DWP’s New Rules: They Can Now Access Your Bank Account and Charge You £300

The Department for Work and Pensions (DWP) has announced new anti-fraud powers that will allow it to confiscate assets, impose £300 fines, and directly recover funds from claimants’ bank accounts. These measures are part of the government’s broader initiative to combat benefit fraud and improve debt recovery.

How Will the New Anti-Fraud Powers Work?

• Scrutiny of bank accounts to detect fraudulent activity.
• Direct deduction orders to recover owed funds from bank accounts.
• £300 civil penalties for individuals who fail to repay fraud-related debts.
• Seizure of assets in cases where funds cannot be recovered from bank accounts.

Why Are These Measures Being Introduced?

According to Cabinet Under Secretary Georgia Gould, the government is taking stronger action on benefit fraud due to the low recovery rate of fraudulent payments.

• In 2021-22, fraud and error outside of tax and welfare amounted to £823 million.
• Only £190 million (23%) of this was recovered.
• The NHS Counter Fraud Authority reported that only 12% of fraud-related debt was recovered.

The Public Accounts Committee, Home Affairs Committee, and National Audit Office have urged the government to strengthen fraud recovery efforts, leading to these new powers.

How Will Debt Recovery Work?

1. Civil Penalties and Direct Deductions

• A £300 fine will be imposed on those who fail to repay debts voluntarily.
• The DWP will use direct deduction orders to recover funds directly from bank accounts.
• Recovery efforts will only target individuals and companies with the ability to repay.

2. Safeguards and Appeals Process

• Affected individuals can:
  • Make representations before deductions begin.
  • Apply to modify deduction orders.
  • Request an internal review.
  • Appeal to a tribunal if they believe the decision is unfair.
• Trained, authorised officers will oversee the process, and independent oversight will be in place.

3. Alternative Debt Recovery Actions

• If bank deductions are not effective, the government can:
  • Seize other assets such as property.
  • Pursue legal action through civil courts.
  • Target overseas assets if claimants have transferred money abroad.

Balancing Debt Recovery and Fairness

Gould emphasized that the new measures aim to strike a balance between recovering public funds efficiently and ensuring that the process remains fair and proportionate. The government has consulted banks, charities, and civil liberty groups to incorporate best practices into the system.

The DWP’s tougher fraud recovery measures will give the government greater powers to reclaim lost funds through bank deductions, asset seizures, and civil penalties. While these steps aim to reduce benefit fraud, strong safeguards and an appeals process will be in place to protect vulnerable individuals.

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FAQ (Frequently Asked Questions)

1. What new powers does the DWP have to recover fraud-related debt?

The DWP can now seize assets, deduct funds directly from bank accounts, and impose £300 fines on claimants who fail to repay debts.

2. Will everyone on benefits be affected by these changes?

No, these powers will only apply to individuals or companies who have the means to repay but refuse to do so.

3. Can claimants appeal if money is deducted from their bank account?

Yes, affected individuals can apply for a review, request modifications, or appeal to a tribunal.

4. What happens if someone has assets overseas?

If an individual has significant assets abroad, the government can pursue legal action to recover funds.

5. Will the DWP consult with external organisations before taking action?

Yes, the government has engaged banks, charities, and civil liberty groups to ensure the process is fair and effective.