The Department for Work and Pensions (DWP) will be able to scrutinise the bank accounts of Universal Credit recipients when their savings hit a mere £6,000 under plans. As it stands, Universal Credit rules stipulate that individuals or couples with over £16,000 in savings are ineligible for payments.
Under fresh government proposals in the Fraud, Error and Debt Bill, those with savings exceeding £6,000 will face slashed benefit payments. The DWP explains that if you have more than £6,000 in cash, savings and investments, “your payment will be reduced by £4.35 for every £250 you have between £6,000 and £16,000. Another £4.35 is taken off for any remaining amount that is not a complete £250.”
Separate guidance from the DWP reveals a new Bill “will give [the] DWP the power to require banks and other financial institutions to provide information to help verify a claimant’s entitlement to benefits and identify incorrect payments. Banks and other financial institutions will be required to look at the data they hold on accounts in receipt of a specified DWP benefit payment and match these accounts to specific eligibility indicators determined by DWP (and defined within an Eligibility Verification Notice) and highlight where the criteria have been met.
“Eligibility Verification Notices will be sent to banks and other financial institutions and will set out the specific information required. These will include the eligibility indicators which will be used to determine whether information should be shared with DWP.
“No personal information will be shared by DWP. This power can only be used to obtain information on accounts that receive a specified DWP benefit, and any accounts linked to that benefit receiving account if they match the eligibility indicators set by DWP.”
The statement continues: “The eligibility indicators in the notice are the specific criteria that banks and other financial institutions will be asked to check relevant accounts against. They will be based on the eligibility rules for the specified benefits.
“For example, in Universal Credit, an individual cannot hold more than £16,000 in savings and remain eligible for Universal Credit, unless this capital is a result of a specified exception. Any accounts identified will be considered by DWP for further inquiry, if necessary.
“No decisions about benefit entitlement will be made on this information alone.” The DWP guidance, outlined in a gov.uk document, states that banks and other financial institutions will be required to share only limited information in response to an Eligibility Verification Notice.
This could include:.
• Specified details about the account(s) (such as sort code and account number).
• Specified details about the account holder(s) (such as their name(s) and date(s) of birth).
• Specified details about how the account(s) meets the eligibility indicators.
The government has pledged to make a £5 billion cut from the welfare budget by 2030, with significant reforms targeting PIP (Personal Independence Payment) eligibility. Liz Kendall, Secretary of State for Work and Pensions, said: “We are turning off the tap to criminals who cheat the system and steal law-abiding taxpayers’ money. This means greater consequences for fraudsters who cheat and evade the system, including as a last resort in the most serious cases removing their driving licence.”
The DWP deems savings between £6,000 and £16,000 enough to generate a notional monthly income – so if you’ve got £6,300 saved, they reckon the £300 over £6,000 brings in £8.70 per month, which gets deduced from your Universal Credit.
For those on income-based JSA, income-related ESA, Income Support or Housing Benefit, there’s a £1 weekly deduction for every £250 above £6,000 in savings. These benefit payments are usually received every two weeks.
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