Ministers have clarified how new DWP powers to crack down on fraud will work, with new measures coming in to allow officials to directly take funds from people’s bank accounts.
New laws will allow investigators to directly take funds from bank accounts where there have been wrongful payments, with the Government planning to use the measures to crack down on benefit fraud.
Investigators will be also be able to request details of their bank statements to make sure they have the money available to pay.
The legislation also includes the provision that officials “may apply to the county court for a recovery order in respect of a payable amount”.
Explaining to MPs when the different measures will be used, Cabinet under secretary Georgina Gould said: “We will be able to seek alternative recovery action through the civil courts.
“While the bill will provide the powers to seek recovery directly through bank accounts and PAYE earnings, these might not always be the most appropriate or effective recovery route.
“For instance, the liable person might hold significant other property assets or keep assets or money abroad. In those cases, it would be unfair for us not to seek recovery.
“We therefore wish to work through established legal procedures to ensure that we can seek to pursue recovery through the most appropriate and effective mechanisms—for example, liability orders.”
The minister was asked what further efforts could be made if they request a direct deduction from the person’s account but this had failed.
Ms Gould said: “Alternative recovery methods will be available, either using other powers in the Bill to gather information around other accounts, or to recover money from other accounts held by that liable person. If an individual continues to try to frustrate the process, there are civil penalties of £300.
“If all the powers in the Bill are frustrated, the authorised officers will be able to apply to the courts to seize assets and to use other powers available. There are a number of options to ensure the full recovery of defrauded money back to the state.”
The new measures are intended to help prevent fraud and recover funds across public authorities, and not just to help the DWP get back owed amounts.
Investigators will also be able to issue Eligibility Verification Notices under the bill, requiring banks to provide information to the DWP to help them identify if an account is wrongfully receiving benefits.
Jasleen Chaggar, legal and policy officer at Big Brother Watch, voiced her concerns about the new powers. She told MPs: “On the eligibility verification measures—what we are calling the bank spying powers—we are recommending that they be removed in their entirety.
“These really are unprecedented financial surveillance powers. There are no other laws like this in this country. They permit generalised mass surveillance of everybody’s bank accounts.
“It is not just benefits claimants who will be targeted; it is everyone’s accounts, including yours and mine, will be scanned using algorithmic software to make sure that these eligibility indicators are not met.”
In presenting the bill before Parliament last year, Work and Pensions secretary, Liz Kendall, said: “The Eligibility Verification measure will not give DWP access to any bank accounts, nor any information on how claimants spend their money.
“The proposed new power instead helps verify benefit eligibility, using very limited information from banks and financial institutions.
“A human being will always be involved in any investigations and any decisions taken afterwards that affect eligibility or benefit awards, as they do now.”
