The Department for Work and Pensions (DWP) has unveiled a new Code of Practice outlining how it will use enhanced debt recovery powers granted under the upcoming Public Authorities (Fraud, Error and Recovery) Act 2025. This move comes as part of efforts to tackle the £4.3 billion annual cost of welfare fraud and error.
The comprehensive guidance details procedures and safeguards for directly deducting money from individuals' bank accounts and enforcing disqualification from driving orders in certain circumstances. The Code of Practice will ensure that these powers are applied fairly and consistently, providing crucial clarity on notification processes and avenues for appeal.
A key aspect of the new code addresses the power to impose disqualification from driving orders, which will be used as a last resort for severe cases of benefit fraud where other recovery methods have failed. The guidance outlines specific criteria that must be met before such an order can be sought, including the amount of debt owed and the gravity of the offence.
The DWP has stated that the Code of Practice is designed to provide transparency and accountability in the exercise of these new powers. It details steps the department must take before initiating recovery action, including attempts to engage with individuals on repayment plans. The emphasis is on recovering public funds efficiently while protecting vulnerable individuals from hardship.
The introduction of these powers and the accompanying Code of Practice marks a significant shift in the DWP's approach to debt recovery, underscoring the government's commitment to ensuring the integrity of the benefits system and reclaiming lost taxpayer funds.