The Department for Work and Pensions (DWP) has published new guidance explaining what banks and financial institutions may be asked to check under new benefit Eligibility Verification powers
The Department for Work and Pensions (DWP) has issued fresh guidance outlining what banks and financial institutions may be required to examine under new benefit Eligibility Verification powers.
The new framework is part of the UK Government’s broader effort to tackle fraud and error within the welfare system and will initially cover people receiving Universal Credit, Pension Credit and Employment and Support Allowance (ESA).
Through the Eligibility Verification Measure (EVM), banks may be obliged to review accounts in receipt of certain DWP benefits and flag cases where accounts display particular “eligibility indicators” connected to benefit regulations.
The DWP stated the reviews are intended to help detect incorrect payments resulting from fraud, claimant error or official error, while also stopping people from accumulating substantial overpayments that subsequently require repayment.
According to the new Code of Practice on Eligibility Verification Notices, banks could be requested to highlight accounts where savings surpass benefit thresholds, reports the Daily Record.
For Universal Credit, this might involve accounts containing more than £16,000, which represents the upper capital limit for the benefit.
The guidance also indicates the DWP may seek information relating to evidence a claimant has remained abroad longer than benefit rules typically permit.
Nevertheless, the DWP emphasised there are stringent legal restrictions on what banks can disclose. The Code stipulates that financial institutions are forbidden from disclosing transaction details, which means the DWP is unable to access what people are purchasing, where they shop, or their individual spending patterns.
Banks are equally prohibited from sharing “special category data”, including 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 request banks to search for named benefit claimants.
The code also repeatedly stresses strict limits apply to the information banks can 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 than this, financial institutions would apply eligibility criteria across their own systems, returning only limited information where accounts satisfy 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 associated with accounts, and particulars 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 regularly 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.”
Rather, the DWP must examine the information alongside existing evidence 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 system’s effectiveness, the reliability of the data, and whether protective measures are functioning as intended before proceeding with broader implementation.
The DWP estimates that benefit fraud and error led to £9.6 billion in overpayments during the 2025/26 financial year.
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