The Department for Work and Pensions (DWP) has confirmed a new 'last resort' punishment for three benefits, set to take effect from October 2026. The new legislation will enable the DWP to recover debt more efficiently and create greater fairness in debt recovery.
New Powers Under the PAFER Act
As a measure of 'last resort,' these powers allow the DWP to recover money owed from an individual’s bank account. In the most serious cases, the DWP can apply to the court to temporarily disqualify them from holding a driving licence. A newly published Code of Practice explains how the DWP will use these new powers.
Benefits Targeted
The benefits targeted are Universal Credit, Pension Credit, and Employment and Support Allowance (ESA). The enforcement of the powers will be gradually rolled out from October 2026.
Official Statements
Labour Party Work and Pensions Minister for Transformation Andrew Western said: 'Hardworking taxpayers deserve a system that pursues those who deliberately dodge their debts, and that is exactly what these new powers deliver. To anyone with an outstanding debt - our door is open and DWP will always work with you to find an affordable way to repay. But for those who can pay and won’t - we’re going further than ever before to claw back cash and crack down on fraud.'
Cabinet Office Minister Satvir Kaur added: 'Fraud against the public sector and unrecovered debt deny our vital frontline services of the funding they deserve. Under these new powers in the PAFER Act, this Government will deliver on its promise to protect hardworking taxpayers and clamp down on those who try to cheat the system.'
How to Check and Repay Debt
Individuals can use the online DWP service to check how much they owe, find out why they need to repay money, view their payment history, pay back what they owe in full or make a one-off payment, and get help and support about the money they owe. The DWP confirmed that benefit payments will be reduced until the money is repaid, and users can check when they will have repaid the money through the service.
