DWP warning issued over new powers | Personal | European Markets

New DWP powers that can allow officers to take money instantly from the accounts of benefit claimants suspected of fraud might go away people struggling to make ends meet. Laws is coming in to sort out benefit fraud, empowering investigators to request bank statements and to instantly get better funds from a particular person’s bank account the place money is owed.

Critics of the measures concern people could possibly be wrongly focused and will power people into dire financial conditions the place they battle to get by. Sebrina McCullough, director of exterior relations at debt and benefit counselling service Cash Wellness, mentioned: “It is vital that before any agreements to recover money directly from bank accounts are made, affordability checks are completed.

“The small print of a particular person’s account and what’s on bank statements may not at all times be a true reflection of their financial scenario.”

Under the measures, officials will have to request at least three months of bank statements to check the person has the funds befor they are deducted from their account, although they can request statements over a longer period.

Ms McCullough said: “We’d encourage the Authorities to first refer these people to free debt advice providers, which might work with people to ascertain their full financial scenario after which help them with a sustainable and workable compensation plan. In any other case, we risk forcing weak low-income households into disaster.”

The expert also said it’s important that the wider context around benefit fraud is considered, with overpayments due to fraud accounting for just 2.8% of welfare spending, with a total of £7.4billion.

This compares with £1.6billion in overpayments due to mistakes from claimants and a further £0.8billion going out due to other errors. Meanwhile, some £20billion in benefits reportedly goes unclaimed because people are not claiming what they could.

Ms McCullough urged: “It’s paramount that the Authorities distinguish ‘intentional fraud’, the place, for instance, large-scale fraud dedicated by legal gangs are exploiting weak people, from real errors made by people making an attempt to navigate an outdated, overly complicated system.

“Any legislation must consider how to prevent fraud, as well as how to use the data available to proactively engage people who should be claiming but clearly do not know they are entitled to additional benefits. The system must be simplified and streamlined.”

One other knowledgeable nervous in regards to the powers being misused is Ben Fleming, financial crime analyst at Ocean Finance. He warned: “Mistakes in benefit assessments are not uncommon, and there’s a risk that innocent people might be unfairly scrutinised or penalised.

“If these checks are utilized inconsistently or with out clear oversight, it might result in a disproportionate influence on weak teams who’re already struggling.”

He warned that disability benefit claimants could be a particular target under the new measures. Mr Fleming explained: “Incapacity advantages like Private Independence Fee (PIP) and Employment and Help Allowance (ESA) might additionally see heightened checks, as these usually depend on subjective assessments that may be manipulated.

“Housing Benefit and Council Tax Reduction schemes might also be targeted due to the financial strain they place on local authorities. These benefits often involve third-party data like rental agreements, making them susceptible to misreporting.”