26.01.26

Key implications of the Public Authorities (Fraud, Error and Recovery) Act 2025

Have you updated the DWP recently? There are changes to what the new law means for benefit claimants. Renaissance Legal can help you, whether you are a claimant, supporting a loved one with their benefit claims, or a professional looking after a vulnerable persons’ finances.

This issue has been in the headlines for what feels like years: whether the Department for Work and Pensions (DWP) should be able to access individuals’ financial information through banks and other institutions to check eligibility for benefits.  The Public Authorities (Fraud, Error and Recovery) Act 2025 has now completed its passage through Parliament and received Royal Assent, formally granting further powers to the DWP to investigate claimants and assess eligibility for means tested benefits.

What is the Public Authorities (Fraud, Error and Recovery) Act 2025?

The Public Authorities (Fraud, Error and Recovery) Act 2025 gives the government additional tools to stop people and organisations from wrongly taking public money, to fix mistakes in payments, and to get back money when it has been lost.

The Act gives a new public body, the Public Sector Fraud Authority, and the DWP wider powers to:

• investigate suspected fraud;
• prevent incorrect payments in welfare and other public services; and
• recover money owed to the government.

The government aims to save taxpayers’ money and protect public services, but with built-in safeguards and oversight so that the new powers can only be used fairly and proportionately.

What does it mean in practice?

Explanatory notes which accompany the Act confirm “The measures make provision for the Secretary of State to require banks and other financial institutions to provide information to help the Secretary of State verify a claimant’s entitlement to benefits and identify incorrect payments”.

Some key elements of the Act include:

• The DWP can issue an Eligibility Verification Notice (ERN) to a bank/financial institution requiring them to provide information about a benefit claimant. An ERN will ask banks and financial institutions to examine their account holders’ data against eligibility indicators and provide feedback to the DWP. Information requested in this way will be confined to a very specific set of details about a claimant and will not involve the sharing of detailed documentation, such as bank statements, with the DWP.
• Greater powers with regard to debt recovery – money owed to the DWP can now be recovered from an individual’s bank account by issuing a Direct Deduction Order to their bank for repayment. This could be triggered when a claimant does not engage with the DWP to repay money they owe to the department.
• Regarding fraud investigations, the DWP can now compel banks and financial institutions to provide more detailed information in connection with such investigations. This power can only be utilised where there is a reasonable suspicion of fraud and where it is necessary, reasonable and proportionate to do so.

When will these measures come into force?

The DWP is currently consulting on three Codes of Practice, which set out the details of how and when these measures should be used. This consultation ends on 27^th February 2026, so it’s likely that implementation will happen soon after.

What does this mean to you?

If you’re supporting a vulnerable person, managing someone’s finances professionally, or navigating your own claim, it’s now more important than ever to ensure you report any changes in circumstances to the DWP as soon as possible, and before the DWP make their own enquiries.

A “change in circumstances” is not confined to just financial information – here’s a reminder of other types of change the DWP should be notified of:

• Any changes in income;
• Changes in savings levels. If a person’s savings increase to £6,000 or above, the DWP will want to know about this;
• Moving in with a partner, or separating from a partner;
• Changes in educational status;
• Moving home;
• Extended trips outside of the UK

Reporting changes in circumstances to the DWP isn’t always straightforward. You may have recently stepped in to support a loved one after a relative can no longer help, only to find a backlog of updates that need to be made. We often work with families in exactly this position, helping to untangle situations where benefit claims have been overlooked while people cope with illness, crisis or bereavement.

Whatever your circumstances, getting expert advice can offer real reassurance – not only that you’re reporting changes correctly, but that you have a clear understanding of what you’re entitled to now and in the future.

How Renaissance Legal can help

Our specialist welfare benefits experts can help with everything benefits-related, including assisting with updates to the DWP, particularly if the situation is complicated or dates back several years and it is not clear where to start.

If you would like to speak to someone in the benefits team, then please contact us on 01273 610611 or email us to arrange a consultation about your personal circumstances.

We also regularly support professional clients with welfare benefits queries and cases, so please feel free to get in touch if you’d like to talk through a question or a situation where you’d value some guidance.