Obtaining income verification and the importance of bank statements
Income is likely to come from one of three sources:
If applicants declare no income, it is important that you ask them to explain how they support themselves.
For all applicants, including those declaring no income, you can get good information about income and outgoings from bank statements, so you should always ask the applicant to bring these. Most benefits and wages are paid into bank accounts. If an applicant claims to have no bank account you should decide if this is likely and reasonable and record on what basis you accepted the position. You may be satisfied from the information on a bank statement that the applicant is eligible for advice and assistance, but we list below evidence you may wish to see as an alternative to or in addition to a bank statement.
Required income verification for applicants in employment.
The latest wage slip is the best evidence, but you may also be satisfied by seeing, for example, a recent letter of appointment confirming the salary, other correspondence from an employer or a very recent P60. The applicant may have more than one type of income or capital – for example, wages and benefits – you should get verification of each type.
It is also possible to accept a bank statement showing the net pay received. However, it is important to remember that the only allowable deductions from pay in advice and assistance are tax and national insurance. Some employees may have other significant deductions made at source. For example those working in financial services may have their mortgage repayments deducted directly from their salaries by their employers. It is important, therefore, that if you intend to use a bank statement as evidence of earnings that you check with the client that there are no significant deductions from pay other than those allowed by regulation. When there are such deductions you should obtain additional documentary evidence such as the payslips.
Required income verification for self-employed applicants.
Business accounts, bank statements (personal and business) or recent audited accounts are helpful in evidencing income, but in the absence of these the onus is on the applicant to satisfy you about their income.
Required income verification for applicants in receipt of benefits.
Benefits are paid directly into bank or post office accounts, so bank statements are once again a good source of information and verification. Alternatively, you could ask for the most recent award letter or other correspondence from the Department for Work and Pensions (DWP).
We explain later in this guidance about the direct link we have with the DWP to check passported benefits.
When an applicant declares no income, you should still take steps to verify this. You should ask to see a bank statement in all cases to confirm there is no income or capital. If the applicant claims to have no such account, and you are satisfied, you should record this.
If the applicant is a young person and claims to be living with their parents you may either ask for confirmation of that from the parents or judge that the applicant’s age and circumstances make this likely to be true. For older applicants you should ask and record how they support themselves without any income, decide whether this is credible, and record the basis for your decision.
An introduction the DWP link used by SLAB in determining income related benefits being received by applicants
It is your responsibility to satisfy yourself that the applicant is financially eligible. However, we now have a direct link with the Department for Work and Pensions, which allows us to check cases where the client is receiving passport benefits – that is, income support, income-based jobseeker’s allowance, income-related employment and support allowance and Universal Credit. Where a client tells you they receive one of these benefits, we can confirm this through the link and tell you promptly of any information to the contrary in the DWP records. However, you must provide the client’s national insurance number and date of birth on the form to allow us to do this. You must also provide this information in respect of any spouse or partner to whom the benefit is paid, since we have to take into account the resources of spouses or partners.
If we cannot confirm through the link that the applicant is receiving the benefit, we will treat the application as though you had not yet verified the client’s income and will contact you and your client for further information.
Advice and Assistance financial verification
Read about our position in relation to cases where no documentary evidence of eligibility is immediately available for financial verification.