DWP Issues First Bank Notices to Combat Benefit Fraud

The Department for Work and Pensions (DWP) has issued its first eligibility verification notices to banks and financial institutions, initiating a new crackdown on benefit fraud and incorrect claims. Operating under the Public Authorities (Fraud, Error and Recovery) Act 2025, the system requires financial institutions to check account data against specific eligibility indicators to determine if claimants remain entitled to payments.

The measure initially targets recipients of Universal Credit, Pension Credit, and Employment and Support Allowance, while the State Pension is explicitly excluded. The DWP aims to identify individuals with excessive savings or those spending excessive time abroad. While banks can share account holder names, balances, and foreign transaction dates, they are prohibited from providing full transaction histories or spending details and face penalties for unauthorized data sharing.

Government officials estimate the measure will identify between 50,000 and 100,000 overpayments annually, potentially saving taxpayers £1.2 billion over five years. The DWP is currently utilizing a controlled test-and-learn phase to assess operational impacts before scaling the system. The government has maintained that humans, rather than artificial intelligence, will make all final decisions regarding benefit awards or eligibility.