Officials will also be able to view people’s bank statements
The Department for Work and Pensions (DWP) could potentially target the wrong people with new powers to directly take funds from benefit claimants’ bank accounts. The fresh measures, set to be introduced under new legislation, would allow officials to directly deduct an amount from a person’s bank account if they owe the DWP money and refuse to repay it.
The money can be taken as a lump sum or in regular instalments. Investigators will inform the person before taking the amount and will also need to request at least three months of bank statements for the account, to ensure the person has the necessary funds available.
Martin Hartley, group CCO of business consultancy emagine and member of the Bank of England decision maker panel, said it’s important to have proper checks in place or people could be wrongly targeted.
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He said: “Without careful oversight, there is a danger that individuals could be wrongly identified as having received overpayments, or that funds could be incorrectly deducted from bank accounts. To prevent these risks, verification processes must be robust.
“Ensuring proper checks and balances is critical not only to protect claimants from undue financial harm but also to maintain public confidence in the integrity of the benefits system. ” The bill is currently under consideration by the House of Lords.
The legislation also provides powers to check the bank account details of those on certain benefits. These powers will initially be deployed to check the accounts of those receiving Universal Credit, Employment and Support Allowance and Pension Credit, to ensure claimants meet eligibility criteria for their payments.
The legislation outlines that an independent person will be appointed to oversee how the powers are used. They will evaluate whether the powers are being applied correctly and if they prove effective in preventing incorrect payments and recovering cash.
‘Systems can’t perform effectively’
Mr Hartley spoke about the factors that can lead to mistakes around benefit payments. He said: “Errors in overpayments or underpayments often stem from a combination of factors.
“This includes outdated or incomplete claimant information and delays in reporting changes. The combination of data sharing limitations and poor quality data creates inaccuracies as without clean data, systems can’t perform effectively.”
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He argued that improved verification checks should be brought in to help prevent this. The expert said: “To address these issues, there should be greater automation and real-time data verification between departments and financial institutions, supported by modern digital infrastructure. Simplifying the benefits system and providing clearer guidance for claimants would also reduce the likelihood of mistakes.
“Investing in staff training and ensuring claimants know they can easily update their information would go a long way towards improving accuracy and fairness across the system. ” A DWP policy document introducing the new legislation stated: “The bill will modernise DWP’s powers to ensure money spent is reaching those who need it, and not those who exploit the system.
“This will result in more money being recovered, more robust action being taken against those who attack the system, and an increased deterrent to potential fraudsters. The powers contained in this bill to address overpayments in the social security system will be tough on criminals and fair for the taxpayer – and DWP claimants – that money in the public sector is spent wisely and effectively.”