The Department for Work and Pensions (DWP) has introduced tough new powers to recover debts from former claimants who have stopped receiving benefits but still owe money. Starting this week, letters will be sent to debtors warning them to pay up or face consequences including direct bank account deductions and, in serious cases, driving licence suspension.
New Powers to Claw Back Cash
Under the new rules, the DWP can now recover debts directly from bank accounts without a court order. For debts over £1,000, the department can ask a court to impose a driving ban on individuals who do not have an essential need for their licence, such as working as a courier. The ban will be suspended if repayment terms are met.
Work and Pensions Minister for Transformation Andrew Western stated: “Hardworking taxpayers deserve a system that pursues those who deliberately dodge their debts, and that is exactly what these new powers deliver. 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.”
Gradual Rollout from October
The full scope of these powers will be gradually rolled out from October, giving debtors four months to pay or arrange an affordable repayment plan. Letters sent this week urge recipients to contact the DWP as soon as possible to avoid the full force of the new measures. The DWP also offers signposting to free debt support services.
Previously, when claimants stopped receiving benefits, it became harder for the DWP to recover debts that were typically deducted from ongoing payments. The new powers aim to close this loophole.
Government Commitment to Curb Fraud
Cabinet Office Minister Satvir Kaur commented: “Fraud against the public sector and unrecovered debt deny our vital frontline services of the funding they deserve. Under these new powers in the PAFER Act, this Government will deliver on its promise to protect hardworking taxpayers and clamp down on those who try to cheat the system.”
The DWP stresses that staff are available to help debtors find affordable repayment options, and that the new powers target those who refuse to pay rather than those who engage with the department.
