The Department for Work and Pensions (DWP) has published a draft Code of Practice for debt recovery powers under the Public Authorities (Fraud, Error and Recovery) Act 2025. The guidance outlines procedures for direct deduction from benefits and disqualification from driving orders, as well as other debt recovery measures. The Code of Practice is aimed at providing clarity on debt recovery procedures for public authorities, including local authorities, the Benefits Agency, and the Department of Health and Social Care.
The draft Code of Practice is open for consultation until 31 May 2026, allowing interested parties to provide feedback and suggestions for improvement. The DWP has stated that the finalised Code of Practice will be used to inform its debt recovery practices and provide guidance to public authorities.
Under the Public Authorities (Fraud, Error and Recovery) Act 2025, public authorities are granted powers to recover debts owed to them through direct deduction from benefits, disqualification from driving orders, and other debt recovery measures. The draft Code of Practice provides detailed guidance on these powers and procedures, including the steps that public authorities must take before issuing direct deduction orders and disqualification from driving orders.
Debt experts have welcomed the draft Code of Practice, stating that it provides much-needed clarity on debt recovery procedures for public authorities. However, some have expressed concerns that the guidance may not go far enough in protecting vulnerable individuals from debt recovery measures.
The DWP has stressed that the draft Code of Practice is a working document and is subject to change based on feedback and consultation. The finalised Code of Practice will be published on the DWP website once the consultation period has closed.