The Department for Work and Pensions (DWP) will gain the power to take money directly from the bank accounts of individuals who refuse to pay benefit debts, under a new law effective from October. This measure is part of a broader welfare crackdown aimed at tackling benefit fraud, with the government expecting to save up to £14.6bn over the next five years.
New Powers Under the PAFER Act
The Public Authorities (Fraud, Error and Recovery) Act 2025 grants the DWP authority to seize cash from bank accounts without a court order. In cases where welfare debt exceeds £1,000 and there is no essential need for a car, the DWP can also seek a court order to revoke a person's driving licence. Any ban would initially be suspended as long as repayment terms are met.
Since the changes were announced at the end of June, the DWP has sent letters to debtors, urging them to contact the department and settle their debts.
Future Measures and Welfare Spending
Additional powers under the Act, to be implemented later, include the Eligibility Verification Measure, which will allow the DWP to require limited data from banks and financial institutions to identify incorrect benefit payments and resolve errors sooner.
The government spent £333bn on welfare in 2025/26, with over half (£177bn) on pensions, including £146bn for the state pension. Welfare spending is projected to rise to £400bn by the end of the decade.
Government Response and Ministerial Comment
Ministers had attempted to address rising costs through reforms to working age benefits, but faced a backbench Labour rebellion last summer over concerns about the impact on disabled people.
Liz Kendall, Work and Pensions Secretary at the time of the announcement, said: "We are turning off the tap to criminals who cheat the system and steal law-abiding taxpayers' money." She added: "This means greater consequences for fraudsters who cheat and evade the system, including as a last resort in the most serious cases removing their driving licence. People need to have confidence the Government is opening all available doors to tackle fraud and eliminate waste."
While money owed can already be reclaimed through the benefits system or PAYE, these new measures from October represent a significant escalation in the DWP's enforcement powers.
