Yahoo News DWP trial finds 63,000 people breaking benefit rules for two reasons
A trial of new Department for Work and Pensions (DWP) plans to monitor bank accounts has revealed tens of thousands of benefit claimants breaching the rules. The DWP enlisted two high street banks to test the measures for their feasibility.
An anonymous bank identified 713,000 accounts held by individuals receiving Universal Credit, Pension Credit, or ESA (Employment and Support Allowance). Over a three-month period, it discovered that 60,000 accounts had too much money in them for the individuals to be entitled to benefits.
In another 3,000 accounts, there was evidence of 'abroad fraud' where the account holder was either living overseas while claiming UK benefits or going on holiday for longer than is permitted under DWP travel rules. Accounts were scrutinised for signs of being accessed from another country for more than four weeks consecutively.
The average monthly balance of the 60,000 accounts suspected of violating rules on capital limits was £50,000. The maximum savings allowed for claiming Universal Credit and ESA is £16,000, while for Pension Credit - a supplement for pensioners on a low income - it is £10,000.
At present, the DWP can only inspect accounts if it already suspects fraud or as part of the initial verification of a benefit claim. The new powers would permit regular monitoring of accounts to ensure people qualify for state support, reports Birmingham Live.
Benefit claimants are subject to restrictions regarding the time they can spend abroad. This includes those claiming Universal Credit, who face a limit of up to a month, whilst those on ESA and Pension Credit have a four-week cap.
Yet while State Pensions can be claimed from overseas, Pension Credit doesn't extend in this way.
Details of the Department for Work and Pensions' (DWP) data analysis initiative with banks has been unveiled in an Impact Assessment, noting that initial checks were carried out in July, August and September 2022. Out of the 713,000 accounts under observation, 58% were linked to Universal Credit, 22% to ESA and 20% to Pension Credit holders.
In relation to this matter, the DWP stated: "Among these, approximately 60,000 accounts were in risk of breaching the capital rule (8%) and 3,000 accounts in risk of breaching the abroad rule (less than 1%). For accounts at risk of breaching the capital rule, the average monthly balance was £50,000 and about 50% of those accounts were joint accounts."
In conclusion, it commented: "The above results of the small-scale tests with two banks and building societies indicate a strong potential for the use of banking data to identify possible capital and abroad fraud and error across a range of means-tested benefits."
Moreover, the report cites surveillance carried out in 2017, where a bank scrutinised a select number of cases and pinpointed 549 accounts with potentially suspicious activities under the Proceeds of Crime Act. The DWP examined these cases and found that 176 (32%) had excess savings, rendering them ineligible for the benefits they were claiming, while another 58 (11%) had foreign transactions suggesting an extended stay abroad beyond four weeks.
In 58 per cent of these instances where individuals had surplus capital, the DWP reported a 'positive outcome', with measures taken including a DWP compliance interview that can halt or suspend benefits, criminal investigation, administrative penalty or prosecution. Similarly, in 66 per cent of potential 'abroad fraud' cases, the DWP also reported a 'positive outcome' where benefits were stopped due to rule violations.
These fresh measures are part of the Data Protection and Digital Information Bill, currently being reviewed in the House of Lords. If the legislation is approved, it will be implemented in 2025 with a limited number of banks and building societies.
Once a successful data-sharing agreement has been established between the DWP and banks, the policy will commence a phased roll-out from 2027/2028 and reach full scale by 2030/2031.
