The DWP has confirmed it will be able to target people who have more than £6,000 in savings if they are on certain benefits in order to cut their benefit payments – as they’ll no longer be eligible to get Universal Credit in full.
The Department for Work and Pensions has issued more detail on its plans to clamp down on ‘incorrectly paid’ benefits in a new law, the Public Authorities (Fraud, Error and Recovery) Bill. It has clarified what it calls its ‘Eligibility Verification Powers’ under the new law and the key benefits it will target. The DWP says the changes will focus on Universal Credit, Pension Credit and Employment and Support Allowance because these are the benefits “where incorrect payments are currently highest”.
Universal Credit is a catch-all benefit which is slowly replacing a host of other benefits including Tax Credits, and also encompasses various benefits for families as well as low income support.
But Universal Credit cannot be claimed, in most circumstances, if a claimant has £16,000 or more in their bank account in savings. And those who have more than £6,000 will see their benefit payments reduced.
The DWP says about this rule: “When we assess your entitlement to Universal Credit, we take into account as ‘capital’ the value of all money, savings and investments you own, or you jointly own with someone else.”
The DWP says this includes cash, money in your bank account, digital accounts like Paypal, savings accounts, savings for children in your name, savings for medical care, ISAs, Premium Bonds, crypto assets, property, land and savings abroad, inheritance payments, money in trust funds and unspent benefits.
If you live with your partner, the DWP looks at all of the above combined for both of you. The only thing not counted is personal possessions, life insurance, bereavement support payments, funds from selling your home and money for tax payments if you’re self employed. Also, children’s savings in their name does not count.
The DWP will start to reduce your eligibility for Universal Credit at just £6,000 of savings, with all the benefit removed at £16,000.
It says: “To claim Universal Credit you must usually have no more than £16,000 in money, savings and investments as a single claimant or if you are living with a partner. If you have below £6,000 it will not affect your award.
“If you have money, savings and investments between £6,000 and £16,000 your Universal Credit payments will be reduced.
“Your payments will be reduced by £4.35 for every £250 you have between £6,000 and £16,000.”
And in the new powers for the DWP, it will be able to check bank accounts of those on benefits.
The DWP said about its new powers to check bank accounts of those on benefits: “This new measure in this Bill will give DWP the power to require banks and other financial institutions to provide information to help verify a claimant’s entitlement to benefits and identify incorrect payments.
“Banks and other financial institutions will be required to look at the data they hold on accounts in receipt of a specified DWP benefit payment and match these accounts to specific eligibility indicators determined by DWP (and defined within an Eligibility Verification Notice) and highlight where the criteria have been met.
“This power can only be used to obtain information on accounts that receive a specified DWP benefit, and any accounts linked to that benefit receiving account if they match the eligibility indicators set by DWP.
“The eligibility indicators in the notice are the specific criteria that banks and other financial institutions will be asked to check relevant accounts against. They will be based on the eligibility rules for the specified benefits. For example, in Universal Credit, an individual cannot hold more than £16,000 in savings and remain eligible for Universal Credit, unless this capital is a result of a specified exception.
“Any accounts identified will be considered by DWP for further inquiry, if necessary. No decisions about benefit entitlement will be made on this information alone.”
