To prevent welfare fraud, the government could be given the right to check citizens’ bank accounts.
The proposed legislation has raised concerns among senior MPs that it is “a step too far”. The measures would cover all social security contributions, including state pensions.
The plans, part of the Data Protection and Information Digitisation Act, will require banks to share customer data with the Department for Work and Pensions (DWP) if an applicant does not meet the eligibility requirements for their benefits.
The DWP currently estimates that £8 billion is lost each year through fraud and overpayments. In the case of Universal Credit in particular, it is suspected that there have been significant overpayments.
The aim of the new laws is therefore to prevent fraud and overpayments across the board. This means that people who receive benefits in several areas could be affected.
Sir Stephen Timms, chairman of the Work and Pensions Committee, pushed for clearer reasons why certain social security contributions should be covered by the rules.
He told the Telegraph: Ministers should only take new powers when it is absolutely necessary to intervene in people’s private lives. What is being proposed goes too far. With means-tested benefits such as Universal Credit, it is clear why ministers would want such powers. But the Government has not made a convincing case for why it should take these powers for the State Pension, Personal Independence Payment or Child Benefit. In fact, there appear to be no concrete plans to use these powers at all.
“The government has the opportunity to remedy the situation during the legislative session in the House of Lords by removing the unnecessary parts of these plans.”
A DWP spokesman said in an official statement: “This is not a surveillance power and does not allow the DWP to access bank accounts or see how claimants or pensioners spend their money.”
“While the rate of fraud-related overpayments in state pensions is currently 0.0 percent, it is important to ensure we have the tools we need to tackle fraud and errors in the future.”
Can the DWP currently check bank accounts?
Currently, the DWP can only check a person’s bank account if there is already suspicion that they may be committing fraud.
Applicants are responsible for reporting any changes to their financial circumstances that could lead to their exclusion from entitlement to benefits.