The Department for Work and Pensions has outlined the final rules for a new system enabling banks to assist in identifying potential benefit errors, aiming to reduce fraud while safeguarding claimants’ privacy amid concerns over data sharing limits.
The Department for Work and Pensions has published the final rules for a new system that will let it ask banks and other financial firms to help spot possible benefit errors, in a move that could affect claimants of Universal Credit, Pension Credit and Employment and Support Allowance. The guidance sits under the Public Authorities (Fraud, Error and Recovery) Act 2025, which was approved in December, and follows a consultation on how the powers should operate. According to the government, the aim is to reduce fraud and mistaken payments while keeping the process proportionate.
Under the Eligibility Verification Measure, the DWP will send an Eligibility Verification Notice to a financial institution, setting out the eligibility indicators it wants checked. Banks will then use the information they already hold to look for accounts that match those indicators, rather than being given the personal details of named claimants. The Code of Practice says the process is intended to identify potential overpayments, not to make an immediate decision on entitlement.
The rules also draw clear limits around what can be shared. Financial firms cannot provide transaction data showing what someone bought or where they spent money, and the DWP cannot use the notices to obtain broad access to personal banking records. The code says data should be handled securely, while the legislation generally bars the sharing of special category data except in limited circumstances.
A flagged account will not automatically mean a claimant has done anything wrong. The Child Poverty Action Group says the DWP will still need to carry out its own checks and consider whether there is a legitimate explanation, such as savings that are partly disregarded when benefit entitlement is calculated. Only after that would the department decide whether to alter an award, recover an overpayment or take further action.
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