Investigators will be able to directly take funds from people’s bank accounts
Investigators are set to receive sweeping new powers to tackle DWP benefit fraud. Fresh legislation is being introduced that will give officials new measures, including the power to directly withdraw money from a person’s bank account when they owe funds and refuse to repay.
In cases where officials attempt to recover money but cannot retrieve the amount, the debtor could face disqualification from driving. This could be enforced if the outstanding sum exceeds £1,000.
The power to directly remove funds from bank accounts is designed to help reclaim money from people who have exited the benefits system. Current regulations only permit the DWP to recover owed money through deductions from benefit payments or via PAYE earnings.
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Should officials want to make a direct deduction in this way, they must request a minimum of three months’ worth of bank statements to ensure the person has sufficient funds available. They will also provide advance warning to inform the person of their intention to seize the money, to give them a chance to dispute the deduction.
The sum can be taken as a single payment or through regular instalments. Rebecca Lamb, external relations manager at debt advice charity Money Wellness, said the new measures could be a big help in preventing fraud and incorrect payments within the benefits system.
She said: “We await the full implementation of the bill to better understand the full impact.” Addressing fears that the measures might inadvertently target innocent people, she said: “As with any new bill or policy, there’s an element of risk.
“But we’re confident, based on the language in the bill, that the Government understands those risks and will be cautious as it rolls out the policy. We hope to see that all cases are reviewed and assessed individually before any sanctions or further actions are taken, which should bring a level of comfort to anyone who’s worried.”
The bill stipulates the appointment of an independent individual to supervise the use of these powers. Their role will be to check that these powers are only used when necessary and that they are effective.
Ms Lamb said: “Any efforts to recover funds from people need to be reasonable and proportionate, making sure they still have enough to cover everyday living costs. The main focus should be on tackling organised criminal networks that are defrauding the system.”
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Bank account checks for three benefits
The legislation also introduces new powers allowing officials to access bank account information of those claiming certain benefits. These measures will be used to verify the eligibility of those receiving Universal Credit, Employment and Support Allowance and Pension Credit.
The law indicates that the scope of these checks could be extended to other benefits. Officials will contact banking providers to request details of bank accounts associated with the three benefits. Ministers have assured that the Department for Work and Pensions (DWP) will not have direct access to people’s bank accounts.
DWP fraud investigators will also get new powers to request information from any person associated with a person suspected of benefit fraud. Currently, the department is only permitted to request information from specific organisations on a limited list.
The DWP has confirmed that under the new powers, it will be able to request details from “any relevant third-party information holder”, unless the information is exempt.