New Debt Recovery powers for the Department for Work and Pensions - June 2026

The government has announced a new law, the Public Authorities (Fraud, Error and Recovery) Act 2025 (known as 'PAFER'), whereby the Department for Work and Pensions can now directly mandate the person's bank or financial institution to obtain limited data, without a Court Order when the person is refusing to repay owed benefits back to the DWP. Furthermore, the DWP can seek a Court Order to disqualify a person from driving if they owe the DWP more than £1,000.

Such a driving disqualification will be suspended when a payment plan has been put in place and is abided by. However, if the person has an essential need for their driving licence, such as a job or carer responsibilities, that requires driving then the Court cannot necessarily order a disqualification for this particular circumstance.

The government have advised that this statutory power of the DWP is a absolute last resort with strict legal protections in place.  These powers are generally reserved for individuals who are no longer on benefits, have the financial means to pay, and deliberately refuse to engage with the DWP or set up a repayment plan.

The PAFER Act has been in force since 2nd December 2025.  The legislation has 3 Parts:

Part 1: Functions exercisable on behalf of public authorities

This Part of the Act is applicable to England and Wales only. It covers the legal requirements  of 'Investigatory powers', 'Rights to Recover', 'Methods of Recovery' and 'Civil Penalties'.

An 'Information Notice' is the procedure by which a person is notified that the DWP is seeking information regarding a suspected fraud against a public authority.

Section 3 (in Part 1) of the PAFER Act states:

Information notices

3 (1) The Minister may require a person (“P”) to give specified information to the Minister where the Minister considers that—

(a) it is necessary and proportionate to do so for the purpose of exercising the Minister’s functions under section 1(1)(a) to (c), and

(b) the information relates to a person (whether or not P) whom the Minister has reasonable grounds to suspect has committed fraud against a public authority.

Section 3 goes on to specify that:

3 (3) An information notice must identify (by name or description) the person suspected of having committed fraud as mentioned in subsection (1)(b).

(4) An information notice must set out—

(a) how, where and the period within which the information must be given to the Minister in order for the recipient of the notice to avoid being liable to a penalty under section 54;

(b) information about the consequences of not complying with the notice.

(5) The period mentioned in subsection (4)(a) must not be less than 10 working days beginning with the day after the day on which the information notice is given.

Part 2: Social Security

This Part of the PAFER legislation amends the Social Security Administration Act 1992. The main aspect is an amendment to Section 109B as follows:

After section 109B:

109BZA Power to require information about suspected fraud etc

(1) An authorised officer may give a person (“P”) a written notice (an “information notice”) requiring P to give an authorised officer specified information where the officer—

(a) has reasonable grounds to suspect that a person has committed, is committing or intends to commit a DWP offence, and

(b) considers that it is necessary and proportionate to require the specified information for a purpose mentioned in section 109A(2)(c) or (d) (investigating compliance with the relevant social security legislation etc).

Part 3:  General

This Part of the PAFER legislation covers the timeframe that the DWP can use these powers:

The time limit for bringing the action is 12 years beginning with the day on which the relevant public authority discovers the fraud or could with reasonable diligence discover it (whether that day is before, on or after the day on which this section comes into force).

Section 105 of the PAFER Act states:

105 (5):

(a) a “relevant public authority” is a person who:

(i) exercises functions of a public nature, and

(ii) is not a devolved Scottish authority;

(b) an authority is a “devolved Scottish authority” if its functions:

(i) are exercisable only in or as regards Scotland, and

(ii) are wholly or mainly functions that do not relate to reserved matters within the meaning of the Scotland Act 1998

And Part 3 also covers the Extent of the legislation:

(1) This Act extends to England and Wales and Scotland, subject as follows.

(2) Part 1 of this Act extends to England and Wales only.

(3) Any amendment, repeal or revocation made by this Act has the same extent as the provision amended, repealed or revoked.

The government consulted detailed and established detailed Codes of Practice to govern the application of these powers, ensuring safeguards, data protection and appeal mechanisms.