DWP bank account checks will 'wrongly target' people on these three benefits first

DWP bank account checks will 'wrongly target' people on these three benefits
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Bank account checks from the Department for Work and Pensions are "a step too far", with some claimants WRONGLY targeted. Sebrina McCullough, director of external relations at debt advice group Money Wellness, has spoken out over the new DWP powers.

She said: "To propose legislation that forces banks and building societies to report data on a mass scale is a step too far. The Government says it wants to rebuild trust with the nation - the first step shouldn't be creating what is essentially a surveillance charter on how people earn, spend and save.

"There is a very real risk that harm will be created and it is unlikely to achieve the stated objective of preventing large-scale fraud." Ms McCullough said: "By far a greater problem is overpayment and how it’s clawed back, which forces claimants into crisis and situations where it’s impossible to live.

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"Around 30 percent of benefit claimants seeking debt support each day do so as a direct result of being unable to repay a benefit overpayment. Often the problem doesn’t lie with the claimant, but with how the claim is processed.

"We’ve even seen several instances where on investigation people were found not to have not been overpaid but were still pursued for money." She explained: "Any legislation must consider not just how to prevent fraud but also how to use the data available to proactively engage people who should be claiming but do not know they are entitled.

"The system must be simplified and streamlined which, in itself, should mean that issues naturally fall and fewer claimants will be vilified in the process." The DWP overpaid £8.3bn to benefit claimants between April 2022 and 2023.

Although alleged fraud accounted for £6.5bn of this, many people face debt because of mistakes made by the DWP. The Universal Credit overpayment rate was 12.4% (£6,460m) in FYE 2024, compared with 12.7% (£5,500m) in FYE 2023, meaning it is a particular risk.

The Housing Benefit overpayment rate was 6.3% (£980m) in FYE 2024, compared with 5.7% (£860m) in FYE 2023, and was in second spot. The Pension Credit overpayment rate was 9.7% (£520m) in FYE 2024, compared with 6.8% (£330m) in FYE 2023.