Public Authorities (Fraud, Error and Recovery) Bill

A Bill to make provision about the prevention of fraud against public authorities and the making of erroneous payments by public authorities; about the recovery of money paid by public authorities as a result of fraud or error; and for connected purposes.

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This is not the latest version of the Bill

Available Versions

27 Oct 2025
Ping: Pong
Bill 319 2024-26 (Lords Amendments)
(0 amendments)
21 Oct 2025
Lords: Third
HL Bill 140 (as amended on Report)
(0 amendments)
Date Debate
Thursday 23rd October 2025 3rd reading
25 Jun 2025
Lords: Report
HL Bill 114 (as amended in Grand Committee)
(130 amendments)
Date Debate
Wednesday 15th October 2025 Report stage
30 Apr 2025
Lords: Committee
HL Bill 96 (as brought from the Commons)
(193 amendments)
Date Debate
Wednesday 18th June 2025 Committee stage
Monday 16th June 2025 Committee stage
Wednesday 11th June 2025 Committee stage
Monday 9th June 2025 Committee stage
Wednesday 4th June 2025 Committee stage
18 Mar 2025
Commons: Report
Bill 204 2024-25 (as amended in Public Bill Committee)
(208 amendments)
Date Debate
Tuesday 29th April 2025 Report stageReport Stage
22 Jan 2025
Commons: Committee
Bill 167 2024-25 (as introduced)
(67 amendments)
Date Debate
Thursday 13th March 2025 Committee stage: 11th sitting
Tuesday 11th March 2025 Committee stage: 10th sitting
Tuesday 11th March 2025 Committee stage: 9th sitting
Thursday 6th March 2025 Committee stage: 8th sitting
Thursday 6th March 2025 Committee stage: 7th sitting
Tuesday 4th March 2025 Committee stage: 5th sitting
Tuesday 4th March 2025 Committee stage: 6th sitting
Thursday 27th February 2025 Committee stage: 4th Sitting
Thursday 27th February 2025 Committee stage: 3rd Sitting
Tuesday 25th February 2025 Committee stage: 2nd Sitting
Tuesday 25th February 2025 Committee stage: 1st Sitting

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17 New Clauses Proposed

Page 1

Part 1

 

Functions exercisable on behalf of public authorities

 

Chapter 1

 

Key concepts

 
"Core functions of the Minister for the Cabinet Office"

Source Bill 167 EN 2024-25

83 Subsection (1) specifies the Minister's core functions: investigating suspected fraud against public authorities, recovering the amounts mentioned in subsection (2), taking enforcement actions related to fraud against public authorities, and supporting public authorities to prevent and address fraud against them.

84 Subsection (2) defines the amounts recoverable under subsection (1) as being either an amount that has been investigated as being suspected fraud against a public authority, or any other amount which a public authority is entitled to recover in respect of fraud, and any interest the public authority is entitled to recover. These are called "recoverable amounts".

1
Core functions of the Minister for the Cabinet Office
5
 
(1)
The Minister for the Cabinet Office (“the Minister”) has the following functions
 
 
(“the core functions”)—
 
 
(a)
investigating suspected fraud against public authorities,
 
 
(b)
recovering amounts mentioned in subsection (2) ,
 
 
(c)
taking enforcement action in connection with fraud against public
10
 
authorities, and
 
 
(d)
providing support to public authorities in relation to preventing and
 
 
tackling fraud against them.
 
 
(2)
The amounts are—
 
 
(a)
payments made as a result of fraud or error that—
15
 
(i)
the Minister has identified or confirmed during the course of
 
 
an investigation in respect of suspected fraud against a public
 
 
authority, and
 
 
(ii)
the public authority is entitled to recover,
 
 
(b)
any other amount that a public authority is entitled to recover in
20
 
respect of fraud, and
 

Page 2

 
(c)
any interest that a public authority is entitled to recover in respect of
 
 
an amount within paragraph (a) or (b) .
 
 
(3)
In this Part, amounts within subsection (2) are referred to as “recoverable
 
 
amounts”.
 
"Interaction with other public authorities etc"

Source Bill 167 EN 2024-25

85 This clause sets out specific conditions under which the functions conferred on the Minister and their authorised officers by this Part may be exercised, as well as detailing what remains unaffected by this Part.

86 Subsection (1) provides that the Minister of the Cabinet Office is to exercise the investigation, enforcement and recovery powers in Part 1 on behalf of another public authority only at the request of that public authority.

87 Subsection (2) states that the Minister may not act at the request of the Secretary of State with responsibility for social security, or for HMRC. This is because the intent of these measures is to be able take action outside the areas of government where most of the existing counter fraud resource is currently situated.

