Latest news with #ErrorandRecoveryBill
Daily Mirror
30-07-2025
- Business
- Daily Mirror
DWP update on new bank monitoring powers to tackle benefit fraud
The DWP will soon be able to force banks to hand over private financial details in what ministers have called the "biggest fraud crackdown in a generation" Millions of benefit claimants could have their bank accounts scrutinised by the Government under contentious new "snooping" powers being introduced by Labour. The Department for Work and Pensions (DWP) will soon have the authority to demand banks disclose private financial details as part of what ministers are dubbing the "biggest fraud crackdown in a generation". The plans are in the spotlight as a minister gave an update on the looming powers. The extensive measures are included in the Fraud, Error and Debt Bill, which is currently progressing through Parliament. Ministers maintain that these changes will assist in identifying those falsely claiming benefits, such as people with savings exceeding £16,000 who are not eligible for Universal Credit. However, critics argue that the Government is establishing a "system of mass financial surveillance" that could inadvertently ensnare innocent people. Baroness Maeve Sherlock, a DWP minister in the House of Lords, disclosed new aspects of the policy this week – including the crucial provision known as the Eligibility Verification Measure, which will compel banks to comply with official data requests. This will enable DWP agents to request personal details from financial institutions, including a claimant's name, date of birth, sort code, account number – and importantly, whether the account appears to violate benefit eligibility rules. Baroness Sherlock said: 'The information that can be requested under an Eligibility Verification Notice will include basic information about the account holder, such as name and date of birth, and the sort code and account number. Agents may also request information about whether the account meets eligibility requirements.' The powers are set to be rolled out in stages over the next 12 months, starting with a small group of banks. Officials say the crackdown is designed to recover an estimated £1.5 billion over five years by tackling fraud and correcting errors early – before they spiral into large amounts of unmanageable debt. A DWP spokesperson said: 'Our Fraud, Error and Recovery Bill includes an Eligibility Verification Measure which will require banks to share limited data on claimants who may wrongly be receiving benefits – such as those on Universal Credit with savings over £16,000. 'As well as tackling fraud, the new powers will also help us find genuine claim errors sooner, stopping people building up unmanageable debt. This measure does not give DWP access to any benefit claimants' bank accounts.' However, the proposals have already triggered fierce opposition from privacy advocates, who argue the fresh powers extend well beyond what is required. Civil liberties organisation Big Brother Watch told The Independent: "It threatens to usher in an unprecedented system of mass financial surveillance." Baroness Sherlock also confirmed that the DWP will also gain powers to directly seize money from individuals using Direct Deduction Orders – similar to those used by HMRC and the Child Maintenance Service. She stated that the department anticipates making between 5,000 and 20,000 deduction orders annually. The DWP argues that these measures are an essential tool for swiftly recovering money where overpayments have occurred. However, critics worry they could result in hardship for families already grappling with the cost-of-living crisis. Work and Pensions Secretary Liz Kendall has maintained that the powers are necessary to "restore trust in the welfare system" – but opposition voices are expected to intensify as the bill approaches the statute books.
North Wales Live
30-07-2025
- Business
- North Wales Live
DWP update on powers that will allow 'monitoring' of Brits' bank accounts
Labour's new Fraud, Error and Debt Bill is a key component of DWP plans to clamp down on benefit fraud, granting the department new powers to access information from claimants' bank accounts for various reasons. The Fraud, Error and Recovery Bill is set to come into effect from 2026, with the measures expected to save a total of £1.5 billion of taxpayers' money over the subsequent five years. The bill aims to crack down on benefit fraudsters. These new powers are part of a series of measures Labour claims will constitute the "biggest fraud crackdown in a generation." Further details have been provided on the DWP's plans to closely monitor people's bank accounts. Under the changes, benefit fraudsters could face driving disqualifications for up to two years if they refuse all opportunities to repay the money they owe, reports the Liverpool Echo. Currently being debated in the House of Lords, more details on how these powers will work have been revealed by Baroness Maeve Sherlock, a minster of state for the DWP. The key power that will enable the DWP to request banks to share financial information with its agents is called the Eligibility Verification Measure. The DWP will be able to gather information from more third-party organisations such as airlines to check if people are claiming benefits from abroad and potentially violating eligibility rules. The financial department will not have direct access to the bank accounts of millions of people on means-tested benefits including Universal Credit, Pension Credit and Employment and Support Allowance. The Department for Work and Pensions will identify people who may have exceeded the eligibility criteria for means-tested benefits, such as the £16,000 income threshold for Universal Credit. If a person is identified, the department will then investigate that claimant to prevent possible overpayments and potential cases of fraud. The legislation only allows banks and other financial institutions to share limited data and excludes the sharing of transaction data. This means DWP will not be able to see what people are spending money on. A DWP factsheet states: "Any information shared through the Eligibility Verification Measure will not be shared on the presumption or suspicion that anyone is guilty of any offence. Banks and other financial institutions could receive a penalty for oversharing information, such as transaction information." Baroness Sherlock outlines that the information the institution can be asked to share includes information about the account holder, including their name and date of birth. Agents can also ask for the bank account's sort code and account number, as well as details about how the account meets eligibility. Ministers say the government is introducing these powers to be able to determine if an individual is eligible for a benefit they are claiming or have applied for based on their financial position. Baroness Sherlock has said the measures will be implemented over 12 months, in a "phased approach" and work with a small number of banks initially. Based on its usage by HMRC and the Child Maintenance Service, Baroness Sherlock says DWP estimates it will make between 5,000 and 20,000 Direct Deduction Orders every year. A DWP spokesperson told The Independent: "Our Fraud, Error and Recovery Bill includes an Eligibility Verification Measure which will require banks to share limited data on claimants who may wrongly be receiving benefits – such as those on Universal Credit with savings over £16,000. "As well as tackling fraud, the new powers will also help us find genuine claim errors sooner, stopping people building up unmanageable debt. This measure does not give DWP access to any benefit claimants' bank accounts."
