DWP to take money direct from bank accounts in new benefit crackdown

The Department for Work and Pensions (DWP) is set to empower its benefit fraud investigators with the ability to directly extract money from bank accounts or payslips, according to reports. Currently, a court order is required before investigators can deduct funds from someone's wages or bank accounts.

However, new measures expected to be included in the upcoming Fraud, Error and Debt Bill will simplify this process, as reported by the Sunday Telegraph. The new powers will also extend to accessing information about suspected fraudsters from all private companies, not just banks, utilities and employers.

However, these rules will not apply to the state pension. This move is part of the DWP's plan to save £1.6 billion over the next five years through a crackdown on benefit fraud.

Writing in the Sunday Telegraph, Work and Pensions Secretary Liz Kendall criticised the outdated nature of investigators' powers, calling it "absurd". She expressed that the enhanced information-gathering powers would enable the state to "stop serious fraud in its tracks by making sure people really are who they say they are".

She added: "My team are still, in 2024, sending letters to gather evidence for those suspected of welfare fraud, slowing them down to a snail's pace when they could be shutting down serious fraud cases. Our bill will give them similar powers as HMRC to investigate fraudsters – it's time we give them the tools they need for the fight.", reports the Mirror.

Plans to give the Department for Work and Pensions (DWP) greater power to access financial data in a bid to combat benefit fraud have drawn sharp criticism from privacy campaigners. Big Brother Watch has labelled the proposals "Orwellian" and an invasion of privacy.

Silkie Carlo, the group’s director, commented: "This blank cheque to force private companies to snoop and report on the country's poorest citizens to the state is intrusive, excessive and will create a culture of fear among millions of people claiming benefits. Ms Kendall dismissed claims that the Government would be ".

In contrast, Ms Kendall has refuted any suggestions that the Government would be intrusively inspecting bank accounts, dismissing such accusations as "nonsense". She emphasised the presence of human oversight to review any automated alerts indicating potential fraud.

The Government has made it clear that the DWP would not directly access bank accounts, nor would the information obtained be distributed to third parties.

Fraudulent activity within the welfare system, according to the Government, burdens the taxpayer with approximately £10 billion annually. The forthcoming Fraud, Error and Debt Bill, continuing efforts from the previous Conservative leadership, aims to grant the DWP enhanced capabilities to examine financial records that may point to instances of welfare fraud.

In a landmark case this year, members of a criminal syndicate received combined jail sentences exceeding 25 years after fraudulently obtaining over £53 million in Universal Credit—the largest case of its kind in England and Wales to date. The Government also recognises that the nature of fraud is increasingly sophisticated and contends that without newer legal powers, the DWP is ill-equipped to effectively tackle and keep abreast of evolving fraudulent schemes.