The powers are aimed at tackling fraud and error
The Department for Work and Pensions (DWP) has issued guidance outlining what banks and financial institutions could be required to monitor under new benefit Eligibility Verification powers.
The new framework is part of the UK Government’s broader campaign to tackle fraud and error within the welfare system and will initially cover those receiving Universal Credit, Pension Credit and Employment and Support Allowance (ESA).
Through the Eligibility Verification Measure (EVM), banks may have to review accounts where certain DWP benefits are paid and flag cases meeting specific “eligibility indicators” connected to benefit regulations. The DWP explained the checks aim to help detect incorrect payments resulting from fraud, claimant error or official error, while also stopping people from accumulating substantial overpayments that must later be paid back.
According to the newly published Code of Practice on Eligibility Verification Notices, banks may be asked to flag accounts where savings surpass benefit thresholds, reports the Daily Record. For Universal Credit, this might include accounts containing more than £16,000, which is the maximum savings limit for the benefit.
The guidance additionally notes the DWP may look for evidence that a claimant has remained abroad longer than benefit regulations typically allow.
What banks can’t share with the DWP
The DWP emphasised there are strict legal restrictions on what banks can share. The Code specifies that financial institutions are forbidden from disclosing transaction details, meaning the DWP is unable to monitor what people buy, where they spend their money or their individual buying habits.
Banks are equally barred from sharing “special category data”, including details relating to political opinions, religious beliefs, ethnicity or health information.
The guidance states: “DWP is prohibited by law from sharing personal data with financial institutions under this power, and from requesting transaction information and special category data.”
The document further clarifies that the DWP is unable to request banks to search for named benefit claimants. The code also repeatedly stresses strict limits apply to the information banks can provide.
Banks would instead have to apply eligibility criteria across their own systems and only return restricted details where accounts correspond to the indicators outlined in an Eligibility Verification Notice (EVN).
What banks can share with the DWP
The details that may be passed to the DWP include account information, names and dates of birth associated with accounts, and evidence demonstrating how an account satisfied the eligibility indicator. Examples might include confirmation that savings surpassed a particular figure or proof that an account had been regularly used outside the UK.
The DWP emphasised that information returned by banks does not automatically indicate that someone has broken the rules. The Code states: “No decisions about benefit entitlement will be made automatically on this information alone.”
Rather than relying solely on this data, the DWP must cross-reference it with existing evidence held on a claim before determining whether it should be investigated further.
The guidance adds that a “Test and Learn” rollout phase will take place, initially involving a limited number of banks before a wider rollout. Throughout this period, the DWP has said it will evaluate the system’s effectiveness, the reliability of the data, and whether the safeguards are functioning as intended before rolling it out more broadly.
The DWP estimates benefit fraud and error resulted in £9.6 billion of overpayments during the 2025/26 financial year.
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