The UK Government has unveiled what it is calling “the biggest fraud crackdown in a generation” in an effort to reduce losses in the welfare system. Central to this effort is the Public Authorities (Fraud, Error and Recovery) Bill, which the Department for Work and Pensions (DWP) projects could recover £1.5 billion in taxpayer money over the next five years.
Among the bill’s key measures are a range of new deterrents targeting benefit fraud. These include:
Driving bans of up to two years for persistent offenders who fail to repay their debts.
The DWP gaining the legal authority to recover money directly from the bank accounts of individuals found guilty of fraud.
A new system called Eligibility Verification, which will allow organizations like banks to flag potentially fraudulent benefit claims based on financial data.
However, the government has clarified that the Eligibility Verification Measure will not give the DWP direct access to people’s bank accounts, nor will it allow officials to see how claimants spend their money. Instead, the system is designed to flag specific indicators, such as individuals who may have savings or income above the eligibility thresholds for means-tested benefits like Universal Credit, Pension Credit, or Employment and Support Allowance.
To ensure the safe and lawful use of these powers, the DWP has published 11 detailed factsheets, outlining how the new measures will be rolled out, overseen, and kept within strict legal parameters. These documents highlight that:
The measures will begin implementation in 2026, following a “test and learn” phase.
This phased approach will be used to assess how effectively and proportionately the new powers are being applied.
The DWP and the Cabinet Office will continue to collaborate with industries, consult stakeholders, and publish guidance and Codes of Practice as the measures come into effect.
It’s important to note that only essential data will be shared with the DWP. Banks will not be allowed to provide transaction details or in-depth financial records. The information will be limited to specific data points that help verify whether claimants meet the criteria for receiving benefits. This could include confirming whether someone has more than £16,000 in savings — the upper limit for receiving Universal Credit.
The factsheets also confirm that:
Financial institutions could face penalties if they share too much information, such as details of transactions or spending habits.
The DWP is not permitted to monitor how individuals use their benefits.
No data will be shared on the assumption or suspicion of criminal activity — the approach is strictly about ensuring accurate eligibility.
Additionally, the DWP is expanding its efforts beyond the financial sector. It is set to partner with third-party organizations, including airlines, to identify whether people are claiming benefits from abroad in breach of eligibility rules. For example, someone claiming residency-based benefits while living overseas could be disqualified.
The government insists the legislation will focus solely on improving accuracy, preventing overpayments, and stopping fraud, without infringing on the personal privacy of the vast majority of benefit recipients. The overall aim, officials say, is to safeguard public funds, ensure fairness, and restore public confidence in the welfare system.
1
2
3
4
.svg)
