Fears mount over Labour accessing bank details and taking money from YOUR accounts

Under the new rules, DWP agents can compel banks and financial institutions to provide information about customers who are receiving or applying for benefits.

The powers also allow the department to recover funds it believes are owed by making direct deductions from individuals' earnings or bank accounts.

Financial institutions may receive penalty notices if they fail to comply with official requests for information.

The central mechanism enabling the powers is the Eligibility Verification Measure, which requires banks to respond when served with an Eligibility Verification Notice.

When a notice is issued, banks must supply details about an account holder including their name and date of birth.

Officials may also request sort codes, account numbers and information showing whether the account meets benefit eligibility criteria.

The DWP has said banks should not provide transaction histories under these arrangements.

Ministers say the powers are intended to determine whether individuals qualify for benefits based on their financial circumstances.

As an example, those holding savings over £16,000 are usually ineligible for Universal Credit except in specific cases.

The legislation further grants the DWP authority to extract funds directly from wages or bank accounts through Direct Deduction Orders.

Minister of state Baroness Maeve Sherlock said earlier this year that officials expect to issue between 5,000 and 20,000 such orders annually.

The implementation will take place gradually over twelve months with the department initially working with a small number of banking partners.

The phased rollout is intended to test and refine the system before it is applied more widely across the financial sector.

The new powers mark a major expansion of the state's ability to recover debts owed by benefit claimants without requiring court involvement.

The Government has described the measures as the foundation of what Labour calls the most significant fraud crackdown in a generation.

Ministers estimate the initiatives will generate savings of £1.5billion by the end of the decade.

Andrew Western, minister for transformation, defended the reforms and said they were necessary to counter emerging risks to public funds.

Mr Western said: "It is right that as fraud against the public sector evolves, the Government has a robust and resolute response."

He added: "The powers granted through the Bill will allow us to better identify, prevent and deter fraud and error, and enable the better recovery of debt owed to the taxpayer".

Mr Western said: "A benefits system people can trust is essential for claimants and taxpayers alike through this Bill that's exactly what we'll deliver".

Privacy advocates and disability rights groups have criticised the legislation and warned of its consequences for vulnerable people.

Big Brother Watch has said the powers risk creating an unprecedented system of financial surveillance.

Campaigners have raised concerns about the impact on claimants who rely on social security.

Mikey Erhardt, policy lead at Disability Rights UK, warned the bill "poses a serious risk to disabled and marginalised people".

Mr Erhardt told The Independent: "The problems with this bill go far beyond the reach of any new technology they stem from how those in Westminster view our social security system".

He added: "Instead of seeing it as an essential public service a piece of social infrastructure that ensures we all have access to the right support when needed - they see numbers on a spreadsheet, not actual human lives."

The DWP have been contacted for comment.