The Department for Work and Pensions (DWP) has enacted sweeping new powers to combat benefit fraud, with measures coming into force that allow it to directly deduct money from individuals' bank accounts. The legislation, confirmed on 2 December 2025, marks a significant escalation in the government's ability to recover funds from those it deems to have claimed payments wrongfully or who owe debts.
Direct Deductions and Driving Licence Suspensions
The new laws grant the DWP the authority to take funds directly from the bank accounts of benefit cheats, fraudsters, and debtors who can afford to repay but refuse. This power is intended for cases where a person has left the benefits system but continues to owe money, ignoring repeated requests for repayment. Previously, the DWP could only recover money by deducting from ongoing benefit awards or through the PAYE system on earnings.
In a further stringent measure, if the DWP has tried and failed to recover a debt of £1,000 or more, officials now have the power to suspend the individual's driving licence. Before any direct deduction from an account, the DWP must give the person notice and examine at least three months of bank statements to ensure sufficient funds are available.
Eligibility Checks on Millions of Accounts
A major pillar of the new regime involves mass eligibility verification. The DWP will now contact banks and building societies to request account details linked to claimants of specific benefits. This data will be used to check whether individuals are entitled to the payments they receive.
Initially, this scrutiny will focus on claimants of Universal Credit, Pension Credit, and Employment and Support Allowance. The legislation allows for this list to be expanded to other benefits in the future. An independent overseer will be appointed to monitor the use of these powers, ensuring they are both effective and used appropriately.
Expanded Investigative Powers
The bill also broadens the DWP's investigative reach in suspected fraud cases. Previously, officials could only request information from a restricted list of sources. Under the expanded powers, they can now request details from any third party believed to be connected with a suspect.
Minister for Transformation, Andrew Western, defended the robust measures, stating: "It is right that as fraud against the public sector evolves, the Government has a robust and resolute response... The powers granted through the bill will allow us to better identify, prevent and deter fraud and error, and enable the better recovery of debt owed to the taxpayer." He emphasised that a trustworthy benefits system is essential for both claimants and taxpayers.
