From October, the DWP will use powers under the Public Authorities (Fraud, Error and Recovery) Act 2025 to recover benefit debts directly from bank accounts of people refusing to repay, without needing a court order.
The government will begin wielding brand new powers that enable the Department for Work and Pensions ( DWP ) to seize money straight from bank accounts next week. The fresh powers give DWP officials the authority to recover cash from people who refuse to settle benefit debts.
The powers were formally granted after new legislation took effect earlier this year, but the DWP said officials won’t start deploying them until October. The new measure forms part of a major fraud crackdown unveiled under Sir Keir Starmer’s leadership, which targets savings of up to £14.6 billion over the next five years, reports the Manchester Evening News.
Following the law change at the end of June, the DWP started dispatching letters to debtors urging them to make contact and settle outstanding amounts. Those owing money were given several weeks to pay before enforcement begins.
Now, anyone who hasn’t cleared their debt by the end of September could find the new powers deployed against them from October onwards.
Under the Public Authorities (Fraud, Error and Recovery) Act 2025 (PAFER), the DWP is permitted to grab cash directly from people’s bank accounts without requiring a court order.
The DWP could also revoke people’s driving licences in the most serious cases. If welfare debt exceeds £1,000 and there’s no employment-related need for a vehicle, someone’s driving licence could be withdrawn via a court order.
When the legislation was passed, Minister for Transformation Andrew Western MP stated: “It is right that as fraud against the public sector evolves, the government has a robust and resolute response.
“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. A benefits system people can trust is essential for claimants and taxpayers alike – through this Bill that’s exactly what we’ll deliver.”
The government described the “modern fraud prevention powers” granted under the bill as matching “match the sophistication of today’s threats”, which are costing the taxpayer around £10 billion annually. The DWP confirmed that staff will be trained to the highest standards on the appropriate use of the new powers.
Cabinet Office Minister Josh Simons declared: “Previous governments have sat back and accepted that fraud is inevitable. We will not. We are transforming the state’s defences against those who seek to defraud the taxpayer and restoring fairness.
“This new law gives the Public Sector Fraud Authority and government departments the powers and tools to proactively pursue and recover billions of pounds lost to criminals and error. We are ensuring there is no hiding place for those who cheated the taxpayer during the pandemic, doubling the time limit for bringing a civil claim to twelve years.”