Daily Mirror
29-07-2025
- Business
- Daily Mirror
DWP latest on powers that will allow bank accounts to be 'monitored'
The DWP is set to be given new powers as part of its Fraud, Error and Recovery Bill which forms a central part of its plans to crackdown on benefit fraud Labour's new Fraud, Error and Debt Bill represents a key element of DWP strategies to tackle benefit fraud and will grant fresh powers to the department to seek information from claimants' bank accounts. The Fraud, Error and Recovery Bill has been confirmed to take effect from 2026, with the provisions being rolled out to safeguard a total of £1.5billion of taxpayers' money over the subsequent five years. The legislation is designed to target benefit fraudsters. The fresh powers have been brought in as part of a series of measures Labour claims will constitute the "biggest fraud crackdown in a generation." Further details have now been provided on the proposals for the DWP to monitor people's bank accounts closely, READ MORE: BT warning for anyone who still has UK landline in their home Under the changes, benefit cheats could face driving bans for periods of up to two years if they reject all chances to repay the money they owe. Currently under discussion in the House of Lords, additional details on how these powers will operate have been disclosed by Baroness Maeve Sherlock, a minister of state for the DWP. The primary power that will allow the DWP to request banks to share financial information with its agents is termed the Eligibility Verification Measure, reports the Liverpool Echo. The DWP will be able to collect information from additional third-party organisations such as airlines to verify if people are claiming benefits from abroad and potentially breaching eligibility rules. The financial department will not have direct access to the bank accounts of millions of people on means-tested benefits including Universal Credit, Pension Credit and Employment and Support Allowance. The Department for Work and Pensions will identify individuals who may have exceeded the eligibility criteria for means-tested benefits, such as the £16,000 income threshold for Universal Credit. If a person is identified, the department will then investigate that claimant to prevent possible overpayments and potential cases of fraud. The legislation only permits banks and other financial institutions to share limited data and excludes the sharing of transaction data. This means DWP will not be able to see what people are spending money on. A DWP factsheet states: "Any information shared through the Eligibility Verification Measure will not be shared on the presumption or suspicion that anyone is guilty of any offence. Banks and other financial institutions could receive a penalty for oversharing information, such as transaction information." Baroness Sherlock explains that the information the institution can be asked to share includes details about the account holder, including their name and date of birth. Agents can also request the bank account's sort code and account number, as well as details about how the account meets eligibility. Ministers claim the government is bringing in these powers to establish whether someone qualifies for a benefit they are receiving or have requested based on their financial circumstances. Baroness Sherlock said the measures will be rolled out over 12 months, using a "phased approach" and working with a limited number of banks at first. Drawing on its use by HMRC and the Child Maintenance Service, Baroness Sherlock says DWP anticipates it will issue between 5,000 and 20,000 Direct Deduction Orders annually. A DWP spokesperson told The Independent: "Our Fraud, Error and Recovery Bill includes an Eligibility Verification Measure which will require banks to share limited data on claimants who may wrongly be receiving benefits – such as those on Universal Credit with savings over £16,000. "As well as tackling fraud, the new powers will also help us find genuine claim errors sooner, stopping people building up unmanageable debt. This measure does not give DWP access to any benefit claimants' bank accounts."
