DWP bank account checks find 63,000 benefit claimants breaking rules

Tens of thousands of benefit claimants have been found breaking the rules in a test of new DWP plans to monitor people’s bank accounts. The Department for Work and Pensions says it has asked two high street banks to trial the measures to see if they are viable.

An unnamed bank has identified 713,000 accounts held by people receiving Universal Credit, Pension Credit or ESA (Employment and Support Allowance). Over a three-month period, it found that 60,000 accounts had too much money in them for individuals to be entitled to benefits.

In a further 3,000 accounts, there was evidence of “overseas fraud”, where the account holder was either living abroad while claiming UK benefits or going on holiday for more than is allowed under DWP travel rules. The accounts were checked for signs that they had been accessed from another country for more than four weeks in a row.

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Astonishingly, the average monthly balance of the 60,000 accounts suspected of breaching capital limits rules was £50,000. The maximum savings allowed to claim Universal Credit and ESA is £16,000, while for Pension Credit – a top-up for pensioners on low incomes – it is £10,000.

Currently, the DWP can only check accounts if they already suspect fraud or as part of the initial check of a benefit claim. The new powers would allow accounts to be regularly monitored to ensure people qualify for state support.

There are restrictions on the time benefit claimants can spend abroad. For Universal Credit, no more than a month is allowed at any one time, and for ESA and Pension Credit it is four weeks. Although people can still claim their state pension while living abroad, it is not possible to get a pension credit to increase the amount.

In an impact assessment of its plans to collect data by banks, the DWP says these initial checks took place in July, August and September 2022. Of the 713,000 accounts monitored, 58% belonged to Universal Credit claimants, 22% to people . on ESA and the remaining 20 percent for pension credit recipients.

It said: “Of these, around 60,000 accounts were at risk of breaching the capital rule (8%) and 3,000 accounts were at risk of breaching the overseas rule (less than 1%). For accounts at risk of breaching the capital rule, the average monthly balance was £50,000 and around 50% of these accounts were joint accounts.

“The above results of small-scale tests with two banks and building societies indicate strong potential for using bank data to identify possible capital fraud and errors overseas and across a range of means-tested benefits” .

The report also says previous checks were carried out for the DWP in 2017. On that occasion, another bank looked at a limited sample of cases and reported 549 accounts as having potentially suspicious activity under the Proceeds of Crime Act.

The DWP analyzed the cases and found that 176 (32%) of these had excess savings, meaning people were ineligible for the benefits they were receiving, while another 58 (11%) had overseas transactions that indicated that someone has been abroad for more than four weeks. .

The DWP said that in 58% of these cases where people had surplus capital, there was a “positive outcome” with action taken, including a DWP compliance interview which can stop or suspend benefits, criminal investigation, administrative penalty or prosecution . And in 66% of potential ‘overseas fraud’ cases, the DWP also reported a ‘positive outcome’ where benefits were stopped because the rules were broken.

The new measures are part of the Data Protection and Digital Information Act, currently in the House of Lords. If the legislation is passed, it will come into effect in 2025 with a limited number of banks and building societies.

Once the DWP and the banks have established a successful data sharing agreement, the policy will begin a phased rollout from 2027/2028 and reach full scale by 2030/2031.

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