New laws allow direct deductions from accounts of those refusing to repay debts, plus bank checks for Universal Credit, Pension Credit and ESA claimants
Fresh DWP anti-fraud legislation has now become law, incorporating provisions to directly withdraw money from individuals’ bank accounts.
Authorities will additionally seek banking information from millions of benefit recipients to verify their entitlement to payments.
The Public Authorities (Fraud, Error, and Recovery) Act gained Royal assent in the House of Lords on December 2.
The DWP has confirmed it will utilise these direct withdrawal capabilities against “benefit cheats, fraudsters and debtors who can afford to repay but refuse”.
The fresh legislation even grants authority to revoke someone’s driving licence should the DWP attempt to recover money from them unsuccessfully, reports the Mirror.
These direct account withdrawal powers are designed for situations where individuals owe money but have exited the benefits system whilst declining to clear their debt despite numerous demands.
Previously, the DWP could only recover funds through benefit deductions or via PAYE salary adjustments.
Minister for Transformation Andrew Western 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.”
In instances where the Department for Work and Pensions (DWP) intends to directly withdraw funds from an individual’s bank account, they will provide prior notice. To ensure sufficient funds are available, investigators will need to request at least three months of bank statements for the person’s account.
If attempts to recover funds have been unsuccessful and there remains £1,000 or more to be paid, officials have the authority to suspend the individual’s driving licence.
The bill also introduces a verification measure for eligibility, which involves officials liaising with banking providers to obtain details of accounts associated with certain benefits. This information will be used to confirm the individual’s entitlement to their cash.
Initially, this will be applied to those claiming Universal Credit, Pension Credit, and Employment and Support Allowance. The legislation indicates that this could be extended to other benefits.
An independent overseer will be appointed to monitor the use of these powers, ensuring their effectiveness and appropriate application.
The bill also includes additional powers for officials to request information when investigating suspected benefit fraud cases. Previously, the DWP could only request information from individuals on a restricted list.
Under the broadened powers, they can request details from any third party believed to be associated with the suspect.
