The Department for Work and Pensions (DWP) is to be given more powers to check the bank accounts of certain benefits claimants – including for those who claim Universal Credit.

Under newly-announced plans to bring in tighter controls around benefit fraud, anyone suspected of claiming benefits fraudulently will be subjected to bank account checks.

With four government benefits under scrutiny at first.

Which benefits will be checked first?

Under the new rules, anyone claiming the following four means-tested benefits could be subjected to bank account checks.

These are:

• Universal Credit
• Jobseeker's Allowance
• Employment and Support Allowance
• Housing Benefit

This is because the savings threshold to be able to claim these benefits is usually £16,000, meaning that if anyone claims one of these benefits and has more than £16k in savings, they could be committing fraud.

Financial planner Steven Kibbel, from Gold IRA Companies, told the Birmingham Mail:

'Universal Credit is likely to be a major focus, as it's one of the most widely claimed benefits and has a savings limit of £16,000.

'Other benefits that could be subject to these checks might include Jobseeker's Allowance, Employment and Support Allowance, and Housing Benefit.

'The Government seems particularly interested in identifying those who might be claiming benefits while having savings above the threshold or those who are spending extended periods abroad, which could affect their eligibility.'

And, while some have called the plans to check bank accounts 'invasive', others said that the DWP is simply 'trying to ensure that public funds are being properly allocated, and they’re arguing that the level of fraud demands a tougher stance'.

How will accounts be checked?

However, it's important to note that the DWP will not have direct access to claimants' bank accounts.

Instead, the government department will rely on a claimant's bank to inform them if figures 'do not add up.'

Under the new plans, banks will be required to flag when a person's bank account doesn't match the eligibility criteria of their benefits.

The government confirms that the new Bill will 'require banks and financial institutions to share data that may show indications of potential benefit overpayments'.

This means they'll be able to check for savings exceeding £16,000 – the threshold for claiming some means-tested benefits.

This is different to how the system currently works – as the DWP can currently only request information from a claimant's bank if there are 'reasonable grounds to suspect fraud'.

The government has also confirmed that the 'DWP will not have access to people’s bank accounts and will not share their personal information with third parties'. 

'Leave no stone unturned'

It comes as part of Prime Minister Sir Keir Starmer's new Fraud, Error and Debt Bill – a Bill that will introduce tighter rules to help the DWP catch out fraudsters more easily.

Under the proposals, the PM said the DWP will be given more powers to check fraudulent benefit claims, in a 'leave no stone unturned' approach to welfare and benefit abuse.

Announcing the news as part of the Labour Party conference on Tuesday 24 September, Sir Keir said:

'If we want to maintain support for the welfare state, then we will legislate to stop benefit fraud. Do everything we can to tackle worklessness.'