By Lauren Haughey Linda Howard
The UK Government announced this year what it described as ‘the biggest fraud crackdown in a generation’. It is aiming to significantly lower the misuse of funds within the welfare system.
The Department for Work and Pensions (DWP) has indicated that the Public Authorities (Fraud, Error and Recovery) Bill could potentially save taxpayers around 拢1.5 billion over the upcoming five years. Among the key initiatives are proposals for driving disqualifications of up to two years for persistent benefit fraudsters.
Other measures include the empowerment of the DWP to directly reclaim money from offenders’ bank accounts, and the introduction of Eligibility Verification. The latter initiative would allow entities such as banks to identify and report suspected fraudulent benefit claims.
DWP details on new fraud powers
The DWP has made available 11 new factsheets that offer a deeper understanding of how these strategies are executed. These documents confirm the government’s plan to commence the rollout of the proposed measures starting in 2026.
The sheets also outline the protective measures, reporting systems, and supervisory procedures designed to guarantee the ‘appropriate, proportionate, and effective use of the powers’. As reported by the Daily Record, advice from 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.
“DWP and the Cabinet Office will continue to work with industry to implement the new measures, consult stakeholders on Codes of Practice and publish guidance.”
The DWP is set to expand its data-gathering capabilities, potentially drawing from sources like airlines to check if benefit claims are being made from abroad, which could contravene eligibility rules.
What does the Eligibility Verification Measure involve?
It’s essential to note that the DWP will not have unlimited access to the bank accounts of people receiving means-tested benefits such as Universal Credit, Pension Credit, and Employment and Support Allowance. In a partnership with financial institutions, the DWP aims to pinpoint claimants who may not meet the criteria for means-tested benefits, such as the 拢16,000 income threshold for Universal Credit.
This collaboration will enable the DWP to monitor for possible overpayments or fraud, officials say. The legislation restricts banks and other financial bodies from sharing only limited information and explicitly forbids the disclosure of transactional data, ensuring the DWP cannot view the spending habits of those receiving benefits, say officials.
Moreover, the factsheet emphasises that oversharing by banks and financial institutions, including transactions, could result in penalties. It adds: “Any information shared through the Eligibility Verification Measure will not be shared on the presumption or suspicion that anyone is guilty of any offence.鈥
New DWP measures to combat fraud
The government says the upcoming Bill will realise the UK Government’s manifesto commitment to safeguard taxpayers’ money, ensuring each pound is spent wisely and efficiently:
The provisions in this Bill will empower the Public Sector Fraud Authority to deploy or enforce:
New powers of search and seizure – so DWP can control investigations into criminal gangs defrauding the taxpayer. Allowing DWP to recover debts from individuals no longer on benefits and not in PAYE employment who can pay money back but have avoided doing so. New requirements for banks and building societies to flag where there is an indication there may be a breach of eligibility rules for benefits – preventing debts accruing. All the powers will include strong safeguards to ensure they are only used appropriately and proportionately – including new inspection and reporting mechanisms. DWP will have a clearly defined scope and clear limitations for the use of all the powers it is introducing, and staff will be trained to the highest possible standards.
The measures in this Bill will enable the Public Sector Fraud Authority to:
Better detect and prevent incorrect payments across the public sector through new information gathering and sharing powers. Improve fraud management in future emergencies by creating specialist time limited powers to be used in crisis management situations – building on lessons learned during COVID-19. Reduce fraud against the public sector by using its expertise to take action on behalf of other departments, against those who attack the public sector. Improve the government鈥檚 ability to recover public money, through new debt recovery and enforcement powers. Use new powers of entry, search and seizure to reduce the burdens on the police in the most serious criminal investigations. Use strong non-criminal sanctions and civil penalties to provide an alternative to criminal prosecution and to deter fraud.
The Public Sector Fraud Authority will adopt a ‘test and learn’ strategy when using these powers, trialling different approaches and expertise to find the most effective way to combat public sector fraud.