88 Subsection (3) allows the Minister to charge a fee for exercising functions under the Bill.

89 Subsection (4) states that "a public authority" includes the Minister of the Cabinet Office in cases of suspected fraud and recovery of money. This means that the powers in Part 1 can be used in cases of fraud arising in the Cabinet Office.

90 Subsection (5) provides that the enactment of this Part does not impact existing counter fraud investigation and enforcement functions of other public authorities. Specifically, it does not affect the entitlement of a public authority to recover an amount by means other than those provided for in this Part, nor does it replace or supersede the functions concerning fraud and the recovery of losses specific to a public authority other than the Minister.

2
Interaction with other public authorities etc
5
 
(1)
The Minister is to—
 
 
(a)
investigate or take enforcement action in respect of suspected fraud
 
 
against another public authority, or
 
 
(b)
recover money on behalf of another public authority,
 
 
only at the request of that public authority.
10
 
(2)
The Minister may not act as mentioned in subsection (1) at the request of—
 
 
(a)
the Secretary of State with responsibility for social security, or
 
 
(b)
His Majesty’s Revenue and Customs.
 
 
(3)
The Minister may charge another public authority a fee in relation to the
 
 
exercise of functions under this Part on behalf of, or in relation to, the public
15
 
authority.
 
 
(4)
References in this Part to any public authority include the Minister in any
 
 
case relating to—
 
 
(a)
fraud or suspected fraud against the Minister, or
 
 
(b)
the recovery of money for the Minister.
20
 
(5)
Nothing in this Part affects—
 
 
(a)
whether a public authority is entitled to recover an amount, or
 
 
(b)
functions that a public authority has in respect of fraud and the
 
 
recovery of money,
 
 
otherwise than by virtue of this Part.
25

Chapter 2

 

Investigatory powers

 

Information

 
"Information notices"

Source Bill 167 EN 2024-25

91 This clause outlines the power of the Minister to require a person (which includes a body of persons corporate or unincorporate) to provide information deemed necessary for investigating suspected fraud against public authorities.

92 Subsection (1) grants the Minister the power to demand specified information from a person, if it is necessary and proportionate for investigating potential fraud and if there are reasonable grounds to suspect fraud has been committed against a public authority.

93 Subsection (2) explains that this power is exercised through the issuing of an "information notice".

94 Subsection (3) requires the information notice to identify the person suspected of committing fraud.

95 Subsection (4) details the requirements of the information notice, including the format, timeline for compliance, location for submission, and the consequences of non-compliance.

96 Subsection (5) mandates that the compliance period must be a minimum of 10 working days after the notice is issued.

97 Subsection (6) extends the Minister's power to include taking copies of information, requiring the individual to provide information in a specified form, imposing duties on the individual to retain information they already hold for longer than they would normally be required to, and explaining any failure to supply specified information.

98 Subsection (7) restricts the information notice from demanding ",excluded material" or "special procedure material", as defined under the Police and Criminal Evidence Act 1984.

99 Subsection (8) clarifies that "specified" means as detailed in the notice or falling within a described category therein.

3
Information notices
 
 
(1)
The Minister may require a person (“P”) to give specified information to the
30
 
Minister where the Minister considers that—
 
 
(a)
it is necessary and proportionate to do so for the purpose of exercising
 
 
the Minister’s functions under section 1 (1) (a) to (c) , and
 
 
(b)
the information relates to a person (whether or not P) whom the
 
 
Minister has reasonable grounds to suspect has committed fraud
35
 
against a public authority.
 

Page 3

 
(2)
The power conferred by subsection (1) is to be exercised by giving P a notice
 
 
(an “information notice”).
 
 
(3)
An information notice must identify (by name or description) the person
 
 
suspected of having committed fraud as mentioned in subsection (1) (b) .
 
 
(4)
An information notice must set out—
5
 
(a)
how, where and the period within which the information must be
 
 
given to the Minister in order for the recipient of the notice to avoid
 
 
being liable to a penalty under section 53 ;
 
 
(b)
information about the consequences of not complying with the notice.
 
 
(5)
The period mentioned in subsection (4) (a) must not be less than 10 working
10
 
days beginning with the day after the day on which the information notice
 
 
is given.
 
 
(6)
The power under this section to require P to give information to the Minister
 
 
includes the power to—
 
 
(a)
take copies of or extracts from information;
15
 
(b)
require P to provide information in a specified form;
 
 
(c)
require P to retain information that P would not otherwise retain;
 
 
(d)
if any specified information is not given to the Minister, require P to
 
 
state, to the best of P’s knowledge and belief, both where that
 
 
information is and why it has not been given to the Minister.
20
 
(7)
An information notice under this section may not require the giving of—
 
 
(a)
excluded material, or
 
 
(b)
special procedure material,
 
 
within the meaning of the Police and Criminal Evidence Act 1984 (see sections
 
 
11 to 14 of that Act; see section 7 (2) (b) of this Act for provision about
25
 
production orders).
 
