The Department for Work and Pensions (DWP) will begin using new powers next week that allow officials to seize money directly from bank accounts to recover benefit debts. The powers apply to people who refuse to settle outstanding amounts.
New powers take effect from October
The powers were formally granted after legislation took effect earlier this year, but the DWP said officials will not start deploying them until October. The measure forms part of a fraud crackdown introduced under Sir Keir Starmer's leadership, which targets savings of up to £14.6 billion over the next five years.
Following the law change at the end of June, the DWP began sending letters to debtors urging them to make contact and settle outstanding amounts. Those owing money were given several weeks to pay before enforcement begins. Anyone who has not cleared their debt by the end of September could face the new powers from October onwards.
What the PAFER Act allows
Under the Public Authorities (Fraud, Error and Recovery) Act 2025 (PAFER), the DWP is permitted to take cash directly from people's bank accounts without requiring a court order. In the most serious cases, the DWP could also revoke people's driving licences. If welfare debt exceeds £1,000 and there is no employment-related need for a vehicle, a driving licence could be withdrawn via a court order.
When the legislation was passed, Minister for Transformation Andrew Western MP stated: "It is right that as fraud against the public sector evolves, the government has a robust and resolute response."
The government described the "modern fraud prevention powers" granted under the bill as matching "the sophistication of today's threats", which are costing the taxpayer around £10 billion annually. The DWP confirmed that staff will be trained to the highest standards on the appropriate use of the new powers.
Government response to fraud
Cabinet Office Minister Josh Simons declared: "Previous governments have sat back and accepted that fraud is inevitable. We will not. We are transforming the state's defences against those who seek to defraud the taxpayer and restoring fairness."
He added: "This new law gives the Public Sector Fraud Authority and government departments the powers and tools to proactively pursue and recover billions of pounds lost to criminals and error. We are ensuring there is no hiding place for those who cheated the taxpayer during the pandemic, doubling the time limit for bringing a civil claim to twelve years."
