The Department for Work and Pensions (DWP) has been granted new powers to check the bank accounts of benefit claimants and directly deduct money from those who owe debts, according to multiple reports. The legislation, enacted in December 2025, aims to detect fraud and recover overpayments.
The DWP can now request banking information from UK providers for accounts linked to certain benefits, including Universal Credit, Pension Credit, and Employment and Support Allowance, with the possibility of extending checks to other benefits in the future. The department has confirmed that the bank account checks have not yet been implemented and is currently running a 'test and learn approach' due to start in 2025. The direct deduction powers specifically target people who have left the benefits system and owe money, providing a new mechanism for recovery.
Final versions of the codes of practice will be laid before parliament before any new powers can be used.
The DWP is working on codes of practice for the new powers, and final versions must be laid before parliament before the powers can be used, the department said. This parliamentary oversight ensures that the codes are scrutinized before implementation.
In addition to bank account checks, fraud investigators can now request information from any third party associated with a suspect, expanding their reach beyond a previously restricted list. This change is intended to strengthen the DWP's ability to investigate benefit fraud.
Before using direct deduction, the DWP will contact the person to allow time to dispute the debt and will request three months of bank statements to ensure the person has funds available. Previously, the DWP could only recover funds through PAYE earnings or benefit deductions. The DWP emphasized that safeguards are in place to protect claimants' data and ensure fair treatment.