 
(8)
In this section, “specified” means—
 
 
(a)
specified, or described, in an information notice, or
 
 
(b)
falling within a category that is specified, or described, in an
 
 
information notice.
30
"Reviews"

Source Bill 167 EN 2024-25

100 This section provides a mechanism to request a review of a decision to issue an information notice.

101 Subsection (1) allows the person receiving the information notice under clause 3 to apply for a review by the Minister.

102 Subsection (2) sets a 7day time limit for making such an application, starting from the day after the notice is given.

103 Subsection (3) mandates that where such an application has been made, the decision to give the notice must be reviewed by the Minister.

104 Subsection (4) allows the reviewing officer to either revoke, uphold, or vary the notice.

105 Subsection (5) requires the Minister to notify the applicant of the review outcome and provide a varied notice if applicable.

106 Subsection (6) specifies that the time period for complying with the information notice will start again in the event that the notice is upheld or varied on a review.

4
Reviews
 
 
(1)
A person to whom an information notice is given under section 3 may apply
 
 
to the Minister for a review of the decision to give the notice.
 
 
(2)
An application under subsection (1) must be made within the period of 7
 
 
days beginning with the day after the day on which the notice is given.
35
 
(3)
Where an application is made under subsection (1) , the Minister must review
 
 
the decision to give the notice.
 
 
(4)
On the review, the Minister may—
 
 
(a)
revoke the notice,
 

Page 4

 
(b)
uphold the notice, or
 
 
(c)
vary the notice.
 
 
(5)
After a review has been carried out, the Minister must—
 
 
(a)
notify the person who applied for the review of the outcome of the
 
 
review, and
5
 
(b)
if the outcome was to vary the notice, give the person the varied notice.
 
 
(6)
Where an information notice is upheld or varied on a review, the period
 
 
mentioned in section 3 (4) (a) is to be treated as beginning on the day after the
 
 
day on which the outcome of the review is notified to the person to whom
 
 
the information notice was given.
10
"Information sharing"

Source Bill 167 EN 2024-25

107 This clause outlines the conditions under which information held by a public authority can be disclosed to the Minister and how information held by the Minister can be shared.

108 Subsection (1) permits a public authority to disclose information to the Minister relevant to the exercise of the Minister's core functions.

109 Subsection (2) restricts the use of this disclosed information by the Minister strictly for the purpose of exercising those core functions.

110 Under subsection (3), the Minister may disclose the information to another party if it is for the purpose of exercising the core functions.

111 Subsection (4) imposes conditions on any third-party recipient of the information, stipulating that said information must only be used for its intended purpose and cannot be further disclosed without the Minister's consent.

5
Information sharing
 
 
(1)
A public authority may disclose information to the Minister for the purpose
 
 
of facilitating the Minister’s exercise of the core functions.
 
 
(2)
The Minister may use information disclosed under subsection (1) only for the
 
 
purpose of exercising the core functions.
15
 
(3)
The Minister may disclose information to another person for the purpose of
 
 
exercising the core functions.
 
 
(4)
Where the Minister discloses information to a person under subsection (3)
 
 
, the person may not—
 
 
(a)
use it for any purpose other than the purpose for which it was
20
 
disclosed, and
 
 
(b)
may not disclose it to any other person,
 
 
without the consent of the Minister.
 
"Amendment of the Investigatory Powers Act 2016"

Source Bill 167 EN 2024-25

112 This clause amends Schedule 4 to the Investigatory Powers Act 2016, which lists relevant public authorities and designated senior officers. The amendment empowers a Senior Executive Officer (or higher grade) within the PSFA's Enforcement Unit to be able to apply to the Investigatory Powers Commissioner for authorisation to obtain communications data in the course of a criminal investigation.

6
Amendment of the Investigatory Powers Act 2016
 
 
In the Investigatory Powers Act 2016, in Schedule 4 (relevant public authorities
25
 
and designated senior officers etc), in the table in Part 1, before the entry for
 
 
the Common Services Agency for the Scottish Health Service insert—
 
 
“Cabinet Office
 
 
60A(7)(b)
 
 
”.
 

Powers of entry, search and seizure etc

 
"Police and Criminal Evidence Act 1984 etc powers"

Source Bill 167 EN 2024-25

113 This clause extends certain provisions of the Police and Criminal Evidence Act 1984 ("PACE") to criminal investigations of fraud offences against public authorities carried out by authorised investigators, authorised by the Minister. These officers may use the PACE powers in the same way as police officers, with some modifications detailed in Schedule 1.

114 Subsection (1) provides that the listed provisions of the PACE Act apply to investigations of fraud against public authorities by authorised investigators. The specific Sections of the PACE Act that are applicable to the PSFA are summarised in the table below.

