Overpayment Debt clawback plan criticised by watchdogs

A watchdog has criticised ministers for understating the impact on the poorest people of plans to directly deduct benefit overpayments from claimant bank accounts.

- Daniel Boffey

The Department for Work and Pensions (DWP) is legislating to require banks to withdraw cash from the accounts of those given too much money through fraud or error.

Banks will also be able to charge claimants for "reasonable" administration costs prior to making deductions. The government has not specified the value of the charges.

After reviewing the public authorities (fraud, error and recovery) bill, the Regulatory Policy Committee, an independent legislative watchdog, said the consequences for the most vulnerable had been understated in an impact assessment.

"The statement does not sufficiently take into consideration the potential impact on the poorest members of society of reclaiming overpayments due to error," the committee said.