The Martin Lewis Money Show: Advice on pension credit application
Labour is being warned that a niche new law being debated tomorrow could blow up the scheme to get older people signed up for pension credit.
MPs will debate the Public Authorities (Fraud, Error and Recovery Bill) in Parliament this afternoon, which aims to reduce fraud against government departments.
However it includes radical new snooping powers, which will force banks and building societies to trawl through customers’ accounts in search of those abusing benefits.
Silver Voices, which describes the powers as “Orwellian”, is now warning that the legislation will “put a nail in the coffin” of the Government’s campaign to get older voters signed up for pension credit after Rachel Reeves slashed Winter Fuel Allowance.
With the threshold for Pension Credit at a very low £11,365, the campaigning organisation argues those looking at signing up for the benefit scheme will be scared off out of fear they could be caught temporarily going over the threshold.
READ MORE: Labour's winter fuel betrayal fails as pensioners find key loophole
Dennis Reed, Silver Voices’ director, warns that the Bill is a “sledgehammer to crack a nut”, and will plunge more pensioners into poverty.
He told the Daily Express: “No-one condones intentional benefit fraud but to trawl every bank account in the country for possible benefit irregularities is a recipe for disaster.”
“These Orwellian powers will dissuade many poor pensioners from applying for pension credit at all, plunging them further into poverty.
“They will be worried that small ex gratia payments from relatives, perhaps in recognition of a grandparent’s caring duties, or a cost of living donation from a charity, will lead to a red flag on their account and accusations of criminality.
“These powers could also be applied in the future to all state pension recipients, by regulation and without full parliamentary approval.
“Labour must step back from such totalitarian measures.”
He also warns that the Bill’s inclusion of provisions to strip “benefit cheats” of their driving licences will “terrify pension credit claimants who may depend on their cars to get around”.
The campaign group Big Brother Watch, which is coordinating a campaign against the bank spying bill, will be presenting a petition to Downing Street tomorrow morning with over 220,000 signatures opposing the new legislation.
Big Brother Watch’s director Silkie Carlo said: “These extreme powers are not only about fraud but about correcting the government’s own frequent payment errors”.
“We must be extremely cautious about the government creating a second tier justice system reserved for people who rely on welfare that side-steps fair hearings in courts to take away people’s funds and freedoms.”
A spokesman for the Department for Work and Pensions insisted they are committed to supporting pensioners with Pension Credit.
They added: “New measures will ensure that welfare spending goes to those who really need it, not those who seek to exploit it – saving the taxpayer £1.5 billion over the next five years.”