The benefits office has clarified how new powers will be used to directly withdraw money from claimants’ bank accounts if they owe money. The Department for Work and Pensions (DWP) is seeking to introduce new measures to tackle benefit fraud and recover public funds.
Parliamentary secretary Georgina Gould said: “Direct deduction orders are a vital mechanism to recover funds from a liable person who can afford to repay their debt but refuses to do so.” She added: “This debt recovery mechanism is not new to Government; the Bill seeks to bring powers that are used elsewhere… not to create brand-new powers.”
Before the powers are used, Ms Gould said the Public Sector Fraud Authority would investigate. The investigation must determine whether money is owed to the public sector due to fraud or error.
If it finds that money is owed, the benefit claimant will be contacted and given the option to settle the debt themselves. If those efforts are unsuccessful, Ms Gould said the direct deduction orders will be used.
She said: “The decision to make a direct deduction order will be made by trained and authorised officers in the PSFA who will work to the standards of the Government counter-fraud profession.”
The legislation requires officials to notify the individual of their intention to deduct funds and give them at least 28 days’ notice to make any comments or objections.
Direct deduction orders can be issued in two forms: regular deductions, which take place periodically, or lump sum deductions, which require a specific amount to be taken at once.
Copies of these orders must be sent to the person liable, joint account holders, and the bank holding the account.
However, there are limitations on the types of accounts that may be subject to a direct deduction order. For example, the clause protects joint account holders by allowing deductions from a joint account only if the liable person has no sole account that can cover the amount within a reasonable time.
Also, in the case of joint accounts, the liable person’s share of the funds is presumed to be equal unless there is evidence to say otherwise. Bank statements and any representations made will also be considered to ensure that only the liable person’s share is used for repayment, protecting the rights of other account holders.
Ms Gould said: “Direct deduction orders are key to seeking the efficient recovery of public moneys while ensuring that recovery is fair and proportionate with robust safeguards to protect those in vulnerable situations.
“They also ensure the fair and appropriate protection of the rights of the individuals involved, allowing for informed decision making and protecting non-liable parties in joint accounts from unwarranted deductions.”
