People in debt to the Department for Work and Pensions (DWP) have until Saturday to act, as new powers allow debts to be reclaimed directly from certain claimants' bank accounts without a court order, as part of a clampdown on debt evasion.
At present, if a person does not repay their debts voluntarily, the DWP recovers the money through the benefits or PAYE system. However, when someone is no longer in receipt of benefits or in PAYE employment, the DWP's only option is to get a court order to recover the money directly from a person's bank.
New Powers to Recover Debt Directly
The new bill allows the Government to recover debt directly from a person's bank account through lump-sum or regular-deduction orders, without going to court. The DWP says this will act as a deterrent, making people more likely to set up payment plans voluntarily, and will also relieve pressure on courts.
The new enforcement powers will be used as a last resort, where repeated attempts to negotiate a voluntary, affordable and sustainable repayment plan have failed, the DWP stressed.
Letters Sent and Deadline
Letters were first sent out on June 24 to anyone who may be affected, warning them of the new debt-collection powers. The recipients were asked to get in touch within four months, which ends on Saturday, October 24.
Debtors will always have the option of setting up repayment plans, and any enforcement action can be stopped, subject to the debtor maintaining the repayment terms.
Protections and Serious Cases
The department must also consider whether deducting the money will leave the person unable to pay for daily living expenses.
In the most serious cases where individuals have persistently and deliberately evaded repayment of debt, the DWP can apply to the court to temporarily disqualify an individual from holding a driving licence where the court is satisfied that the debtor had the means to repay and did not without good reason. This will only apply to individuals who are not on benefit or in PAYE employment.
