State pension fraud update as DWP explains when it will check bank accounts

The DWP has explained under what conditions it plans to check state pensioners' bank accounts in its efforts to clamp down on benefit fraud.

Pensions secretary Mel Stride told Parliament the proposed new powers will only be used in instances where there is "a clear signal of fraud and error".

He was responding to a question from fellow Conservative MP, Nigel Mills, who wanted to know if officials would be checking every state pensioner's bank account for illegal activity.

Mr Stride said in his reply: "There has been a great deal of scaremongering about what exactly these powers are about. I can make it categorically clear from the dispatch box that these powers are there to make sure that, in instances where there is a clear signal of fraud or error, my department is able to take action. In the absence of that, it will not."

Proposed changes to the Data Protection and Digital Information Bill set out to provide greater powers to officials tackling fraud in the welfare system.

When the amendments were announced last month, Mr Stride said: "These new powers send a very clear message to benefit fraudsters – we won’t stand for it.

"These people are taking the taxpayer for a ride and it is right that we do all we can to bring them to justice. These powers will be used proportionately, ensuring claimants’ data is safely protected while rooting out fraudsters at the earliest possible opportunity."

Fraud officials would have new powers to require data from third parties, particularly banks and financial organisations, to help the UK Government reduce benefit fraud and save the taxpayer up to £600million over the next five years.

Currently, the DWP can only undertake fraud checks on a claimant on an individual basis, where there is already a suspicion of fraud.

The new proposals would allow regular checks to be carried out on bank accounts held by benefit claimants to spot increases in their savings that push them over the benefit eligibility threshold, or when people spend more time overseas than the benefit rules allow for. The Government has stated this will help identify fraud so that action can be taken much more quickly.

In efforts to protect individual privacy, only a minimum amount of data will be accessed and only in instances that show a potential risk of fraud and error.

Secondary legislation including privacy safeguards is expected to be brought forward in the new year. New pensions minister Paul Maynard said the checks will focus initially on Universal Credit, Employment and Support Allowance, Pension Credit and Housing Benefit.

State pension payments are set to increase 8.5 percent in April next year. This will increase the full new state pension from £203.85 a week to £221.20 a week.

An individual can check how much state pension they are on track to receive using the state pension forecast tool on the Government website.

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