DWP's Fraud, Error & Recovery Bill understates impact on poorest people

The Regulatory Policy Committee (RPC), an independent government watchdog, has criticised the Department for Work and Pensions (DWP) plans to deduct benefit overpayments directly from individuals' bank accounts. The Public Authorities (Fraud, Error & Recovery) Bill, introduced by DWP in January, will require banks to withdraw these funds in cases of fraud or error. A provision within the Bill will allow banks to charge "reasonable" administration costs, although these costs are yet to be specified.

The RPC argues that DWP's impact assessment of the Bill understates the potential impact on the poorest individuals. The committee also raised concerns about a lack of transparency regarding the bank charges that claimants will incur. Organisations like Citizens Advice have warned that these new powers will disproportionately affect the most vulnerable. 

In addition, the banking industry is concerned about powers in the Bill that could force them to disclose account information when incorrect benefit payments are suspected. 

In a statement contributing to the article, Jasleen Chaggar, legal and policy officer at Big Brother Watch, said: "We should not be giving the government powers to go behind our backs and pilfer through our bank accounts, especially when the purpose is not just to tackle serious fraud but to correct accounting errors.

"The chilling powers to secretly request three months of bank statements from a welfare recipient's bank to decide whether they can afford to have the funds removed are paternalistic and nothing short of dystopian. Decisions about whether to seize funds directly from bank accounts should be made by courts, not unaccountable officials in Whitehall."