115 Subsection (2) sets out the particular provisions of PACE that the "authorised investigator" can access in criminal investigations. These are: to seek authorisation from a court (a warrant) to enter and search premises, and to execute the warrant; to apply to a court to obtain access to certain excluded material or special procedure material; to seize evidence, including computerised information, and provisions for access, copying and the retention of materials. The provisions include the safeguards for the use of these powers already in PACE and several sections of PACE which are necessary to ensure the above provisions can be applied.

116 Subsection (3) defines an authorised investigator as an individual authorised by the Minister to execute the powers granted in this clause.

117 Subsection (4) sets out that authorised investigators must be employed within the Civil Service in the Minister's Department, which is the Cabinet Office. The authorised investigators will sit within the Public Sector Fraud Authority. Authorised investigators must also be at the grade of at least Higher Executive Officer, or a grade equivalent to Higher Executive Officer.

118 The following table summarises the PACE measures which are listed in clause 7:

  • Provision: PACE Section 8 - (1) to (5) (power of justice of the peace to authorise entry and search of premises).

    What it means: This section makes provision for an authorised investigator to apply to a court to issue a warrant that will allow for lawful entry into a premise, and search and seizure of anything for which the search has been authorised.

  • Provision: PACE Section 9 - (1) and Schedule 1 (special provision as to access)

    What it means: Section 9(1) allows an authorised investigator to obtain access to excluded or special procedure material by making an application under Schedule 1 for a judge to issue a search warrant or a production order. Any application must demonstrate that the access conditions have been met.

  • Provision: PACE Section 15 (search warrants - safeguards)

    What it means: This section outlines the information that an authorised investigator must provide to the court when applying for a warrant under Section 8. It also specifies the required level of information that must be included on the warrant.

  • Provision: PACE Section 16 (execution of warrants)

    What it means: This section details requirements for the execution of warrants. A warrant may authorise other persons to accompany the authorised investigator when executing the warrant. Those persons will have the same powers as the authorised investigator in respect of executing the warrant and seizing anything the warrant relates to. This is as long as those powers are used under the supervision, and in the company, of an authorised investigator.

  • Provision: PACE Section 19 (general power of seizure)

    What it means: This section articulates what an authorised investigator can lawfully seize when conducting a search. Authorised investigators may seize anything on the premises if they have reasonable grounds for believing that it has been obtained through the commission of an offence or that it is necessary to seize it to prevent the evidence from being concealed, lost, damaged, altered or destroyed.

  • Provision: PACE Section 20 (extension of powers of seizure to computerised information)

    What it means: This section allows for an authorised investigator who is lawfully on a premises to require any accessible electronic information to be provided in a form in which it can be taken away.

  • Provision: PACE Section 21 (access and copying)

    What it means: This section describes the circumstances under which an authorised investigator is required to: provide a record of what was seized; allow access to seized material under the supervision of an authorised investigator; or provide a photograph or copy of the seized material. Authorised investigators can also photograph or copy anything which they have the power to seize.

  • Provision: PACE Section 22 (retention)

    What it means: This section outlines the conditions which apply to seized material and its retention.

  • Provision: PACE Sections 10 to 14, 23 and 118 (interpretation provisions)

    What it means: These sections define the terms ",items subject to legal privilege", "excluded material", "personal records", "journalistic material", "special procedure material", "premises" and further general interpretation for PACE.

7
Police and Criminal Evidence Act 1984 etc powers
30
 
(1)
The provisions of the Police and Criminal Evidence Act 1984 listed in
 
 
subsection (2) apply in relation to investigations of offences of fraud against
 
 
a public authority that are conducted by authorised investigators in the
 
 
exercise of the Minister’s function under section 1 (1) (a) as they apply in
 
 
relation to investigations of offences conducted by police officers, subject to
35
 
the modifications in Schedule 1 .
 

Page 5

 
(2)
The provisions are—
 
 
(a)
section 8(1) to (5) (power of justice of the peace to authorise entry and
 
 
search of premises);
 
 
(b)
section 9(1) and Schedule 1 (special provisions as to access);
 
 
(c)
section 15 (search warrants: safeguards);
5
 
(d)
section 16 (execution of warrants);
 
 
(e)
section 19 (general power of seizure etc);
 
 
(f)
section 20 (extension of powers of seizure to computerised information);
 
 
(g)
section 21 (access and copying);
 
 
(h)
section 22 (retention);
10
 
(i)
sections 10 to 14, 23 and 118 (interpretation provisions), so far as
 
 
necessary for the application of the provisions mentioned in paragraphs
 
 
(a) to (h) .
 
