The Department for Work and Pensions (DWP) has confirmed the start of a new initiative aimed at reducing benefit fraud, set to begin in 2026.
As part of the UK Government’s broader efforts, the Eligibility Verification Measure will involve collaboration with third-party organizations such as banks.
This new approach is designed to enhance the integrity of the welfare system and address fraud concerns. Daily Record provides additional insights into the specifics of this measure and its potential impact.
A Closer Look At the New Fraud Prevention Measures
The Eligibility Verification Measure is a key component of the Public Authorities (Fraud, Error and Recovery) Bill, designed to save taxpayers £1.5 billion over the next five years.
These measures include new powers for the DWP to recover funds directly from fraudsters’ bank accounts, as well as introducing penalties for those who fail to pay back money owed.
However, the DWP will not have direct access to personal bank accounts or transaction data.
This approach focuses on preventing fraudulent claims by utilizing external data sources to flag potential issues, rather than giving the DWP unrestricted access to individuals’ financial details.
As part of this measure, financial institutions will be required to inform the DWP when certain eligibility criteria, such as income thresholds, are exceeded by benefit claimants.
Understanding the Eligibility Verification Process
The DWP will work closely with banks and other financial institutions to identify individuals who may exceed the eligibility criteria for means-tested benefits such as Universal Credit.
This collaboration will help prevent overpayments and reduce fraud by flagging individuals who may have breached eligibility rules, such as exceeding the £16,000 income threshold.
Despite concerns about privacy, the legislation has been carefully crafted to limit the type of information that can be shared.
While financial institutions will provide information on income levels, transaction data will not be shared, thus safeguarding the privacy of individuals receiving benefits. This ensures that the DWP’s powers are used effectively while protecting personal financial details.
Safeguards and Oversight to Ensure Privacy
One of the primary concerns regarding the new verification process is data privacy. To address this, the DWP has introduced strict safeguards and reporting mechanisms to ensure the powers are used proportionately and effectively.
Banks will face penalties if they share excessive information, such as transaction details, ensuring that personal financial data remains protected.
The DWP will also collaborate with the Cabinet Office to implement these measures in a transparent manner.
Additionally, the test and learn approach will be employed to ensure that the new powers are rolled out carefully and that the public is kept informed about how the data-sharing process works.
The guidance on GOV.UK states :
The Government will begin implementing the Bill measures from 2026. For the Eligibility Verification Measure, the Government will implement a ‘test and learn’ approach to ensure the new powers to tackle public sector fraud are being used proportionally and effectively.
This approach ensures that the powers are applied in an appropriate, proportionate, and effective manner.
