DWP confirms the amount in bank accounts that could set off checks
DWP confirms the amount in bank accounts that could set off checks
The Department for Work and Pensions said it would start clawing back the benefit from anyone with between £6,000 and £16,000 in savings - and that bank account checks would be carried out
Individuals with more than £6,000 in their bank accounts have been cautioned that checks will be conducted on their accounts if they are receiving Universal Credit. The Department for Work and Pensions (DWP) will begin withdrawing the benefit from those with savings between £6,000 and £16,000.
To qualify for DWP benefits, claimants typically cannot have more than £16,000 in savings or investments. New checks will be implemented to prevent system abuse.
Liz Kendall, Secretary of State for Work and Pensions, previously said: "We are turning off the tap to criminals who cheat the system and steal law-abiding taxpayers' money.
"This means greater consequences for fraudsters who cheat and evade the system, including as a last resort in the most serious cases removing their driving licence.
"Backed up by new and important safeguards including reporting mechanisms and independent oversight to ensure the powers are used proportionately and safely."
Government rules for Universal Credit eligibility specify that claimants, whether single or living with a partner, must typically have no more than £16,000 in money, savings, and investments. If an individual has between £6,000 and £16,000, their Universal Credit payments will be reduced.
For individuals with savings exceeding £6,000, their payments will be incrementally reduced. For every £250 held between £6,000 and £16,000, payments will be cut by £4.35.
An additional £4.35 is deducted for any remaining sum that does not amount to a full £250.
This approach is based on the Department for Work and Pensions' (DWP) assumption that each £250 in a person's bank account can generate a monthly income of £4.35. Therefore, if someone has £6,500 in savings, £6,000 will be disregarded, and the remaining £500 will be considered as providing a monthly income of £8.70.
This sum is then subtracted from your monthly Universal Credit payment, according to Birmingham Live.
For those receiving Job Seekers Allowance or income-related ESA, £1 per week will be deducted from their benefits for every £250 (or part thereof) in savings above £6,000. The same rule applies to income support and housing benefit recipients.
These benefits are typically deposited into accounts fortnightly.
Recently the DWP provided an update on its intention to scrutinise the bank accounts of benefits claimants.
The Labour Party's Fraud, Error and Debt Bill is currently progressing through Parliament and is expected to be enacted later this year.
One of these new and contentious powers will allow the DWP to examine the bank accounts of those suspected of having more funds than they declare and to recoup benefit debts. Another provision would enable the department to suspend driving licences.
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The bill received its first reading in the House of Lords in May and an amendment to it was rejected.
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