 
(3)
An authorised investigator is an individual who is authorised by the Minister
 
 
to exercise the powers conferred by this section.
15
 
(4)
An individual may not be an authorised investigator unless the individual—
 
 
(a)
is employed in the civil service of the state in the Minister’s
 
 
department, and
 
 
(b)
is a higher executive officer or has a grade that is equivalent to, or
 
 
higher than, that of a higher executive officer.
20
"Disposal of property"

Source Bill 167 EN 2024-25

119 It may not be possible or appropriate to return property to its legal owner which has come into the possession of the PSFA through the exercise of its functions under Part 1 of the Bill. This may be because the rightful owner cannot be identified or because there is no surviving owner. In some cases, it may not be appropriate to return property as it contains illicit content or could be used in the commission of an offence if it was returned. The PSFA requires a lawful way to either dispose of these kinds of property or make changes to the property to remove illicit content before it is returned to its legal owner. This will usually apply to property which had been obtained in the process of collecting evidence, but may also be property obtained by other means, including voluntary surrender by a person.

120 Subsection (1) allows a magistrates' court to order the delivery of relevant property to its rightful owner or to make other appropriate orders if the owner cannot be identified such as giving the PSFA permission to make arrangements for its destruction, subject to safeguards.

121 Subsection (2) permits the court to include in its order provisions for the minister to make necessary changes to the seized property to prevent its use in future offences.

122 Subsection (3) prohibits the destruction or disposal of property under subsection (1)(b) for a period of six months from the date of the order.

123 Subsection (4) clarifies that a first order does not forbid further applications for orders regarding the same property.

124 Subsection (5) allows the court to include provisions on when the property can be destroyed or disposed of in subsequent orders so long as this is not before the end of the period of six-months from the date of the first order.

125 Subsection (6) defines the "relevant property" as tangible property, meaning physical property, not digital property, which has come into the possession of the Minister in the course of fulfilling one of the functions under Part 1.

8
Disposal of property
 
 
(1)
A magistrates’ court may, on an application by the Minister or a person with
 
 
an interest in relevant property—
 
 
(a)
order the delivery of the relevant property to the person appearing
 
 
to the court to be its owner, or
25
 
(b)
if its owner cannot be ascertained, make any other order about the
 
 
relevant property.
 
 
(2)
An order under subsection (1) (a) may include provision for the Minister to
 
 
make any changes to the relevant property that the court considers necessary
 
 
for the purpose of avoiding or reducing any risk of the relevant property
30
 
being used in the commission of an offence.
 
 
(3)
An order under subsection (1) (b) may not provide for the destruction or
 
 
disposal of the relevant property before the end of the period of 6 months
 
 
beginning with the day on which the order is made.
 
 
(4)
An order under subsection (1) (b) (“the first order”) does not prevent further
35
 
applications being made for an order under subsection (1) in respect of the
 
 
relevant property to which the first order applies.
 
 
(5)
Where an order is made following a further application—
 
 
(a)
the order may not provide for the destruction or disposal of the
 
 
relevant property before the end of the period of 6 months beginning
40
 
with the day on which the first order was made, but
 

Page 6

 
(b)
the order may otherwise contain such provision as to the timing of
 
 
the destruction or disposal of the relevant property as the court thinks
 
 
fit.
 
 
(6)
In this section, “relevant property” means tangible property which has come
 
 
into the possession of the Minister in the course of, or in connection with,
5
 
the exercise of a function under this Part.
 
"Incidents etc"

Source Bill 167 EN 2024-25

126 This clause provides for the Independent Office for Police Conduct (",IOPC") to review serious complaints that could arise from PSFA's use of the PACE powers. Specifically, it amends the Police Reform Act 2002 to extend the IOPC Director General's functions to include oversight of public sector fraud investigators in respect of this Act. These amendments include allowing the Minister to issue regulations conferring functions on the Director General in relation to these investigators.

127 Additionally, it permits the sharing of information between the Director General, the relevant Minister and those who act on their behalf, and the Parliamentary Commissioner for Administration to facilitate collaborative investigations, while ensuring that the sharing of such information complies with existing data protection and investigatory powers legislation. This clause also contains definitions relevant to these new provisions, such as "public sector fraud investigators" and "data protection legislation".

9
Incidents etc
 
 
(1)
Part 2 of the Police Reform Act 2002 (complaints and misconduct) is amended
 
 
as follows.
 
