The UK government intends to keep an eye on benefit claimants’ bank accounts, arguing that doing so will make it easier to spot fraud in the welfare system.
Ministers informed  , The Telegraph, in advance of the King’s Speech in early November 2023 that new anti-fraud plans to increase government access to bank account data would be implemented in future legislation to address the rising number of people receiving out-of-work benefits, which has increased to 5.4 million people since the pandemic began.
The government will “take further action against fraud and error by legislating to increase the DWP’s access to data on benefit claimants that is held by third parties ( e .g. banks,” according to the Autumn Statement.
The next highest type of welfare fraud, hidden capital, is where false claims are found.” This will enable DWP to better identify fraud in the welfare system.” By 2028–2029, it is anticipated that these additional powers will result in annual savings of about £300m.
The government’s upcoming Data Protection and Digital Information Bill will include these new powers to monitor bank accounts in an updated version, it has since been confirmed.
People are not permitted to claim under the current Universal Credit (UC) system if they have more than £16,000 in savings, but the Department for Work and Pensions ( DWP ) believes that some people still do so.
The new system would require banks to conduct strategic checks for signs of fraud on people’s accounts, either on a monthly or weekly basis, as opposed to the current system, where DWP must request the information of suspected fraudsters ‘ bank accounts.
” We wo n’t stand for it. These new powers send a very clear message to benefit fraudsters.” According to secretary of state for work and pensions Mel Stride, these people are taking the taxpayer for a ride, and it is appropriate that we do everything in our power to prosecute them.
” These powers will be used proportionately, ensuring that claimants ‘ data is securely protected while eradicating fraudsters as soon as possible.”
The DWP has long advocated for fresh legislation that would give it access to the bank account information of benefit claimants. For instance, the department laid out its long-term strategy to combat benefit fraud against the welfare state under its £900m “fraud plan,” which was launched in May 2022. It also called for fresh “powers to boost access to third-party data” and modernize its information-gathering capabilities.
It stated that “better access to data held by third parties, particularly banks, would be greatly beneficial in identifying fraud and error in the welfare system, particularly in discovering hidden capital in claims.” This kind of fraud was estimated to cost £0.9 billion in Universal Credit only between 2020 and 2021. Additionally, it would assist us in determining whether someone is falsely claiming benefits from overseas.
It was also stated that banks will be required to transfer account data to the DWP on a large scale under any fresh anti-fraud legislation. In order to move swiftly against fraudsters, it even called for fresh powers for DWP officers to make arrests as well as to carry out searches and seizures.
It’s in claimants ‘ best interests to ensure that benefit payments are paid accurately, and steps to reduce fraud and error are welcome, but , we do not believe that invasive steps like those proposed are appropriate – it should n’t be that people have fewer rights, including to privacy, than everyone else in the UK simply because they are on benefits, said Child Poverty Action Group ( CPAG ) CEO Alison Garnham in response to the plans.
Targeting benefit claimants to look into their bank accounts is a worrying wet slope in terms of stigmatizing and cooperatively punishing them, as well as an obvious overreach of the government’s powers.
Let’s ask MPs to go first if they think this is a good idea.House of Lords member Jenny Jones
The plans to” spy on the bank accounts of those receiving benefits,” according to Jenny Jones, “are a new low in this government’s constant vile behavior,” she said in the House of Lords on November8.
” No government has ever invaded the privacy of anyone’s bank account without a pretty good reason in our history.” All those receiving benefits are now viewed as prospective criminals. Let’s ask MPs to go first if they think this is a good idea, she said. Would MPs be ok if banks had the ability to raise red flags on their accounts given all the instances of corruption, second jobs, and unreported incomes? To test the system before using it on different people seems to make sense.
Financial Times, HM Revenue &, Customs andnbsp reported in freedom of information requests that UK residents had £850 billion in foreign financial accounts in 2019 ( the most recent year for which HMRC has released statistics ) and £570 billion of which was based in the aforementioned tax have ns.
90 % of those who are eligible for UC often go without necessities, and about half of them ran out of money to buy food and were unable to do so in the summer of 2023.
According to the DWP’s most recent data, only 3.6 % of all benefits ($ 8.6 billion ) for the fiscal year ending 2023 were overpaid due to fraud or error.
