Overview
- The Fraud, Error and Recovery Act enables the DWP to issue Eligibility Verification Notices requiring banks to flag accounts linked to Universal Credit, ESA and Pension Credit for entitlement checks.
- Officials can now recover debts through direct deduction orders from claimants’ bank accounts, with advance notice and the right to dispute before any withdrawal.
- The department’s consultation on bank data checks runs until February 27, with internal estimates of 50,000 to 100,000 overpayments identified annually and up to 100,000 people affected in year one.
- The DWP forecasts £2.1 billion in savings over five years and aims to cut fraud and error to 2.8% by 2028/29, saying the regime includes safeguards and independent oversight.
- Security specialists call for robust digital identity and real-time HMRC or payroll data integration to reduce false positives, while charities and a Commons committee warn about privacy risks and potential overreach; courts may also suspend driving licences for unpaid welfare debts over £1,000.