DWP Granted New Powers to Seize Funds from Bank Accounts After 28-Day Notice
The Department for Work and Pensions is set to receive significant new authority under legislation introduced by the Labour Party government. These powers will enable the DWP to directly raid bank accounts and seize cash from benefits claimants following a mandatory 28-day notification period after letters are delivered to their homes.
New Legislation Targets Benefit Fraud and Error
The legislation specifically aims to crack down on benefit fraud and administrative errors within the welfare system. Under the new rules, before issuing any direct deduction order, the Minister must provide formal notice to the bank holding the account in question, the liable person, and in cases involving joint accounts, all other account holders.
The notification letter to claimants must clearly identify the specific account that would be subject to the proposed order. It must state the exact amount that would be recoverable under the proposed order and set out the complete terms of that order. For joint accounts, the letter must also outline the Minister's duty to assess the liable person's beneficial interest and explain the legal presumptions that apply in such situations.
28-Day Representation Period for Claimants
The legislation mandates that claimants must be given at least 28 days to respond, beginning the day after the notice is delivered. During this period, the liable person and, in joint account situations, all other account holders are invited to make representations about the terms of the proposed order.
When the account in question is a joint account, claimants can specifically make representations regarding the liable person's beneficial interest in the amounts held within that account. This provision ensures that innocent parties in joint financial arrangements have an opportunity to protect their legitimate interests.
Notification Requirements and Review Process
If, after receiving representations, the Minister decides not to proceed with a direct deduction order, they must notify the bank, the liable person, and all other joint account holders of this decision as soon as reasonably practicable. The DWP emphasizes that any information shared through the Eligibility Verification Measure will not be based on presumptions or suspicions of criminal activity.
The department provides the example of Universal Credit eligibility rules, noting that individuals generally cannot hold more than £16,000 in savings while remaining eligible for benefits, unless this capital falls under specified exceptional circumstances. Claimants will receive formal notice if the government imposes any penalty, and they will have the full 28-day period to request a review of the decision before any funds are actually recovered from their accounts.
