The UK government is stepping up its efforts to clamp down on benefit fraud, with the Department for Work and Pensions (DWP) gaining new powers to access claimants’ bank accounts, recover funds directly, and impose civil penalties of up to £300.
This move is part of a broader anti-fraud strategy aimed at recovering millions in public money lost to fraudulent claims. The DWP says the new legislation will allow trained and authorized officers to take direct action against those who refuse to repay fraud-related debts—provided they have the means to do so.
Civil Penalties and Direct Deductions
Under the proposed measures, the DWP will now be able to issue civil penalties of £300 through deduction orders—essentially seizing money straight from a person’s bank account if they have deliberately avoided repayment. However, officials stress that these powers will only be used as a last resort after attempts to reach voluntary agreements have failed.
Cabinet Under Secretary Georgia Gould explained the rationale to MPs, citing the government’s difficulty in recovering money lost to fraud and error outside the tax and welfare system. “In 2021-22, £823 million was identified as fraud and error, yet only £190 million—just 23%—was recovered,” she said. “The NHS Counter Fraud Authority reported an even lower figure, with only 12% recovered.”
Strengthening Public Sector Recovery
Gould highlighted that currently, only a limited number of government bodies have the legal authority to recover debts, meaning many fraudulent claimants slip through the cracks. The new legislation aims to change that by bringing debt recovery powers into the Public Sector Fraud Authority (PSFA), expanding the government’s ability to act across different departments.
She added, “We’ve consulted widely with banks, civil liberty organizations, charities, and public sector bodies to design a system that balances efficiency with fairness. These powers will only apply to those who can repay but refuse.”
Fair Process with Safeguards in Place
Individuals targeted by these powers will still be allowed to challenge or appeal the decision. They can make representations, request variations, apply for internal reviews, and even appeal to a tribunal. Trained officers overseeing the process will operate under strict guidelines and independent oversight to prevent misuse.
Gould emphasized that the measures are designed to be proportionate. “This isn’t about targeting those in financial hardship. It’s about holding to account those who intentionally withhold repayment despite having the ability to pay,” she said.
Beyond Bank Accounts
In cases where bank accounts or PAYE deductions aren’t viable—for instance, if a person holds property assets or stores funds abroad—the DWP will be able to pursue civil action through the courts. Gould stated that the department aims to ensure no unfair advantage is given to those who hide their wealth.
“This legislation allows us to recover fraud debt wherever it sits—whether in UK banks, in properties, or overseas,” she said. “We are committed to recovering public money while protecting vulnerable individuals.”
The Bigger Picture
The new powers come in response to criticism from parliamentary bodies such as the Public Accounts Committee, Home Affairs Committee, and the National Audit Office, all of which have urged the government to take a firmer stance on fraud losses.
While some privacy advocates and civil liberty groups have raised concerns about the DWP’s growing access to personal financial information, the department insists strong safeguards will prevent misuse and ensure the system is used responsibly.
For now, the message is clear: those who abuse the benefits system and refuse to repay what they owe can expect tougher consequences—and soon, their bank accounts may be directly in the government’s sights.
FAQs: DWP’s New Anti-Fraud Powers Explained
Q1: What exactly are the new powers being given to the DWP?
A: The DWP will now have the authority to access and monitor claimants’ bank accounts, issue civil fines of £300, and directly recover funds from those who have committed benefit fraud. These actions will be taken only after efforts to secure voluntary repayments have failed.
Q2: Who will be affected by these changes?
A: Only individuals or companies who have committed fraud, have the financial means to repay, but deliberately avoid doing so will be affected. Vulnerable people or those in genuine hardship are not the targets of this crackdown.
Q3: Can the DWP really take money directly from my bank account?
A: Yes, under the new powers, the DWP can issue a deduction order to retrieve money directly from your account, but only if you have ignored attempts to arrange repayment and are financially capable of settling the debt.
Q4: What happens before the DWP takes money from my account?
A: Before any deduction occurs, the DWP will attempt to contact you to arrange a voluntary repayment. If this fails and you still have the means to repay, a deduction order may be issued. You’ll be informed and given the opportunity to respond.
Q5: Do I have any rights if I think the DWP’s action is unfair?
A: Yes. Affected individuals can:
- Make formal representations
- Apply to vary the deduction order
- Request an internal review
- Appeal the decision to a tribunal
Q6: Will these powers be used in all fraud cases?
A: No. These powers are designed for specific cases where fraud has been identified, and recovery through voluntary means has failed. They are not blanket powers and will be used in a targeted and proportionate manner.
Q7: How will the DWP ensure these powers are not abused?
A: Only trained and authorised officers will be allowed to use these powers. All actions will be subject to independent oversight to maintain fairness, accountability, and transparency.
Q8: Can the DWP go after property or money held abroad?
A: Yes. If a person has significant assets beyond bank accounts—such as property or offshore funds—the DWP can seek recovery through civil court action under clause 16 of the new Bill.
Q9: Why is the government doing this now?
A: In recent years, billions have been lost to fraud and error in the benefits system. Parliamentary bodies and watchdogs have called for stronger recovery measures. These new powers aim to protect public money and deter future fraud.
