The Department for Work and Pensions (DWP) has confirmed that from October 2026, it will start taking owed benefit money directly from joint bank accounts, as part of a major crackdown on fraud and debt.
Under the Public Authorities (Fraud, Error and Recovery) Act 2025, the DWP can now recover debts directly from a person's bank account without needing a court order. In the most serious cases, it can also ask a court to strip persistent dodgers of their driving licence.
Joint accounts targeted
In documents released by the DWP into the Code of Practice, it has explained when it will target a joint account. It said it would assume that people who hold the account have half the funds each when it comes to removing the money.
"DWP will only apply a DDO (Direct Deduction Order) to joint accounts where it is not reasonably possible to recover from a sole account, unless the debt is a joint debt and both account holders are liable for the debt," the documents state.
Each account holder will be notified separately of the intention to recover directly from the account and invited to make representations. No recovery action, other than safeguarding funds for a Lump Sum Direct Deduction Order (LSDDO), will start until all parties have been notified and given the opportunity to make representations.
Equal shares presumption
The DWP will presume that joint account holders each have an equal share of the funds, in accordance with the Act, unless there is reason to believe otherwise. DWP can only deduct from the individual's share of any money held in an account.
If an account holder considers the liable person does not have any beneficial interest in the money held in a joint account, or the money is not held in equal shares, an explanation should be provided to DWP by the individual and/or the other account holders. They may be required to provide evidence to support this.
Government savings target
The government aims to make savings of £14.6 billion over the next five years from fraud, error and debt activity in what it calls the 'biggest crackdown on welfare debt in a generation'.
Work and Pensions Minister for Transformation Andrew Western said: "Hardworking taxpayers deserve a system that pursues those who deliberately dodge their debts, and that is exactly what these new powers deliver."
He added: "To anyone with an outstanding debt - our door is open and DWP will always work with you to find an affordable way to repay. But for those who can pay and won’t - we’re going further than ever before to claw back cash and crack down on fraud."
Enforcement details
Enforcement of the powers will be gradually rolled out from October 2026. The DWP said that anyone who is no longer in receipt of benefit, who owes money to DWP and receives the new letter 'should act now' to avoid enforcement action.
"Previously, the DWP had few options to pursue people who were no longer claiming benefits or in PAYE employment, meaning some who could afford to repay were simply choosing not to. That loophole is now closed," the DWP said.
Courts can only impose a driving ban where the debt is at least £1,000, and no one can be disqualified if they have an essential need for their licence, for example work that relies on driving, such as a courier or caring responsibilities. Any ban is initially suspended as long as repayment terms are kept to.
