The Department for Work and Pensions (DWP) is set to gain the authority to access individuals’ bank accounts and recover overpaid benefit funds following a significant law change enacted in December. The newly granted powers will allow the DWP to obtain data directly from banks, enhancing their ability to verify that benefit recipients receive the correct payments.
These enhanced enforcement measures target fraudsters and debtors, enabling direct deductions from bank accounts to recover debts and rectify fraudulent or erroneous benefit claims. The legislation, aimed at improving fraud investigation and debt recovery, represents a tougher stance against benefit-related fraud.
Cabinet Office Minister Josh Simons emphasized the government’s commitment to combating fraud, stating, “Previous governments have accepted fraud as inevitable. We will not. We are transforming the state’s defenses against those who seek to defraud the taxpayer and restoring fairness.”
Simons added that the new law equips the Public Sector Fraud Authority and government departments with the necessary tools to proactively pursue and reclaim billions lost to fraud and error. Notably, the legislation extends the time limit for civil claims related to fraud from six to twelve years, leaving “no hiding place” for those who cheated taxpayers during the pandemic.
The Public Authorities (Fraud, Error and Recovery) Act received Royal Assent on 2 December and addresses an urgent financial challenge. Overpayments due to benefit fraud and error amounted to £9.5 billion during 2024-2025, constituting approximately 3.3% of total benefit spending. The Act is projected to save £1.5 billion by 2029/2030, according to the Office for Budget Responsibility.
Labour Party Minister for Transformation Andrew Western MP supports the legislative change, noting the necessity of evolving responses to public sector fraud. He said, “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.”
He further highlighted the importance of maintaining a trustworthy benefits system: “A benefits system people can trust is essential for claimants and taxpayers alike – through this Bill that’s exactly what we’ll deliver.”
The DWP affirmed that these measures aim to restore fairness within the social security system and demonstrate the government’s commitment to protecting hardworking taxpayers.