The Department for Work and Pensions (DWP) has issued a three-month warning to state pensioners and other benefit claimants before it begins using tough new powers to directly target bank accounts, make direct withdrawals, and even ban driving. The crackdown, set to start in October, focuses on Universal Credit, Pension Credit, and Employment and Support Allowance.
New Powers to Tackle Fraud
Under new laws, banks will be forced to share account information with the government, and DWP officials will be able to directly withdraw money from accounts to recover debts. They can also strip claimants of their driving licences. The DWP is writing to those who owe money, encouraging them to engage before direct action is taken.
The department stated: "Previously, the DWP had few options to pursue people who were no longer claiming benefits or in PAYE employment, meaning some who could afford to repay were simply choosing not to. That loophole is now closed."
Targeting Benefit Fraud
Benefit fraud costs the nation billions of pounds annually. The DWP may take action where people are suspected of fraud, are in debt, or have been paid in error. 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."
He added: "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."
Concerns for Vulnerable People
However, there are concerns about vulnerable individuals who may be caught up in the crackdown without deliberate wrongdoing. Rebecca Lamb, external relations manager at Money Wellness, said: "People who deliberately avoid repaying debts should be held accountable. Our concern is making sure that people experiencing vulnerability aren't mistaken for people who are refusing to engage."
She continued: "Many of the people we support are dealing with serious illness, poor mental health, caring responsibilities or financial hardship. Some struggle to understand complex correspondence. Others are overwhelmed by their circumstances and stop opening letters altogether. From the outside, that can sometimes look like non-engagement. In reality, it can be a sign that somebody needs support."
Impact on Claimants
The DWP aims to force people to engage and repay what they owe. The new powers will be used against those who can pay but refuse, while the department says it will work with others to find affordable repayment plans. The three-month warning period is intended to give claimants time to come forward and arrange payments before the crackdown begins.
