Changes to benefits rules could see Department for Work and Pensions officials checking people’s bank accounts each month to make sure they are not fraudulently claiming their payments.

The new system would involve officials checking bank statements to make sure claimants are not being dishonest about their savings, which could affect their entitlement.

Chancellor Jeremy Hunt is set to announce the new rules later this week in his Autumn Statement, with the Government predicting it save the Treasury £500million in the first five years.

A source told The Telegraph: “Every pound stolen by fraudsters could be spent on our public services or on those most in need.”

The DWP recently announced fraud officials would be reviewing benefit and state pension claims next year to check for any issues such as falsifying documents or faking an illness or injury.

Fraud and error rates fell 3.6 percent over the past year, with some £8.3billion in fraudulent payments, down from four percent the year before, at £8.7billion.

The state pension reviews will include claims administered through the ‘Get Your State Pension online’ service during this financial year.

The new operation will see Disability Living Allowance cases reviewed for the first time since the 2004/2005 financial year.

Officials will be looking at claims for the following benefits to check for fraud and error:

• Universal Credit
• Housing Benefit (pension age cases)
• Pension Credit
• State Pension
• Personal Independence Payment (PIP)
• Disability Living Allowance (DLA).

Definitions of Fraud, Claimant Error and Official Error

Officials will look for three types of fraud and error, including:

1. Fraud

This includes claims where all three of the following conditions apply:

• The conditions for receipt of benefit, or the rate of benefit in payment, are not being met
• The claimant can reasonably be expected to be aware of the effect on their entitlement
• Benefit payment stops or reduces as a result of the review.

2. Claimant Error

• The claimant has provided inaccurate or incomplete information or failed to report a change in their circumstances, but there is no evidence of fraudulent intent on the claimant’s part.

3. Official Error

• The benefit has been paid incorrectly due to a failure to act, a delay or a mistaken assessment by the DWP, a local authority or HM Revenue and Customs (HMRC), to which no one outside of that department has materially contributed, regardless of whether the business unit has processed the information.

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