The Department for Work and Pensions has confirmed the date it will begin to wield ‘tough’ new powers to take money out of people’s bank accounts without even needing a court order.
The DWP says it will start sending letters now to people who still owe benefits debts to the government, giving them a final deadline to pay before October.
Then, it will turn to new powers which became law on Wednesday, June 24, which will allow it to take back money directly from bank accounts ‘without needing a court order’.
Under the Public Authorities (Fraud, Error and Recovery) Act 2025, which the government called ‘the biggest crackdown on welfare debt in a generation’, the DWP can now go directly to a person’s bank to claw back cash owed, without needing a court order. And in the most serious cases, it can ask a court to strip persistent dodgers of their driving licence.
The DWP sad in its announcement: “The DWP is writing to thousands of people with outstanding debts, warning them to get in touch and pay up, or face the consequences.”
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.”
Cabinet Office Minister Satvir Kaur said: “Fraud against the public sector and unrecovered debt deny our vital frontline services of the funding they deserve. Under these new powers in the PAFER Act, this Government will deliver on its promise to protect hardworking taxpayers and clamp down on those who try to cheat the system.”
Anyone no longer in receipt of benefit, who owes money to DWP and receives the new letter should act now. The application of these powers can be avoided entirely by getting in touch with DWP within the next four months. Where it would help, staff can also point individuals towards free debt advice and support services.
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, the DWP stressed.
It added in the announcement: “Other powers under the PAFER Act, which will be operational in future, include the Eligibility Verification Measure, which will allow DWP to require limited data held by banks and financial institutions to help identify incorrect benefit payments, ensuring claimants are paid accurately and allowing errors to be found and resolved sooner.”