DWP sets out new bank eligibility verification rules for benefit claimants

New bank verification rules explained

The Department for Work and Pensions has set out new regulations that will require banks and other financial institutions to identify accounts receiving Universal Credit, Pension Credit, and Employment and Support Allowance (ESA) as part of its Eligibility Verification Measure. The final Code of Practice governing the new powers has been released following consultation, according to a report from Birmingham Live.

Under the new system, the DWP will issue an Eligibility Verification Notice (EVN) for a bank or financial institution, outlining the eligibility indicators it wants accounts checked against. Banks will then use the information they already hold to identify accounts that match those criteria before supplying certain details to the DWP.

Crucially, the regulations do not grant the DWP access to people's bank accounts, nor do they permit officials to see where benefit claimants are spending their money. Financial institutions are specifically forbidden from providing transaction information in response to an EVN, meaning banks cannot send details revealing what someone has purchased or where they have spent their money.

The DWP is also prohibited from using an EVN to provide a bank with the personal details of individual claimants. Instead, the financial institution identifies accounts independently, using its own data. The Code requires that any information supplied by banks is transferred securely, with EVNs expected to be issued primarily in electronic form.

The new powers form part of the Public Authorities (Fraud, Error and Recovery) Act 2025, which received Royal Assent in December.

The DWP states that the measure is intended to detect potential incorrect payments, not to establish whether an individual is entitled to benefits. A match alone will not be sufficient for the DWP to conclude that someone has been overpaid; further checks are needed. The code acknowledges that an account being flagged does not automatically indicate that a benefit award is wrong or that payments will be suspended.

It also recognizes that someone could appear to hold savings above the normal capital limit while some of that money is legally disregarded when their benefit entitlement is calculated.

The legislation generally prohibits sharing special category data through the Eligibility Verification Measure, with limited exceptions, such as information needed to establish that someone receives a specified benefit. The DWP is also prohibited from sharing claimants' personal data with banks when issuing an EVN.

The DWP's aim is to detect potential incorrect payments rather than to establish entitlement on an individual basis, according to a report from Birmingham Live.

What the checks mean

Once an account is identified, specific information can be forwarded to the DWP to assist officials in establishing whether a benefit may have been incorrectly paid. The DWP will then use its existing processes to determine whether further action is necessary, which could include altering a benefit decision or halting payments, as stated by the Child Poverty Action Group (CPAG).

Pension Credit case reviews

Separately, the DWP has started contacting selected Pension Credit claimants as part of case reviews to check whether they are receiving the correct amount of financial support. People selected for a review may be asked to provide additional information, such as recent bank statements. The DWP has stressed that being selected does not mean the customer has done anything wrong.

The reviews could result in changes to the amount of Pension Credit some people receive if the information shows their current award needs to be adjusted. The DWP said it will explain the outcome and what happens next to anyone whose award needs to change, and has provided a dedicated telephone number (0800 731 0469) for claimants who need support. The DWP aims to treat claimants "fairly and sensitively" throughout the process, it said.

People selected for a review should follow the DWP's instructions and supply any additional information requested. Claimants should also report changes in their circumstances to the DWP, as these could affect how much they are entitled to receive.

Understanding Pension Credit

Pension Credit is a means-tested benefit that tops up weekly income to a minimum amount, with Guarantee Credit and possibly Savings Credit. As reported by the Daily Record, the top-up amounts are £238.00 a week for a single person and £363.25 for a couple.

Income that counts for Pension Credit includes State Pension, other pensions, earnings from employment or self-employment, and most social security benefits such as Carer's Allowance. Excluded income types include Adult Disability Payment, Attendance Allowance, the DWP Christmas Bonus, Child Benefit, Disability Living Allowance, Pension Age Disability Payment, Personal Independence Payment, social fund payments like Winter Fuel Allowance, Housing Benefit, and Council Tax Reduction.

For savings, if a potential tenant has £10,000 or less, this does not affect their benefit. Above that, every £500 over the limit counts as £1 of weekly income.