The Department for Work and Pensions (DWP) has published new guidance explaining how banks and other financial institutions can be required to check accounts receiving certain benefits and disclose limited information that may indicate an incorrect payment.
The guidance, published on 13 October 2026, covers Universal Credit, Pension Credit and New Style Employment and Support Allowance (ESA). The checks operate through Eligibility Verification Notices issued under powers introduced by the Public Authorities (Fraud, Error and Recovery) Act 2025.
How the checks work
When a financial institution receives an Eligibility Verification Notice, it must check relevant account information against indicators provided by the DWP. These indicators relate to benefit eligibility rules. If an account meets an indicator, the institution can be required to provide specified information to the department.
The process can involve linked or joint accounts, including accounts belonging to people who do not themselves claim benefits. A match is a reason for further examination, not proof that a claimant has committed fraud.
What information can banks disclose?
According to the DWP guidance, permitted information can include account-holder names, account numbers and sort codes, details of linked and joint accounts, the amount held in relevant accounts, and dates of transactions made in another country.
The department says financial institutions cannot provide full bank statements or transaction histories, information showing how claimants spend their money, sensitive personal background information or specific transaction locations through this measure. The DWP cannot log into a claimant's online banking or view accounts in real time.
What happens if an account is flagged?
The DWP says staff will review information that suggests a possible incorrect benefit payment. Claimants may be asked to answer questions or supply further evidence. Decisions about benefit entitlement or payments are made by DWP staff rather than automatically by banks.
Claimants who disagree with a decision can seek mandatory reconsideration. The department also reminds claimants to report changes in savings, income, household circumstances and other matters relevant to their entitlement.
Privacy safeguards and oversight
The government says information gathered under the measure may be used only for checking entitlement, identifying incorrect payments and supporting related enquiries. An independent reviewer will examine compliance with the law, with reports presented to Parliament. A published code of practice governs the use of Eligibility Verification Notices.
The powers have prompted debate about the balance between tackling fraud and protecting financial privacy, particularly where linked accounts involve non-claimants. The government maintains that restrictions on data collection and independent oversight provide safeguards.
Is this a new law?
The legal powers were established under legislation passed in 2025, and a code of practice was published in May 2026. The development on 13 October is the publication of new public-facing guidance explaining the checks. That publication alone does not confirm that all banks have received notices or that every eligible account is already being checked.