DWP to take money directly out of bank accounts after law change but pensioners ‘safe’ | Personal Finance | Finance

The DWP is going to be given the powers to take money directly out of people’s bank accounts after a law change is put in place.

The DWP’s welfare fraud investigators will be granted new powers to withdraw money straight from people’s payslips as part of plans to hammer benefits fraud.

The measure is one of several being introduced in the upcoming Fraud, Error and Debt bill.

The legislation which was announced by Keir Starmer during the Labour Party conference in September, is intended to target benefit fraud by “modernising” the Department for Work and Pensions (DWP) in an effort to save £1.6 billion over the next five years to plug that purported £22bn black hole.

Currently, investigators must secure a court order before deducting money from someone’s wages or bank accounts.

Writing in the Sunday Telegraph, Work and Pensions Secretary Liz Kendall said it was “absurd” that investigators’ powers had not been updated in the last 20 years.

She said: “My team are still, in 2024, sending letters to gather evidence for those suspected of welfare fraud, slowing them down to a snail’s pace when they could be shutting down serious fraud cases.

“Our bill will give them similar powers as HMRC to investigate fraudsters – it’s time we give them the tools they need for the fight.”

As well as the power to deduct money directly from the wages of people who have overclaimed on benefits, the Bill is reported to give investigators the ability to compel information about suspected fraudsters from all private companies, not just banks, utilities and employers.

But it will not extend to the state pension, which Ms Kendall said would not have been “proportionate”.