Expanded Powers and Controversial Measures in Benefit Fraud Crackdown

The Department for Work and Pensions (DWP) is preparing to implement its planned measures, often referred to as the "bank spying" bill, later this year. This initiative is part of the Labour government's Fraud, Error and Debt Bill, currently under consideration in Parliament. The bill aims to strengthen the DWP's ability to combat benefit fraud by granting it new powers to access information from claimants' bank accounts.

Details on how these new powers will function have been provided by Baroness Maeve Sherlock, a minister of state for the DWP. The primary mechanism enabling the DWP to request financial information from banks is called the Eligibility Verification Measure. This measure will require banks and financial institutions to comply with requests for information when they receive an Eligibility Verification Notice.

The information that can be requested includes the account holder's personal details, such as their name and date of birth. The DWP can also request the bank account's sort code and account number, along with details regarding the account's eligibility for benefits. The government states that these powers are necessary to determine if an individual is eligible for the benefits they are claiming, based on their financial situation.

The implementation of these measures will be phased over a 12-month period, starting with a limited number of banks. Additionally, the DWP will gain the ability to directly deduct money from an individual's earnings or bank accounts through a "Direct Deduction Order." The DWP estimates it will issue between 5,000 and 20,000 Direct Deduction Orders annually.

These new powers are part of a broader set of measures that the Labour government claims will constitute the "biggest fraud crackdown in a generation," with the potential to save £1.5 billion over the next five years. However, these measures have drawn criticism from campaigners, who view them as "intrusive.