Yahoo
30-04-2025
- Politics
- Yahoo
10,000 ‘innocent' benefits claimants could have bank accounts wrongly checked by DWP, MP warns
Thousands of people could be wrongly implicated for benefit fraud offences under government reforms that will see the Department for Work and Pensions (DWP) recover money directly from claimants' bank accounts, an MP has warned. Former Tory minister David Davis is among a number of MPs to raise concerns about the scope and accuracy of the technology used to enforce the government's Fraud, Error and Recovery Bill, which will give the government the power to investigate benefit claimants' bank accounts by legally compelling banks to share account data, and take overdue payments. The government and banks will use an algorithm to detect potential fraudsters, as well as to recover money directly from the bank accounts of people accused of committing benefit fraud. In serious cases, the government will suspend people's driving licences. But with an algorithm error margin of just 1%, at least 10,000 innocent people will be "dragged through the system", Davis warned. "If the banks use algorithms, they will have an error rate of at least 1%. That means 10,000 or more innocent people will be dragged through the system by this proposal," Davis said. The bank account spying powers in today's Public Authorities (Fraud, Error and Recovery) Bill amount to a suspicionless surveillance tool impacting over 9 million innocent people's bank Government must think again.I made this point today in the @HouseofCommons 👇🏻 — David Davis MP (@DavidDavisMP) April 29, 2025 He added: "Big Brother Watch, Age UK and a multitude of other charities have highlighted concerns about the bill, such as the breakdown in trust that it could cause and the risk of amplifying the challenges faced by people with disabilities." Big Brother Watch told Yahoo News that "recruiting banks to investigate benefits recipients on behalf of the state for administrative error is an intrusive overreach." Jasleen Chaggar, legal and policy officer at Big Brother Watch, said: "This law undermines the presumption of innocence and treats people as suspects by default." "The use of algorithmic software to snoop on everyone's bank accounts will inevitably lead to devastating errors which will disproportionately impact elderly people, disabled people, carers, single parents and the poorest in our society." "Despite 25 civil society groups and 237,775 members of the public calling on parliament to drop the mass bank spying powers, the government is still pushing ahead. It will now be up to the House of Lords to challenge the harmful and rights-eroding provisions in this bill." Labour MP Neil Duncan-Jordan warned that a misuse of the technology could lead to another "Horizon-type scandal", referring to the error-ridden technology that saw hundreds of Post Office staff wrongly accused and convicted of fraud and false accounting. Responding to Davis's remarks, Duncan-Jordan said: "The right honourable member brings me to my next point, which is the risk of a Horizon-style scandal on a massive scale, given the sheer volume of accounts that will be scanned. "That is glaringly obvious." The Labour MP for Poole proposed limiting the powers of the bill to when a welfare recipient is suspected of wrongdoing and not of error, adding that the benefits system "lends itself to errors" as it is "extremely difficult to navigate". "Analysis of the bill has shown that where assessment deems that a financial deduction would cause hardship, the debtor can face losing their licence. That is not justice in my view, but a penalty for being poor," Duncan-Jones 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. "These are the values that make us different from the last government, and we should not forget that." Fellow Labour MP and former shadow chancellor John McDonnell added: "Time and again, when we have introduced legislation like this in the past that has short-circuited the traditional protective constitutional and legal mechanisms, it has led to debacles and miscarriages. "I warn ministers that that is exactly what we are facing here. Reference has been made to issues with regard to the use of computers, models and algorithms. We seem to have learned nothing from where we have made those errors." Work and pensions spokesperson for the Liberal Democrats, Steve Darling, branded the legislation "Orwellian", and said that the government needs to publish a best-practice document to give claimants' peace of mind. The government said the bill, which has now progressed to the House of Lords, could recover £1.5bn over the next five years by "targeting the bank accounts of fraudsters who can repay but are wilfully gaming the system". It will also appoint an annual reviewer to look at the bill. However, Darling said that as the government is allowed to appoint its own reviewer, it defeats the object of the inspection. "We do not welcome the secretary of state effectively marking their own homework by making the appointment themselves," he added. The government has been approached for comment.
Telegraph
31-01-2025
- Business
- Telegraph
Benefits blow as £1 in every £15 is fraud or error
About £1 in every £15 spent on benefits last year was fraudulently claimed or paid by mistake, a report has shown. Nearly £10 billion of taxpayer money was paid out for bogus or erroneous claims in 2023-24, accounting for 6.7 per cent of The vast majority of the excess cost The figures, which exclude state pensions, appear in a report by the public accounts committee, which accused the DWP of having The department has sought to blame the problem in part on greater fraud in wider society, but the MPs said the level was 'unacceptably high' and insisted it was the DWP's job to 'improve defences'. The rising levels of waste pose a challenge for Sir Keir Starmer, who has staked political capital on tackling Britain's bloated benefits bill. In an attempt to ease the burden on the taxpayer, the Government has announced new laws to tackle benefit fraud and recover money from cheats who refuse to pay up. The Chancellor has also pledged to stick to Tory plans to cut £3 billion from incapacity benefits by 2028. According to the committee's report, the DWP estimates that it overpaid a total of £9.5 billion, or 6.7 per cent of benefit spending, in the year to March is an increase of about 16 per cent on the previous year. The department set out a plan to tackle fraud and error in May 2022, including a series of 'targeted case reviews' to verify around eight million existing Universal Credit claims. But it fell short of its expected savings of £115 million in 2023-24, instead clawing back £90 million. The DWP insisted this was just 'a blip', according to the committee, blaming staffing pressures. It said it would be using an extra £110 million in funding from the new Government to carry out more targeted reviews and checking that claimants' details were up to date. Sir Geoffrey Clifton-Brown, the Tory chairman of the committee, said it had 'little sympathy for the DWP's argument that this rise is driven by A DWP spokesman said: 'The report does not consider that we are already taking action on fraud and error through our new Fraud, Error and Recovery Bill which will help us protect claimants by stopping errors earlier alongside saving an estimated £1.5 billion of taxpayer money over the next five years.'
