The Department for Work and Pensions (DWP) is set to implement a new “last resort” debt recovery measure beginning in October 2026. This legislation aims to help the DWP recover outstanding debts more efficiently while promoting fairness in the process.
Under these new powers, the DWP will be able to directly recover money owed from an individual’s bank account. In the most severe cases, the department may also seek a court order to temporarily disqualify individuals from holding a driving licence.
A recently published Code of Practice details how these measures will be applied, specifically targeting three benefits: Universal Credit, Pension Credit, and Employment and Support Allowance (ESA).
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Andrew Western, Labour Party Work and Pensions Minister for Transformation, stated, “Hardworking taxpayers deserve a system that pursues those who deliberately dodge their debts, and these new powers are designed to do exactly that. We will continue to work with those with outstanding debts to find affordable repayment solutions, but for those able to pay who refuse, we are intensifying efforts to recover owed funds and combat fraud.”
Cabinet Office Minister Satvir Kaur added, “Fraud and unrecovered debt directly impact the funding of essential public services. Through the new powers granted by the PAFER Act, the government is committed to protecting taxpayers and cracking down on those who seek to cheat the system.”
The implementation of these powers will roll out gradually from October 2026. Individuals can use the DWP’s online service to check outstanding debts, understand repayment reasons, review payment history, and make full or partial repayments. Importantly, benefit payments will be reduced until the debt is fully cleared, with the service providing a schedule for when repayments will be complete.