 
(2)
In section 10 (general functions of the Director General)—
10
 
(a)
in subsection (1), at the end of paragraph (gb) insert “, and
 
 
“(gc)
to carry out such corresponding functions in relation
 
 
to public sector fraud investigators acting in the exercise
 
 
of functions conferred on them by section 7 of the Public
 
 
Authorities (Fraud, Error and Recovery) Act 2025 (Police
15
 
and Criminal Evidence Act 1984 powers for public sector
 
 
fraud investigators).”,
 
 
(b)
in subsection (3), after paragraph (be) insert—
 
 
“(bf)
any regulations under section 26G of this Act (public
 
 
sector fraud investigators);”, and
20
 
(c)
after subsection (7) insert—
 
 
“(7A)
In this section, “public sector fraud investigators” means
 
 
authorised investigators within the meaning given by section
 
 
7 of the Public Authorities (Fraud, Error and Recovery) Act
 
 
2025.”
25
 
(3)
After section 26F insert—
 
“26G
Public sector fraud investigators
 
 
(1)
The Minister for the Cabinet Office (“the Minister”) may make
 
 
regulations conferring functions on the Director General in relation to
 
 
public sector fraud investigators acting in the exercise of functions
30
 
conferred on them by section 7 of the Public Authorities (Fraud, Error
 
 
and Recovery) Act 2025 (Police and Criminal Evidence Act 1984 powers
 
 
for public sector fraud investigators).
 
 
(2)
Regulations under this section may, in particular—
 
 
(a)
apply (with or without modifications), or make provision
35
 
similar to, any provision of or made under this Part;
 
 
(b)
make provision for payment by the Minister to, or in respect
 
 
of, the Office or in respect of the Director General.
 
 
(3)
The Director General and the Parliamentary Commissioner for
 
 
Administration may jointly investigate a matter in relation to which—
40

Page 7

 
(a)
the Director General has functions by virtue of this section,
 
 
and
 
 
(b)
the Parliamentary Commissioner for Administration has
 
 
functions by virtue of the Parliamentary Commissioner Act
 
 
1967.
5
 
(4)
The Minister may disclose information to the Director General or to
 
 
a person acting on the Director General’s behalf, for the purposes of
 
 
the exercise by the Director General or by any person acting on the
 
 
Director General’s behalf, of a public sector fraud complaints function.
 
 
(5)
The Director General and the Parliamentary Commissioner for
10
 
Administration may disclose information to each other for the purposes
 
 
of the exercise of a function—
 
 
(a)
by virtue of this section, or
 
 
(b)
under the Parliamentary Commissioner Act 1967.
 
 
(6)
Regulations under this section may, in particular, make—
15
 
(a)
further provision about the disclosure of information under
 
 
subsection (4) or (5);
 
 
(b)
provision about the further disclosure of information that has
 
 
been so disclosed.
 
 
(7)
A disclosure of information authorised by or under this section does
20
 
not breach—
 
 
(a)
any obligation of confidence owed by the person making the
 
 
disclosure, or
 
 
(b)
any other restriction on the disclosure of information (however
 
 
imposed).
25
 
(8)
No provision made by or under this section authorises a disclosure
 
 
of information that—
 
 
(a)
would contravene the data protection legislation (but in
 
 
determining whether a disclosure would do so, the power
 
 
conferred by this section is to be taken into account), or
30
 
(b)
is prohibited by any of Parts 1 to 7 or Chapter 1 of Part 9 of
 
 
the Investigatory Powers Act 2016.
 
 
(9)
In this section—
 
 
“data protection legislation” has the same meaning as in the Data
 
 
Protection Act 2018 (see section 3 of that Act);
35
 
“public sector fraud complaints function” means a function in
 
 
relation to the exercise of functions conferred by section 7 of
 
 
the Public Authorities (Fraud, Error and Recovery) Act 2025;
 
 
“public sector fraud investigator” means an authorised investigator
 
 
within the meaning given by section 7 that Act.”
40

Page 8

Chapter 3

 

Rights to recover

 

Recovery of recoverable amounts

 
"Acting for another public authority"

Source Bill 167 EN 2024-25

128 This clause outlines the powers granted to the Minister to act on behalf of a public authority in recovering the 'recoverable amount' as defined in clause 1(3).

129 Subsection (1) authorises the Minister to take actions such as initiating or continuing legal proceedings and exercising the specific powers in Chapter 3 to recover the recoverable amount.

130 Subsection (2) requires that any amounts recovered by the Minister are remitted back to the appropriate public authority. Where it is not clear who the funds should be returned to or the recoverable account does not belong to any one authority, the funds shall be placed in the consolidated fund. This subsection also provides that the Minister can come to an agreement with the relevant public authority that the Minister may retain some or all of the recovered amount.

10
Acting for another public authority
 
 
(1)
The Minister may act under this Part on behalf of another public authority
5
 
in relation to the recovery of a recoverable amount, including by—
 
 
(a)
bringing or continuing proceedings in a court or tribunal for an amount
 
 
(a “claimed amount”) which the Minister reasonably believes to be a
 
 
recoverable amount, and
 
 
(b)
exercising the powers in Chapter 4 to recover a recoverable amount.
10
 
(2)
Where the Minister recovers an amount under this Part on behalf of another
 
 
public authority, the Minister must transfer that amount to the public authority
 
 
unless the public authority agrees that the Minister may retain some or all
 
 
of the amount.
 
