The DWP is rolling out new ‘last resort’ debt recovery powers from October 2026
The Department for Work and Pensions has announced a new “last resort” punishment coming into effect from October. The fresh legislation will allow the DWP to recoup debt more effectively and create greater fairness in debt recovery.
As a “last resort” measure, the DWP states these powers permit the department to recover money owed directly from an individual’s bank account and, in the most severe cases, the DWP can seek a court order to temporarily ban them from holding a driving licence.
A newly released Code of Practice outlines how the DWP will utilise these new powers. The benefits targeted are Universal Credit, Pension Credit and Employment and Support Allowance, or ESA, reports Birmingham Live.
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 said: ” 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.”
Enforcement of the powers will be gradually rolled out from October 2026. You can utilise the online DWP service to check how much you owe, find out why you need to repay money, view your payment history, pay back what you owe in full or make a one-off payment and get help and support about the money you owe.
Your benefit payments will be reduced until you’ve paid back the money, the DWP has confirmed. You can use this service to check when you will have repaid the money.
