The UK Department for Work and Pensions (DWP) has published a new Code of Practice outlining how financial institutions will assist in verifying eligibility for welfare benefits. This framework is a key component of the government’s strategy to address fraud and error, which resulted in £9.6 billion in overpayments during the 2025/26 financial year.
Under the new Eligibility Verification Measure (EVM), banks may be tasked with identifying accounts that display specific indicators of ineligibility. This primarily concerns recipients of Universal Credit, Pension Credit, and Employment and Support Allowance. Potential indicators include savings exceeding the £16,000 threshold for Universal Credit or evidence that a claimant has resided abroad longer than permitted by benefit regulations.
The DWP has explicitly addressed data privacy concerns, stating that banks are strictly prohibited from disclosing transaction histories, spending patterns, financial statements, or ‘special category data’ such as religious beliefs, political views, or health records. The department clarified that it cannot request banks to search for specific individuals by name; instead, institutions will apply criteria to their systems and report only when an account aligns with a verification indicator.
The policy includes a ‘Test and Learn’ rollout phase, during which the DWP will work with a limited number of financial institutions to evaluate system accuracy and protective measures. Officials emphasized that the data received from banks will not trigger automatic decisions; any information must be cross-referenced with existing case files before the DWP determines if further investigation is necessary.