Bank account snooping and driving bans planned in government crackdown on benefit fraudsters

Benefit fraudsters could be banned from driving and subject to bank account snooping if they fail to pay back the taxpayer, under a new government crackdown.

In an effort to curb welfare fraud, the Department of Work and Pensions (DWP) has launched what has been dubbed the biggest fraud crackdown in a generation.

The Public Authorities (Fraud, Error and Recovery) Bill would introduce new measures, including allowing the government to recover money directly from fraudsters’ bank accounts.

It is due to be introduced to parliament on Wednesday and the DWP estimates it could help save the taxpayer £1.5bn over the next five years.

According to government figures, around £8.6bn was lost to fraud and error overpayments in the financial year ending in April 2024.

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Once the bill is made law, benefit cheats could be banned from driving for up to two years if they refuse to pay back the money they owe.

Courts could also suspend their driving licences following an application if they have debts of £1,000 or more and repayment requests are ignored.

The DWP will also have the power to get bank statements from people who it believes have enough cash to pay back the debts but are refusing to do so.

“We are turning off the tap to criminals who cheat the system and steal law-abiding taxpayers’ money,” Work and Pensions Secretary Liz Kendall said.

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She added: “This means greater consequences for fraudsters who cheat and evade the system, including as a last resort in the most serious cases removing their driving licence.

“Backed up by new and important safeguards including reporting mechanisms and independent oversight to ensure the powers are used proportionately and safely.

“People need to have confidence the government is opening all available doors to tackle fraud and eliminate waste, as we continue the most ambitious programme for government in a generation – with a laser-like focus on outcomes which will make the biggest difference to their lives as part of our Plan for Change.”

There was a significant spike in fraud and error-related benefit overpayments during the COVID pandemic.

Rates nearly doubled from the financial year ending April 2021 to their peak in 2023 at around 4% of the total amount of benefit paid by the department.

The incoming bill will grant more powers to tackle this COVID-era fraud.

Helen Whately, the shadow work and pensions secretary, claimed the laws were a “continuation” of Conservative efforts.

She added: “But having knowingly appointed a convicted fraudster to his cabinet, Keir Starmer cannot be trusted to get tough on fraud.”

Ms Whately was referring to former transport secretary Louise Haigh, who was forced to resign from the cabinet after it was revealed that in 2013 she had lied to police over a work phone she had said was stolen in a mugging.