"Recovery notices"

Source Bill 167 EN 2024-25

131 This clause outlines the procedure for issuing a recovery notice before bringing a claim for a recoverable amount on behalf of a public authority.

132 Subsection (1) requires that the Minister issues a recovery notice to the person responsible for the recoverable amount before initiating a claim. This person is referred to as the "liable person".

133 Subsection (2) details the requirements of a recovery notice. It must state the intention to bring a claim on behalf of the public authority, the amount regarded as the recoverable amount, the reasons for these decisions, and invite the liable person to settle the amount and set out how this can be done by agreement. It also outlines further actions if the loss isn't settled and identifies a period after which a claim may proceed.

134 Subsection (3) mandates that the period stipulated in the recovery notice, after which the Minister can initiate a claim if not settled, must be a minimum of 28 days from the notice delivery.

135 Subsection (4) sets out that issuing a recovery notice counts as initiating an action for recovering the loss concerning any relevant time limits. For these purposes, the recovery notice will have the effect of issuing a 'letter before action' under the standard civil court processes.

11
Recovery notices
15
 
(1)
Before bringing proceedings in a court or tribunal for a claimed amount on
 
 
behalf of another public authority, the Minister must give the person from
 
 
whom the Minister reasonably believes the amount is recoverable (the “liable
 
 
person”) a notice (a “recovery notice”).
 
 
(2)
A recovery notice must—
20
 
(a)
state that the Minister intends to bring proceedings for the claimed
 
 
amount,
 
 
(b)
state the amount of the claimed amount,
 
 
(c)
provide the Minister’s reasons for believing that amount to be a
 
 
recoverable amount,
25
 
(d)
invite the liable person to discharge the person’s liability in respect
 
 
of the claimed amount by agreement with the Minister, and set out
 
 
how this can be done,
 
 
(e)
set out the further action that may be taken by the Minister under this
 
 
Part in respect of the claimed amount, including if the liable person’s
30
 
liability for the amount is not settled by agreement, and
 
 
(f)
state a period during which the Minister will not bring proceedings
 
 
for the claimed amount in order to give the liable person an
 
 
opportunity to settle their liability in respect of the claimed amount
 
 
by agreement.
35
 
(3)
The period mentioned in subsection (2) (f) must not be less than 28 days
 
 
beginning with the day after the day on which the recovery notice is given.
 

Page 9

 
(4)
The giving of a recovery notice has effect as the bringing of an action for the
 
 
recovery of a claimed amount for the purposes of any time limit that would
 
 
apply in relation to that amount.
 
"Restriction on availability of powers"

Source Bill 167 EN 2024-25

136 This clause limits the exercise of powers by a Minister regarding the recovery of a recoverable loss from a liable person. The Minister may only exercise these powers when the liable person consents to it (i.e., agrees that the recoverable loss is recoverable) or when a court or tribunal has made a final determination that a public authority, on whose behalf the Minister is acting, is entitled to the recoverable loss in question. This provision is intended to prevent arbitrary recovery efforts and to ensure that such actions are legally justified or mutually agreed upon.

12
Restriction on availability of powers
 
 
The Minister may use the methods of recovery in Chapter 4 to recover a
5
 
claimed amount from a liable person only so far as—
 
 
(a)
the liable person agrees, or
 
 
(b)
there has been a final determination by a court or tribunal,
 
 
that the amount is a recoverable amount.
 

Recovery of other amounts

10
"Penalties etc"

Source Bill 167 EN 2024-25

137 This clause grants the Minister the authority to recover other amounts using the powers outlined in Chapter 3 concerning penalties stipulated in Chapter 5 and associated relevant costs.

138 Subsection (1) specifies that the Minister can recover penalties and relevant costs through the powers outlined.

139 Subsection (2) clarifies the terminology used within this Part: the term "amount due in respect of a penalty under Chapter 5" includes penalty-related late payment interest (as further detailed in clause 57), while "relevant costs" include court-awarded costs in claims for recoverable amounts and costs reasonably incurred by the Minister in enforcing recovery powers.

13
Penalties etc
 
 
(1)
The Minister may exercise the powers in Chapter 4 to recover amounts due
 
 
in respect of—
 
 
(a)
a penalty under Chapter 5 , and
 
 
(b)
relevant costs.
15
 
(2)
For the purposes of this Part, references to—
 
 
(a)
an “amount due in respect of a penalty under Chapter 5 ” include late
 
 
payment interest due in respect of a penalty (see section 61 ), and
 
 
(b)
“relevant costs” are to—
 
 
(i)
costs that are awarded by a court or tribunal on or in relation
20
 
to a claim for a recoverable amount, and
 
 
(ii)
costs that are reasonably incurred by the Minister in exercising
 
 
the powers in Chapter 4 .
 
