could be cut by £4.35 for every £250 you have between £6,000 and £16,000. 
 
Another £4.35 will be taken off for any remaining amount that isn’t a complete £250. 

However, the plans have been questioned by campaigners and MPs.

Algorithms ‘can lead to errors’

The DWP and banks will use an algorithm to identify potential fraud and recover money from people accused of committing fraud.

But campaign group Big Brother Watch believes this will “inevitably” lead to errors being made.

Speaking to Yahoo News, legal and policy officer Jasleen Chaggar said it would also “disproportionately” affect groups such as the elderly, disabled, single parents, carers and people on low incomes.

Conservative MP David Davis has also raised concerns with the accuracy of the technology.

"If the banks use algorithms, they will have an error rate of at least 1%,” he commented.

“That means 10,000 or more innocent people will be dragged through the system.”

Government urged to scale back plans

Labour MP Neil Duncan-Jordan has called on the government to limit the proposed powers, so that only those suspected of fraud are subject to surveillance.

“The complexity of our system lends itself to errors on the part of individuals who find it extremely difficult to navigate,” he said.

“Our welfare state needs to provide support for those who need it, and the change that we promised as a government must lead to a more compassionate and caring society - one that enables rather than penalises.”

Ministers aiming to cut benefits bill 

This is part of a wider effort by the government to reduce the welfare budget by £5bn by 2030. 

Earlier this year, ministers announced reforms including: 

• increasing the standard allowance of universal credit
• tightening eligibility criteria for personal independence payments (PIP)
• scrapping the work capability assessment in 2028
• not penalising people on benefits for trying out a new job
• reducing incapacity benefits for people under 22
• more frequent reassessments for PIP claimants
• merging JSA and ESA
• investing an extra £1bn in employment support