By comparison, it is estimated that £23bn in benefits and financial support goes unclaimed each year.
The government previously announced a new Fraud, Error and Debt Bill, which introduced new legislation against fraud within the benefits system.
This included allowing the DWP to compel banks to hand over information about people’s finances if there is suspicion they are claiming benefits fraudulently.
It prompted alarm that the Labour government is echoing similar pledges made by the Conservative government to heighten the “surveillance” of benefits claimants.
Campaigners warned it risks “criminalising” innocent claimants in a bid to save the government money. Labour now faces similar backlash, with hints from Reeves that her party may go even further than the Conservatives in cracking down on fraud.
Ruth Talbot, founder of Single Parent Rights, said: “The government’s rhetoric on welfare reform is really concerning. The plans to give the DWP greater access to bank accounts is especially worrying. We only have to look at the Post Office scandal to know that there’s no guarantee that government departments always get it right.”
Rick Burgess, outreach and development lead at Greater Manchester Disabled People’s Panel, said: “Given disabled people’s experiences at the hands of the DWP, this is nightmare scenario. They are punitive, they make mistakes, then they cover up.”
The Big Issue has previously reported on mistakes made by the DWP, such as falsely accusing a disabled woman of owing the government £28,000. A single mother was also mistakenly told she owed the DWP £12,000, when actually they owed her money.
“Imagine a deduction from out of the blue causing you an overdraft fee,” Burgess added. “This risks spiralling destitution, all without due process and no respect to our privacy rights.
“It also raises the intensifying prejudice and animosity from politicians and media that puts people receiving DWP awards into a second class of citizen with fewer human rights than other citizens.”
More than half of universal credit claimants are already having money taken from their benefits to recover debts, including benefit overpayments. This can lead to “destitution” for some claimants, who are already struggling to afford the essentials.
In positive news for those in the anti-poverty sector, Reeves announced that the amount that could be deducted from a person’s universal credit will be capped at 15% instead of 25%. But there remain fears about the impacts these deductions have on benefits claimants, especially if the DWP has further powers to recover debts.
“What happens when inaccurate deductions are automatically taken?” Talbot asked. “We already see single parents disproportionately impacted by inaccurate debt repayment demands from the DWP and we are concerned they will face the brunt of these policy changes. This isn’t just an invasion of privacy but treating people – who have don’t nothing wrong – as criminals.”
Steve Jones, group secretary of Have Your Say Chesterfield community group, added: “Access to bank accounts is a total over reach in state and bank powers, violating privacy and human rights. Once they gain this state power, where will it stop?
“It must be strongly opposed and never supported, the plan is sinister and targets initially vulnerable groups of people who are severely struggling getting from one week to the next, people need support – not targeting.”
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