The Department for Work and Pensions has published guidance on new Eligibility Verification powers that allow banks to run automated checks on accounts receiving Universal Credit, Pension Credit and ESA — here is what the rules mean for claimants and what banks can and cannot share.
The Department for Work and Pensions (DWP) has released guidance detailing what banks and financial institutions may be required to monitor under new benefit Eligibility Verification powers.
The new framework forms part of the UK Government’s broader offensive against fraud and error within the welfare system, and will initially cover those claiming Universal Credit, Pension Credit and Employment and Support Allowance (ESA).
Under the Eligibility Verification Measure (EVM), banks may be obliged to scrutinise accounts receiving certain DWP benefits and identify instances where accounts meet specific “eligibility indicators” tied to benefit regulations.
The DWP stated the checks are intended to help detect incorrect payments arising from fraud, claimant error or official error, while also preventing claimants from accumulating substantial overpayments that must subsequently be repaid.
According to the new Code of Practice on Eligibility Verification Notices, banks could be required to flag accounts where savings surpass benefit thresholds, reports the Daily Record.
For Universal Credit, this could encompass accounts holding more than £16,000, which represents the upper capital limit for the benefit.
The guidance further states the DWP may seek information relating to signs that a claimant has spent more time overseas than benefit rules ordinarily permit.
However, the DWP confirmed there are stringent legal restrictions governing what banks are permitted to share. The Code stipulates that financial institutions are forbidden from disclosing transaction details, which means the DWP is unable to access information about what people are purchasing, where they shop, or their individual spending patterns.
Banks are also barred from sharing “special category data”, encompassing details relating to political opinions, religious beliefs, ethnicity, or health information.
The guidance states: “DWP is prohibited by law from sharing personal data with financial institutions under this power, and from requesting transaction information and special category data.”
What banks cannot share
The document further clarifies that the DWP is not permitted to ask banks to search for named benefit claimants.
The code repeatedly emphasises that strict limitations apply to the information banks are able to provide.
DWP said financial institutions are prohibited by law from sharing:
- Transaction histories
- Spending information
- Financial statements
- Special category data such as political opinions, religion or ethnicity
Rather, financial institutions would apply eligibility criteria across their own systems, returning only limited information where accounts match the indicators outlined in an Eligibility Verification Notice (EVN).
The information that may be passed on to the DWP includes account details, names and dates of birth linked to accounts, and specifics demonstrating how an account met the eligibility indicator.
Examples might include confirmation that savings surpassed a certain threshold, or evidence that an account had been routinely used outside the UK.
The DWP emphasised that information returned by banks does not automatically indicate that an individual has acted improperly. The Code states: “No decisions about benefit entitlement will be made automatically on this information alone.”
Instead, the DWP is required to examine the information alongside existing evidence already held within a claim before determining whether further investigation is warranted.
The guidance further confirms that a “Test and Learn” rollout phase will take place, initially involving a limited number of financial institutions prior to any wider expansion.
Throughout this period, the DWP has stated it will evaluate the effectiveness of the system, the accuracy of the data provided, and whether the safeguards in place are functioning as intended before proceeding with broader implementation.
The DWP estimates benefit fraud and error resulted in £9.6 billion of overpayments during the 2025/26 financial year.



You must be logged in to post a comment Login