Warning as government gains new powers to check bank accounts

Here's what you need to know

Under the new rules, The Department for Work and Pensions can compel banks and building societies to share benefits claimants' account details.

The department will also be able to recover money owed by people directly from their accounts without a court order.

After a following a consultation period and the codes of practice being laid before parliament, the new rules will come into force.

However, the DWP has failed to explain how it will keep public trust while using the “significant” powers, according to the Public Accounts Committee (PAC).

“It is essential that these extensive new powers - of compulsion of disclosure over banks and financial institutions, of recovering funds directly from people's accounts without the aid of the courts - have the risk of over-reach mitigated against right from the outset”, Sir Geoffrey Clifton-Brown, chair of the Public Accounts Committee said.

According to the PAC, the DWP should do more to stop overpayments from happening, and to make sure claimants get what they are owed.

Recently, it found that 26,000 people were incorrectly recorded as getting more carer's allowance than they were supposed to, while the DWP has now committed to correcting those cases.

“We have introduced major reforms to ensure people are paid the correct benefits, to recover overpayments and to help save billions of pounds for the taxpayer”, a DWP spokesperson said.

"The powers in the Fraud, Error and Recovery Act have numerous safeguards and will be independently overseen. We will not have access to claimants' bank accounts when checking they are receiving the correct benefits.”

“We are forecasting an ambitious reduction in fraud and error levels to 2.8% by 2028-29, the lowest level since tax credits were introduced in 2003-04”, it concluded.