Millions of DWP claimants will have their bank account details checked under the new powers
The DWP is moving forward with a new eligibility measures to check the bank accounts of millions of benefit claimants. The checks will apply to 3 benefits, with a compliance expert speaking about how they could be expanded to other benefits.
As part of new laws passed in December 2025, banks will be required to check account records linked to certain benefits and flag any suspicious accounts to the DWP for investigation, where a person may not be entitled to receive their payments. Experts at compliance company SmartSearch said these account checks could be extended to “any other benefits where identity, financial circumstances or residency are relevant”. The DWP said it is making “good progress” in deploying the new powers and will start a “test-and-learn phase” this year, to try out using the new measures.
It plans to gradually expand the checks, with a full rollout expected by 2029/2030. The DWP is working with industry partners to ensure the checks are done “safely and effectively.” The legislation sets out that the checks will initially apply to people receiving:
- Universal Credit
- Employment and Support Allowance
- Pension Credit.
The legislation mentions that these checks could be expanded to other benefits in the future. Phil Cotter, CEO of compliance company SmartSearch, spoke about where the remit of the bank account checks could be extended to in future.
Expanded eligibility checks
He said: “In principle, eligibility checks could be extended to any other benefits where identity, financial circumstances or residency are relevant. These could include Child Benefit, Carer’s Allowance, Disability Living Allowance and Personal Independence Payment, although the appropriate checks would obviously depend on the specific eligibility criteria.”
Mr Cotter said the new bank account checks could do a lot of good. He explained: “The DWP’s planned test-and-learn phase is an opportunity to establish how bank account checks can reduce fraud and error without wrongly penalising people who are entitled to support. Used effectively, these checks could help identify discrepancies in claimants’ eligibility earlier, prevent incorrect payments and reduce the cost of recovering overpayments later.”
He added that the priority for the test phase “must be accuracy,” to ensure the checks “identify genuine fraud and administrative errors while ensuring that public money reaches those who are entitled to it”. Mr Cotter suggested that the DWP could check the bank data against other “reliable data sources”, such as “HMRC records” and “verified identity information”, to ensure officials have an accurate picture of a claimant’s situation.
‘Accurate and proportionate’
He stressed that the DWP must learn from the initial test phase rather than rushing to expand the programme: “It is important that any expansion is based on evidence from this initial rollout, rather than simply extending the powers across the benefits system as quickly as possible. The DWP needs to be able to demonstrate that the checks are accurate, proportionate and subject to effective oversight. This will help ensure that any future expansion reduces fraud and error without undermining confidence among people who rely on benefits.”
The DWP previously reassured the public that no one will have their benefits stopped based solely on their bank account being flagged up. The new laws also give investigators the power to take money directly from bank accounts if a person owes money to the DWP and refuses to settle their debt.
This power is aimed at recovering funds from people who have left the benefit system. Previously, the DWP could only recover debt by taking money directly from ongoing benefit payments or PAYE wages.
