The Department for Work and Pensions (DWP) has announced new 'last resort' debt recovery powers that will be gradually rolled out from October 2026. These powers, part of the PAFER Act, enable the DWP to recover money owed directly from an individual's bank account and, in severe cases, seek a court order to temporarily suspend a driving licence.
Code of Practice Outlines New Powers
A newly released Code of Practice details how the DWP will use these powers, targeting debts related to Universal Credit, Pension Credit, and Employment and Support Allowance (ESA). The DWP emphasises that these measures are a 'last resort' for those who can afford to repay but refuse to do so.
Ministerial Statements on Fairness and Fraud
Labour Party 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.'
Cabinet Office Minister Satvir Kaur added: '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.'
Gradual Rollout from October 2026
Enforcement of the powers will begin in October 2026. The DWP has confirmed that benefit payments will be reduced until the debt is repaid. Individuals can use the online DWP service to check their debt amount, repayment history, make payments, and access support.
