Parliamentary secretary Georgina Gould has issued a major update over the crackdown.

The Department for Work and Pensions (DWP) has explained how it will take cash from bank accounts with new powers, with a Fraud Bill from the Labour Party government set up with the aim to tackle benefit fraud and recover public funds more easily.

Parliamentary secretary Georgina Gould has issued a major update over the crackdown. Ms Gould said: “Clause 17 introduces direct deduction orders as a method to recover public funds lost to fraud and error from a liable person’s bank account. 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.

“This debt recovery mechanism is not new to Government; the Bill seeks to bring powers that are used elsewhere into the PSFA, not to create brand-new powers for the PSFA. That provides assurance of their effective and proportionate use, and we are doing the same here.

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“The introduction of direct deduction orders is essential to bolster the Government’s ability to recover public funds, ensuring that taxpayer money lost to fraud and error is reclaimed and redirected towards essential public services and the common good.

“To safeguard the use of these powers, direct deduction orders will be used after an investigation by the Public Sector Fraud Authority into suspected fraud against a public authority. 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 investigation must determine, to the civil standard of proof, that money is owed to the public sector as a result of fraud or error. As I have said, we will seek voluntary engagement and repayment, and only after those efforts have been unsuccessful will direct deduction orders be used.

“As outlined in clauses 12 and 14, there are clear restrictions as to when these powers become available, ensuring that their use is not unfettered.”

Ms Gould added: “Direct deduction orders can be either regular, requiring regular deductions, or lump sum, requiring a specific amount to be deducted. Both types of orders can be issued for the same account, to ensure operational flexibility while considering and protecting vulnerability. Copies of direct deduction orders must be sent to the liable person, the joint account holders, if applicable, and the bank where the account is held.”