The UK Government is taking steps to combat fraud and error in the welfare system through the proposed Fraud, Error and Debt Bill. These measures aim to safeguard taxpayers’ money while ensuring fairness for legitimate claimants. The bill introduces the Eligibility Verification Measure (EVM), which will involve limited data sharing between banks and the Department for Work and Pensions (DWP) to verify benefit eligibility.
Here’s a detailed breakdown of the proposed changes, their purpose, and the safeguards in place.
The Fraud, Error and Debt Bill aims to reduce the £10 billion annual cost of fraud and error in the social security system. This figure includes criminal activities by fraudsters as well as unintentional errors. Since the pandemic, the total amount of incorrectly paid benefits has reached £35 billion.
Key Objectives:
Prevent incorrect payments.
Deter fraudulent activity.
Ensure fairness for taxpayers and legitimate claimants.
Feature
Details
Bill Name
Fraud, Error and Debt Bill
Purpose
To combat fraud and error in the welfare system
Annual Cost of Fraud
£10 billion
Key Measure
Eligibility Verification Measure (EVM)
Data Use
Banks provide limited information to flag eligibility conflicts
Exclusions
State Pension excluded from the measure
Safeguards
Human oversight, compliance with GDPR, independent reporting mechanisms
Banks and financial institutions flag potential conflicts with eligibility rules, such as exceeding the £16,000 capital limit for Universal Credit.
The DWP uses this data to verify claims and identify incorrect payments.
The final decision on benefit eligibility will always involve a human agent.
Key Safeguards
The DWP has emphasized the inclusion of robust safeguards to protect claimants and ensure compliance with data protection laws:
Safeguards in Place:
Limited Data Access: No direct access to bank accounts or detailed spending information.
Human Oversight: Final benefit decisions will not rely solely on flagged data.
Appeals Process: Claimants can challenge benefit decisions using existing DWP appeals mechanisms.
Data Protection: All data will be processed in compliance with the UK GDPR and Data Protection Act 2018, overseen by the Information Commissioner’s Office.
Exclusions: The State Pension is excluded due to its minimal eligibility requirements.
New Powers and Measures
The proposed bill introduces several powers to strengthen the DWP’s ability to combat fraud:
Powers to Investigate Fraud:
Enhanced Investigations: New powers for search and seizure to address criminal gang activities defrauding the welfare system.
Penalties System Overhaul: Ensures that individuals committing fraud face appropriate consequences.
Debt Recovery: Enables the DWP to recover debts from individuals who can repay but have avoided doing so.
Statement from DWP Minister
DWP Minister Andrew Western clarified the purpose and scope of the EVM:
The EVM will not grant access to bank accounts or reveal detailed spending habits.
Banks will provide limited data to highlight eligibility conflicts.
These measures aim to identify incorrect payments and prevent debts from accumulating.
He also emphasized that safeguards such as reporting mechanisms and independent oversight will be included in the legislation.
FAQs
1. Will the DWP have access to my bank account?
No, the DWP will not have direct access to your bank account or details of your spending. Banks will only share limited data to flag eligibility concerns.
2. Does this affect State Pension payments?
No, the State Pension is excluded from the EVM due to its near universality and straightforward eligibility requirements.
3. What happens if my benefits are flagged?
Human agents will review flagged cases, and no decision will be made solely on automated data. You can challenge any decision through the DWP’s appeals process.
4. How does this comply with data protection laws?
All data will be processed under UK GDPR and the Data Protection Act 2018, with oversight from the Information Commissioner’s Office.
5. What are the penalties for fraud?
The new bill ensures stricter penalties for fraudulent activity, ensuring fairness for those who comply with the rules.
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