New DWP benefit fraud measures include driving bans and bank account monitoring

Benefit cheats could lose their driving licence if they repeatedly fail to pay back money to the taxpayer, under a new UK Government drive to curb welfare fraud. The Department for Work and Pensions (DWP) will also be able to recover money directly from fraudsters’ bank accounts, in what has been dubbed ‘the biggest fraud crackdown in a generation’.

The Public Authorities (Fraud, Error and Recovery) Bill, which would put the measures into law, is due to be introduced in Parliament on Wednesday and will help save the taxpayer £1.5 billion over the next five years, the DWP estimates. Once the Bill is made law, benefit cheats could be disqualified from driving for up to two years if they refuse to repay money they owe.

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Courts could suspend fraudsters’ driving licences following application by the DWP, if they owe welfare debts of more than £1,000 and have ignored repeated requests to pay it back. The Department will also have powers to get bank statements from people they believe have enough cash to pay back welfare debts, but are refusing to do so.

However, the DWP insists it will not have direct access to people’s bank accounts.

Minister for Employment Alison McGovern told BBC Breakfast on Wednesday that the DWP will work with banks to tell them “here are a list of people who are receiving benefits and the criteria that they must stick to. You can only have £16,000 in the bank, please tell us if you have evidence that people are outside the eligibility criteria that will help us root out and find fraud.”

In an attempt to provide assurance about the Bill, ministers will bring forward codes of practice for those who will use the new powers.

They also plan to introduce new oversight and reporting mechanisms to monitor how the powers are used.

This Bill comes as the UK Government seeks to bring forward measures to overhaul the welfare system as part of its Plan for Change, so it better supports people to enter and remain in work and to tackle the spiralling welfare bill. New proposals for reforming the health and disability benefits system expected in the Spring.

Secretary of State for Work and Pensions, Liz Kendall, said: “We are turning off the tap to criminals who cheat the system and steal law-abiding taxpayers’ money.

“This means greater consequences for fraudsters who cheat and evade the system, including as a last resort in the most serious cases removing their driving licence. Backed up by new and important safeguards including reporting mechanisms and independent oversight to ensure the powers are used proportionately and safely.

“People need to have confidence that the Government is opening all available doors to tackle fraud and eliminate waste, as we continue the most ambitious programme for government in a generation - with a laser-like focus on outcomes which will make the biggest difference to their lives as part of our Plan for Change.”

The Cabinet Office’s Public Sector Fraud Authority will also be given more powers under the legislation being introduced in Parliament.

A brand-new measure will see the time limit for civil claims against Covid fraud doubled from six to twelve years. This step change in the ability to fight fraud committed during the pandemic will give the Covid Corruption Commissioner and the Public Sector Fraud Authority more time to investigate complex cases and apply their new powers retrospectively - including the ability to raid properties and retrieve money from Covid fraudsters’ bank accounts.

Georgia Gould, Minister in the Cabinet Office, said: “During the pandemic, when people and businesses needed government support the most, some people stole public money for their own personal gain.

“This legislation gives the government tough new powers that can be used to investigate and recover money stolen from the public during covid and doubles the time we have to bring fraudsters to justice.

“Taken together, these measures show the government’s commitment to taking a responsible approach to public finances which is required for long-term economic growth, in order to deliver for working people up and down the country.”

New DWP measures to tackle fraud

The new law will deliver on this UK Government’s manifesto commitment to safeguard taxpayers’ money - ensuring every pound is spent wisely and effectively:

• New powers of search and seizure - so DWP can control investigations into criminal gangs defrauding the taxpayer.

• Allowing DWP to recover debts from individuals no longer on benefits and not in PAYE employment who can pay money back but have avoided doing so.

• New requirements for banks and building societies to flag where there is an indication that there may be a breach of eligibility rules for benefits - preventing debts accruing.

• All the powers will include strong safeguards to ensure they are only used appropriately and proportionately - including new inspection and reporting mechanisms.

• DWP will have a clearly defined scope and clear limitations for the use of all the powers it is introducing, and staff will be trained to the highest possible standards.

The measures in this Bill will enable the PSFA to:

• Reduce fraud against the public sector by using its expertise to take action on behalf of other departments, against those who attack the public sector.

• Better detect and prevent incorrect payments across the public sector through new information gathering and sharing powers.

• Use strong non-criminal sanctions and civil penalties to provide an alternative to criminal prosecution and to deter fraud.

• Improve the government’s ability to recover public money, through new debt recovery and enforcement powers.

• Use new powers of entry, search and seizure to reduce the burdens on the police in the most serious criminal investigations.

• Improve fraud management in future emergencies by creating specialist time limited powers to be used in crisis management situations - building on lessons learned during COVID-19.

The PSFA will implement a ‘test and learn’ approach when utilising these powers, piloting different approaches and expertise to find the best way to tackle public sector fraud.