The Department for Work and Pensions (DWP) has outlined the specific criteria under which it will use new powers to seize funds directly from benefit claimants’ bank accounts. The legislation, currently going through Parliament, will allow authorities to deduct money from accounts and request bank statements to confirm the claimant has sufficient funds.
How Will the DWP’s Direct Deduction Powers Work?
1. Investigation by the Public Sector Fraud Authority (PFSA)
- Before any deduction, the PFSA will conduct an investigation to determine whether money is owed due to fraud or error.
- A trained, authorised officer will make the final decision, following government counter-fraud standards.
2. Voluntary Repayment Opportunity
- If fraud or an overpayment is confirmed, the individual will be contacted for voluntary repayment.
- Only if voluntary efforts fail will direct deductions be used.
3. Advance Notice and Right to Appeal
- Claimants must receive a minimum of 28 days’ notice before any deduction.
- They will have the right to dispute the claim and appeal the decision.
- Funds can only be deducted after the appeals process has concluded or the deadline for appeals has expired.
4. Types of Direct Deductions
The DWP will use two types of deduction orders:
- Regular Deductions – Fixed amounts taken periodically.
- Lump Sum Deductions – A one-time deduction of a specific amount.
Both types of deductions can be applied simultaneously if necessary. Copies of these orders will be sent to the claimant, any joint account holders, and the bank.
Ensuring Fairness and Preventing Misuse
Cabinet Under Secretary Georgina Gould assured MPs that these powers would not be used arbitrarily, stating:
- “There are clear restrictions as to when these powers become available, ensuring that their use is not unfettered.”
- The goal is to recover funds from individuals who have the ability to pay but refuse to do so.
The bill also enables the civil courts to pursue alternative recovery actions, such as seizing property or overseas assets if bank deductions are not suitable.
Beyond the DWP: How Other Public Authorities May Use These Powers
The new law is not limited to benefit fraud cases. Other public bodies, including the NHS Counter Fraud Authority, will also use these powers to recover funds lost to fraud.
NHS Fraud Investigations and Recovery Efforts
- Alex Rothwell, Chief Executive of the NHS Counter Fraud Authority, stated that the bill would help recover more funds from suspected fraud cases.
- These powers could be used in cases where individuals have fraudulently taken £5,000 – £10,000 and either left their jobs or were dismissed through HR processes.
- The NHS expects to use these measures extensively to recover public money.
The DWP’s new direct deduction powers aim to combat benefit fraud and recover public funds more efficiently. While concerns remain about their impact, safeguards such as investigations, voluntary repayment options, and appeals processes have been built into the system to prevent misuse. Additionally, other public authorities, such as the NHS, will also benefit from these measures to tackle fraud more effectively.
FAQ (Frequently Asked Questions)
1. When can the DWP take money from a claimant’s bank account?
The DWP can only deduct funds if a claimant owes money due to fraud or an overpayment and fails to make voluntary repayments.
2. How much notice will claimants receive before deductions?
Claimants must be given at least 28 days’ notice before any deductions occur.
3. Can individuals challenge the decision?
Yes, claimants have the right to appeal before any deductions take place.
4. Will these powers be used only for benefit fraud cases?
No, other public authorities, such as the NHS Counter Fraud Authority, will also use them to recover fraud-related debts.
