Money Wellness
Illustration of people analysing banking data on a giant computer screen with a giant magnifying glass
category iconbenefits
calendar icon20 May 2024

Recent trial shows how monitoring benefit claimants’ bank accounts might work

As the government ramps up the rhetoric about tackling benefit fraud, a recent trial by the Department for Work and Pensions (DWP) give insight into how the planned bank monitoring of benefits claimants might work.

In the trial, DWP asked two banks to monitor the accounts of people getting universal credit, employment and support allowance or pension credit.

One of the banks identified 713,000 accounts held by people claiming those benefits.

Breaches of maximum savings limits

During a three-month period, the balance of 60,000 of those accounts went above the amount you’re allowed to have if you receive help from the welfare state. The maximum savings allowed if you’re claiming universal credit or ESA is £16,000. For those getting pension credit, it’s £10,000.

Abroad fraud

A further 3,000 accounts were linked to potential ‘abroad fraud’. This occurs when the account holder is either living abroad while getting UK benefits or goes on an overseas holiday for longer than four consecutive weeks.

What could change?

Currently, DWP can only access bank accounts if fraud is suspected or when verifying a benefit claim at the application stage. But as part of the data protection and digital information bill, it is seeking new powers to permit the regular monitoring of accounts to check people continue to qualify for benefits.

The bill is currently under review in the House of Lords. If passed, it will come into force next year, with data sharing between DWP and banks beginning in 2027.

MPs issue warning

A group of 30 MPs has tabled a parliamentary motion warning that the new surveillance powers could spark a scandal similar to the one involving the Post Office that saw hundreds of subpostmasters wrongly jailed for fraud.

Avatar of Rebecca Routledge

Rebecca Routledge

A qualified journalist for over 15 years with a background in financial services. Rebecca is Money Wellness’s consumer champion, helping you improve your financial wellbeing by providing information on everything from income maximisation to budgeting and saving tips.

Related posts

benefits

17 Jun 2024

Reform UK pledge two-strike rule for jobseekers

Reform UK have dropped their manifesto. Find out how their plans could affect your money situation.

benefits

17 Jun 2024

Almost 1 million people claimed mental health benefits within 4 years

Mental-health problems are the main driver for health-related universal-credit claims, new data has revealed.

benefits

17 Jun 2024

Over half a million more kids to be affected by two child cap in next 5 years

An extra 670,000 children to grow up in poverty over the course of the next parliament unless the two child cap it scrapped. What does it mean for you?

benefits

14 Jun 2024

Farage appears to back an end to the two-child benefit cap

Could reform do away with the two-child cap?