Government Response

The Government responded to this petition on Thursday 15th February 2024

This measure does not give DWP access to pensioners or any claimants’ bank accounts and will only flag information if it is relevant to someone’s eligibility for the benefits they are receiving.

Fraud is a growing problem across the economy, accounting for over 40% of all crime. This problem exists in the welfare system too. Although down by 10% in 2022-23, £8.3bn was overpaid in fraud and error last year in the benefit system and it is right we do all we can to reduce this.

The current powers DWP have to ensure benefit correctness are mostly over 20 years old. In this time, fraud has evolved and become increasingly sophisticated. We must modernise and strengthen DWP’s legislative framework to give those fighting fraud the tools they need to stand up to future challenges and minimise the impact of genuine mistakes that can lead to debt.

The Government introduced the third party data gathering measure as an amendment to the Data Protection and Digital Information (DPDI) (No.2) Bill in November 2023. The DPDI Bill continues its passage through Parliament and there will be further opportunity for parliamentary scrutiny. The measure was announced in May 2022 as part of the Department’s fraud plan, “Fighting Fraud in the Welfare System” (www.gov.uk/government/publications/fighting-fraud-in-the-welfare-system). This plan outlined new powers DWP wanted to legislate for to tackle the fraud and error found in the welfare system.

The third party data gathering power will provide new routes to establish whether someone is entitled to benefit, making it harder for fraudsters to steal from the taxpayer. The measure will also address error by ensuring claimants are in receipt of the correct amount of benefit that they are entitled to, preventing people from inadvertently getting into debt.

There are a number of misconceptions about this measure. To be clear, the measure does not grant DWP access to any bank accounts and it does not allow DWP to see how claimants are spending their money.

What this measure will do is require third parties to look within their own data and provide relevant information to DWP that may signal where claimants do not meet the eligibility criteria for the benefit they are receiving. DWP will only receive very limited data and only on accounts matching criteria DWP prescribe that will be linked to eligibility criteria for benefits that, if met, may require further consideration to ensure a claim is correct through our business-as-usual processes.

DWP will only request information where there is a link between DWP, the data holder and the recipient of payment and where there is a signal of potential overpayment. Where there is no signal, no claimant information will be shared with DWP. This means the vast majority of claimants will be unaffected by this measure.

In the welfare system every payment DWP makes has eligibility criteria attached to it. For instance, in Pension Credit there are capital and income rules that determine entitlement and the under-declaration of capital was the largest source of overpayments in Pension Credit in 2022-23 accounting for over £4 in every £10 overpaid in Pension Credit in FYE 2023. £100m was also overpaid in the State Pension in FYE 2023. One reason for these overpayments was instances where the claimant lives in another country that does not have a Social Security agreement with the UK and are not entitled to the yearly increases made to the State Pension. This measure could be used to address overpayments related to eligibility on where a claimant lives.

We must be able to use this power across all payments to address fraud and error wherever it arises. Not doing so risks driving fraud and error to any benefits excluded. However, we have been clear that our initial focus is on using this power with benefits where we are seeing significant overpayments because of fraud and error – particularly Universal Credit.

The Government has a responsibility to ensure taxpayers’ money is spent responsibly. This measure will bring an estimated saving to the exchequer of up to £600m by 2028/29. The public support the government’s approach; in a recent public survey, 64% of respondents thought this measure was an acceptable way for DWP to tackle fraud and error in the welfare system.

The measure strikes the right balance between protecting the taxpayer, taking proportionate action, respecting the privacy of claimants and ensuring personal data is always protected.

Department for Work and Pensions