The Department for Work and Pensions (DWP) will receive new legal powers from October 2026 that will allow it to recover certain unpaid benefit debts directly from bank accounts without first obtaining a court order. The changes are part of the Government’s wider efforts to tackle benefit fraud and recover money owed to the public purse.
The new powers come under the Public Authorities (Fraud, Error and Recovery) Act 2025 and are intended to strengthen the DWP’s ability to pursue individuals who repeatedly refuse to repay benefit debts after being contacted.
Changes
From October, the DWP will be able to recover money directly from the bank accounts of people who owe qualifying benefit debts and have failed to make repayment arrangements.
According to the Government, letters have already been sent to affected debtors, encouraging them to contact the DWP and settle outstanding balances before the new enforcement powers take effect.
The measures are aimed at cases where individuals have repeatedly refused to repay money they owe rather than those who are actively working with the department to resolve their debts.
Powers
The Public Authorities (Fraud, Error and Recovery) Act 2025 introduces several new enforcement measures.
| New DWP Powers | Details |
|---|---|
| Direct bank recovery | Recover eligible benefit debts from bank accounts without a court order |
| Driving licence action | Courts may suspend or revoke licences in certain serious cases |
| Financial data checks | Limited bank data may be used to identify incorrect benefit payments |
These powers are expected to become available in stages, with some provisions taking effect later than others.
Bank
One of the most significant changes allows the DWP to recover unpaid benefit debts directly from bank accounts.
This power applies in specific circumstances involving people who have refused to repay benefit debts after being given opportunities to do so. It does not automatically apply to every benefit claimant or every overpayment.
The Government says the aim is to improve debt recovery while reducing lengthy enforcement processes.
Licence
In the most serious cases, additional enforcement measures may apply.
Where welfare-related debt exceeds £1,000 and certain legal conditions are met, the DWP may apply to a court for action involving a person’s driving licence. Any suspension or revocation would require a court order, and any initial ban may be suspended if the individual complies with an agreed repayment plan.
The measure is intended as a last resort for persistent non-payment.
Verification
The Act also introduces the Eligibility Verification Measure, which is expected to become operational at a later date.
Under this provision, banks and financial institutions may be required to provide limited information that helps identify incorrect benefit payments. The Government says the purpose is to detect fraud, identify errors earlier, and ensure claimants receive the correct amount of financial support.
Officials have stated that the measure is designed to use limited data rather than providing unrestricted access to customers’ bank accounts.
Spending
Government spending on welfare remains one of the largest areas of public expenditure.
| Welfare Spending (2025-26) | Amount |
|---|---|
| Total welfare spending | £333 billion |
| Pensions | £177 billion |
| State Pension | £146 billion |
Government forecasts suggest overall welfare spending could increase to around £400 billion by the end of the decade.
Fraud
The Government has said the new enforcement powers form part of a broader strategy to reduce benefit fraud, recover public funds, and improve confidence in the welfare system.
When announcing the measures, former Work and Pensions Secretary Liz Kendall said the changes are intended to strengthen action against those who deliberately abuse the benefits system while protecting taxpayers’ money.
She also described driving licence sanctions as a measure that would be used only in the most serious cases where other recovery efforts have failed.
Recovery
Before these changes, the DWP could already recover some benefit debts through existing benefit payments or the Pay As You Earn (PAYE) system.
The new legislation expands the department’s enforcement options by allowing direct bank account recovery in qualifying cases. However, the powers are primarily intended for individuals who repeatedly refuse to engage with repayment efforts rather than those who are cooperating with the department.
The introduction of these measures represents one of the most significant changes to the DWP’s debt recovery powers in recent years. While the Government says the legislation is aimed at reducing fraud and recovering unpaid benefit debts, the new powers include safeguards and are intended to target serious cases of non-payment. Individuals who receive communication from the DWP about outstanding benefit debts are encouraged to contact the department to discuss repayment options where appropriate.
FAQs
When do the new DWP powers begin?
The new bank recovery powers are due to begin in October 2026.
Can the DWP take money without a court order?
Yes, in qualifying benefit debt cases under the new law.
Who could face driving licence action?
People owing over £1,000 in serious cases, subject to a court order.
Will banks share customer data with the DWP?
Limited data may be shared under future eligibility checks.
