DWP bank checks timetable revealed – when new crackdown will start | Personal Finance | Finance

The Department for Work and Pensions (DWP) has announced when new bank checks on benefit claimants will start.

In the year 2022/2023, a staggering £8.3 billion was lost to fraud and error in the welfare system, mostly due to fraudulent claims. The DWP revealed it had paid out £894 million to Universal Credit recipients who hadn’t declared they’d received too much money to qualify for benefits.

There’s a savings limit of £16,000 for those receiving Universal Credit, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, Housing Benefit and Income Support.

If savings exceed this amount, benefit claims are halted – and shouldn’t be approved initially if someone has that much when applying.

At present, the DWP can only ask to check a person’s account if it already suspects fraud. It also depends on claimants themselves to report any changes in circumstances – including large cash deposits – that mean they’re no longer eligible for benefits.

New proposals in the Data Protection and Digital Information Bill could require banks and building societies to share data with the DWP on all accounts where benefits are paid in, the Mirror reports. This would be used to identify accounts that have excessive savings or show a claimant is staying abroad for more than four weeks.

The top 15 banks in the UK, which handle 97 percent of all DWP benefit payments, will need to set up systems that automatically check claimants’ accounts for signs of possible fraud. The law would allow other financial institutions to join in the future so that fraudsters can’t move their money to avoid being caught.

The DWP plans to test the new crackdown from 2025 and then start using it properly from 2027. It’s thought to be running at full scale, with all banks involved, by 2031. We’ve put the full timetable below.

A Government report on the new measures gives the schedule as follows: “The policy has been designed in collaboration with operational colleagues, whereby a period of ‘test and learn’ will begin in 2025 with a limited number of banks and building societies.”

“The purpose of this approach is to get the data sharing agreement between DWP and third-party data holders right, before implementing the policy on a larger scale. After the focused test and learn, the policy will begin gradual roll-out (from 2027/28), with it reaching full scale by 2030/31.”

Here’s the timetable for the DWP bank checks – along with the savings made from stopping fraud and error:

The savings are mainly from detecting capital fraud and abroad fraud. Capital fraud – having too much money to claim benefits – is the main reason for the savings, making up £3.1 billion out of the total £3.6 billion.