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DWP Bank‑Flag Powers Move Forward, With State Pension Excluded

Safeguards limit banks to eligibility indicators rather than transactions, with a pilot rollout planned from April 2026.

Overview

  • The Public Authorities (Fraud, Error and Recovery) Bill is now in the House of Lords, with report stage scheduled for October 15.
  • The State Pension is explicitly excluded from the new data‑matching powers and cannot be added later by regulation.
  • The Eligibility Verification Measure will require banks to match accounts against specified indicators and share limited data, not spending histories, with penalties for oversharing.
  • Any action affecting a claim will involve human review, and new recovery tools include direct deduction orders after at least three months of bank statements are obtained via account information notices.
  • The government cites projected savings of about £1.5bn over five years and estimates 50,000–100,000 overpayments identified annually, as civil‑liberties and pensioner groups voice privacy and fairness concerns.