DWP 'crisis' warning issued over new money-seizing powers

The Department for Work and Pensions (DWP) is set to be granted new powers allowing officials to seize funds directly from the bank accounts of benefit claimants under suspicion of fraud. The forthcoming legislation aims to crack down on benefit fraud, giving investigators the authority to request bank statements and retrieve outstanding sums directly from individuals' accounts.

However, opponents of the impending policy are concerned that innocent claimants could be erroneously targeted, potentially plunging them into severe financial hardship. Sebrina McCullough, director of external relations at the debt and benefit counselling service Money Wellness, emphasised caution: "It is vital that before any agreements to recover money directly from bank accounts are made, affordability checks are completed."

She pointed out that bank statement details may not accurately indicate someone's financial status. Under the new protocols, officials will demand a minimum of three months of bank statements to confirm the availability of funds before proceeding with deductions. They also have the discretion to review statements covering an extended period.

Ms McCullough urged the Government to consider alternative approaches: "We’d encourage the Government to first refer these people to free debt advice services, which can work with people to establish their full financial situation and then support them with a sustainable and workable repayment plan. Otherwise, we risk forcing vulnerable low-income households into crisis."

The expert emphasised the need to consider the broader context to benefit fraud, noting that fraudulent overpayments account for a mere 2.8% of welfare spending, totalling £7.4 billion. This figure compares with £1.6