The U.K. government unveiled new legislation on Wednesday aimed at tackling welfare fraud, which cost taxpayers an estimated £7 billion ($8.62 billion) last year. One of the measures would be the suspension of driving licenses for individuals who fail to repay fraudulent benefits.
Under the new rules, the Department for Work and Pensions (DWP) will seek court orders to disqualify benefit cheats from driving for up to two years if they ignore repeated requests to repay debts exceeding £1,000 ($1,230).
“We are turning off the tap to criminals who cheat the system and steal law-abiding taxpayers’ money,” said Liz Kendall, Secretary of State for Work and Pensions. “This means greater consequences for fraudsters... including as a last resort removing their driving licence.”
The legislation also grants DWP investigators enhanced powers to collaborate with police on fraud cases, allowing them to apply for search warrants and seize evidence such as computers and smartphones from suspected fraudsters.
In an effort to recover funds more effectively, the DWP will be able to directly reclaim money from bank accounts of individuals who are not on benefits or in PAYE—HM Revenue and Customs’ system to collect income tax and national insurance from employment—but have refused to pay back debts. However, officials clarified that they will not have direct access to personal bank accounts.
The bill is expected to save the Department £1.5 billion ($1.85 billion) over the next five years, according to the DWP, as part of a broader initiative aimed at addressing £10 billion ($12.3 billion) lost annually due to fraud and error in the welfare system.
The legislation comes in response to a broken welfare system that has seen £35 billion ($43.06 billion) incorrectly paid since the onset of the COVID-19 pandemic. In addition, it includes provisions doubling the time limit for civil claims against Covid-related fraud from six to 12 years.
“During the pandemic, when people and businesses needed government support the most, some people stole public money for their own personal gain,” according to Georgia Gould, Minister in the Cabinet Office.
“This legislation gives the government tough new powers that can be used to investigate and recover money stolen from the public during Covid.”
The new measures will prioritize fairness and proportionality, focusing first on negotiating affordable repayment plans. New safeguards will also be implemented to protect vulnerable customers and ensure that all actions taken by DWP staff adhere to established guidelines.
The proposed bill passed the first reading and is going through the second reading in the House of Commons. Before it becomes operational, the document needs to be confirmed by the House of Lords and then given the Royal Assent, according to the U.K. legislative process.
