The government will begin using new powers that allow the Department for Work and Pensions (DWP) to take money directly from bank accounts next week.
The powers grant DWP officials the ability to claw money back from people who refuse to pay benefit debts. They were officially granted after a new law came into effect earlier this year, but the DWP said officials will not begin using them until October.
Fraud crackdown aims to save billions
The new measure is part of a major fraud crackdown announced under Sir Keir Starmer's premiership, which aims to save up to £14.6 billion over the next five years.
After the law was changed at the end of June, the DWP began sending letters to debtors warning them to get in touch and pay up. Those with debt to pay were given several weeks to pay before enforcement gets underway. Now, anyone who has not settled up by the end of September could see the new powers used on them from October onwards.
New powers under PAFER Act
Under the Public Authorities (Fraud, Error and Recovery) Act 2025 (PAFER), the DWP is allowed to seize cash directly from people's bank accounts without need for a court order.
The DWP could also suspend people's driving licences in the most severe cases. If welfare debt is more than £1,000 and there is no working need for a car, someone's driving licence could be revoked via a court order.
Officials defend the new measures
At the time the legislation was granted, Minister for Transformation Andrew Western MP said: "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."
"A benefits system people can trust is essential for claimants and taxpayers alike – through this Bill that's exactly what we'll deliver."
The government said the "modern fraud prevention powers" granted under the bill "match the sophistication of today's threats", which are costing the taxpayer around £10 billion a year. The DWP said that staff will be trained to the highest standards on the appropriate use of the new powers.
Cabinet Office Minister Josh Simons said: "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."
"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."
