Sir Stephen Timms, chair of the work and pensions committee, warned that ministers had failed to make a convincing case for why certain social security payments should be covered by the rules.
He said: “Ministers should take new powers to intrude into the lives of citizens only when absolutely essential. What is being proposed is a step too far.
“With means tested benefits like Universal Credit, it is clear why ministers want such powers. But the Government has not made a convincing case for taking these powers for the state pension, Personal Independence Payment or child benefit. In fact, there appear to be no firm plans for using the powers at all.
“The Government has a chance to put things right as the legislation progresses through the Lords by dropping the unnecessary parts of these plans.”
Currently, the DWP only has the power to check someone’s bank account if they already suspect they could be committing fraud and claimants are responsible for reporting any changes in their financial circumstances, such as large cash payments, that disqualify them, for benefits.
The bill, which is currently being considered by the House of Lords, puts in place measures to flag suspicious activity to government and allow it to conduct checks on accounts, with the first raft of inspections due to start next year.
The Government has insisted that the legislation will not bring about surveillance powers and that no direct access to bank accounts or personal information will be shared by the DWP with third parties.
Earlier this month, the Information Commissioner, John Edwards, wrote to ministers voicing “concerns” that the proposed powers did not have “appropriate safeguards”.
“While I agree that the measure is a legitimate aim for government, given the level of fraud and overpayment cited, I have not yet seen sufficient evidence that the measure is proportionate,” he wrote.
While no overpayments of the state pension have been linked to fraud, £100m was overpaid in the state pension partly due to people claiming who live abroad and are not entitled to payment increases under the pensions triple lock.
Only those who live in the European Economic Area, Gibraltar, Switzerland and countries with a social security agreement with Britain can receive pension increases.
The DWP was approached for comment.
