The Department for Work and Pensions (DWP) has been granted new powers to recover certain outstanding benefit debts directly from people’s bank accounts as part of a major crackdown on fraud and unpaid debts. The measures, introduced under the Public Authorities (Fraud, Error and Recovery) Act 2025, will begin to be rolled out from October 2026. The Government said the changes form part of its wider plan to save £14.6 billion over the next five years by tackling benefit fraud, official error and unpaid debts.
Thousands warned to arrange repayments
The DWP is writing to thousands of people with outstanding benefit debts, urging them to contact the department and agree a repayment plan. Officials warned that those who fail to engage could face stronger enforcement action under the new legislation. The department stressed it will continue to work with claimants to agree affordable repayment arrangements wherever possible.
Money can be taken directly from bank accounts
Under the new legislation, the DWP will be able to issue Direct Deduction Orders, allowing money owed to be recovered directly from a debtor’s bank account without first obtaining a court order. The department said the powers will only be used in specific circumstances and will not apply to all benefit claimants. According to the DWP, the new measures will only be considered where other methods of recovering the debt are unsuitable or have failed.
Driving ban possible for persistent non-payment
The legislation also introduces powers allowing the DWP to apply to a court for a temporary driving disqualification order against people who repeatedly refuse to repay debts despite having the financial means to do so. A driving ban can only be considered where:
- The outstanding debt is at least £1,000
- Other recovery methods are not reasonably possible
- A court agrees the order is appropriate after considering the individual’s circumstances
Judges must also take into account whether a driving licence is essential for employment or other important personal circumstances before making any order.
Minister: “We’re going further than ever before”
Work and Pensions Minister for Transformation Andrew Western said:
“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.”
Safeguards promised
The Government said safeguards have been built into the new powers to ensure they are used fairly and proportionately, with protections in place for vulnerable people. The DWP said its priority remains helping people repay debts through affordable arrangements, with direct deductions and other enforcement measures reserved for cases where individuals repeatedly refuse to engage despite having the means to pay.
