The Department for Work and Pensions (DWP) has been granted sweeping new powers to directly access the bank accounts of individuals suspected of benefit fraud or overpayments. This follows a major legislative change that came into force in December.
New Powers to Investigate and Recover Funds
Under the Public Authorities (Fraud, Error and Recovery) Act, which received Royal Assent on 2 December, the DWP can now obtain data from banks and building societies. The primary aim is to ensure benefit claimants are receiving the correct amount and to identify incorrect payments.
The most significant change allows authorities to seize cash directly from accounts. This targets fraudsters and debtors who owe money due to overpayments. The government states these powers are crucial for "investigating fraud, identifying benefit overpayments and recovering debts."
A Government Crackdown on Fraud
The move is a central part of a government drive to tackle losses to the public purse. Cabinet Office Minister Josh Simons argued that previous administrations had accepted fraud as inevitable. "We will not," he stated. "We are transforming the state’s defences against those who seek to defraud the taxpayer and restoring fairness."
He emphasised that the new law equips the Public Sector Fraud Authority and other departments with the tools to "proactively pursue and recover billions of pounds lost to criminals and error." Notably, the time limit for bringing a civil claim related to pandemic fraud has been doubled to twelve years.
The Scale of the Problem and Expected Savings
The government's action is prompted by substantial financial losses. Official figures reveal that benefit fraud and error cost £9.5 billion in overpayments during the 2024-2025 financial year. This represents 3.3% of total benefit expenditure.
The new Act is projected to deliver significant savings for the Treasury. The Office for Budget Responsibility has certified that the measures are expected to save £1.5 billion by 2029/2030.
Labour's Minister for Transformation, Andrew Western MP, supported the measures, saying: "It is right that as fraud against the public sector evolves, the government has a robust and resolute response." He added that the powers would enable better prevention and recovery of debt owed to taxpayers, aiming to deliver a benefits system people can trust.
In a final statement, the DWP said the measures "restore fairness in the social security system and show Government on the side of hardworking taxpayers."