"Restriction on availability of powers"

Source Bill 167 EN 2024-25

140 This clause outlines the conditions under which the Minister can exercise the power to recover an amount due concerning a penalty. The Minister may only do so if either the timeframe for appealing the penalty has expired without an appeal being made, or if any appeal has been abandoned or reached a final determination. In the case of reaching a final determination, this determination must be in favour of the Minister.

14
Restriction on availability of powers
 
 
The Minister may exercise the powers in Chapter 4 to recover an amount due
25
 
in respect of a penalty only when—
 
 
(a)
the time for appealing against the penalty has passed without an
 
 
appeal being brought (see section 60 ), or
 
 
(b)
any appeal against the penalty has been finally determined (see section
 
 
70 (3) ).
30

Page 10

Chapter 4

 

Methods of recovery

 

Introduction

 
"Payable amounts"

Source Bill 167 EN 2024-25

141 This clause defines ",payable amount" as either a ",recoverable amount" (as defined in clause 1(3)), or an amount specified in clause 13(1) (i.e., a civil penalty or relevant costs). This definition serves to establish the scope of what can be considered recoverable under the provisions outlined in the Bill.

15
Payable amounts
 
 
In this Part, references to a “payable amount” are to—
5
 
(a)
a recoverable amount (see section 1 (3) ), or
 
 
(b)
an amount within section 13 (1) .
 

Recovery as if payable under a court order

 
"Recovery orders"

Source Bill 167 EN 2024-25

142 This clause outlines the Minister's authority to seek a recovery order from the county court concerning a recoverable amount.

143 Subsection (1) allows the Minister to apply for such an order.

144 Subsection (2) clarifies that a recovery order serves to make the recoverable amount treated as equivalent to payments enforceable under Section 85 of the County Courts Act 1984, or to be considered as if they were ordered by the court. This ensures that recoverable amounts are enforceable through established legal channels, providing a clear route for enforcement and collection.

16
Recovery orders
 
 
(1)
The Minister may apply to the county court for a recovery order in respect
10
 
of a payable amount.
 
 
(2)
A recovery order is an order providing that the payable amount is
 
 
recoverable—
 
 
(a)
under section 85 of the County Courts Act 1984, or
 
 
(b)
otherwise as if it were payable under an order of the court.
15

Recovery from bank accounts etc

 
"Direct deduction orders"

Source Bill 167 EN 2024-25

145 Subsection (1) authorises the Minister to make such an order if a liable person owes an amount and holds a bank account.

146 Subsection (2) mandates that the order be communicated to the bank holding the account.

147 Subsections (3)-(5) define types of orders: regular-requiring regular deductions, and lump sum-requiring a specified amount to be deducted, and subsection (6) allows both to be issued for the same account.

148 Subsection (7) requires copies of the order to be sent to the liable person and co-holders in the case of joint accounts.

149 Subsection (8) references clauses 19-21, detailing preparatory steps before making the order. For example, the requirement to obtain information from banks, assessing the beneficial interest of monies held in a joint account (where applicable) and further considerations before making an order.

17
Direct deduction orders
 
 
(1)
Where a payable amount is recoverable from a liable person who holds an
 
 
account with a bank, the Minister may make an order (a “direct deduction
 
 
order”) in respect of that account.
20
 
(2)
A direct deduction order must be given to the bank with which the account
 
 
is held.
 
 
(3)
A direct deduction order may be—
 
 
(a)
a regular direct deduction order, or
 
 
(b)
a lump sum direct deduction order.
25
 
(4)
A regular direct deduction order is an order requiring the bank—
 
 
(a)
to make regular deductions from the liable person’s account, and
 
 
(b)
to pay the amounts deducted to the Minister.
 
 
(5)
A lump sum direct deduction order is an order requiring the bank—
 
 
(a)
to deduct from the liable person’s account an amount specified in the
30
 
order, and
 
 
(b)
to pay that amount to the Minister.
 

Page 11

 
(6)
The Minister may give a regular direct deduction order and a lump sum
 
 
direct deduction order in respect of the same account.
 
 
(7)
The Minister must give a copy of a direct deduction order to—
 
 
(a)
the liable person, and
 
 
(b)
in the case of a joint account, each of the other account holders.
5
 
(8)
Sections 19 to 21 set out steps that the Minister must take before making a
 
 
direct deduction order.
 
"Accounts which may be subject to a direct deduction order"

Source Bill 167 EN 2024-25

150 This clause clarifies which accounts may be subject to an order.

151 Subsection (1) permits the Minister to make an order on an account which is held by the liable person and contains an amount which the Minister considers the liable person has a beneficial interest. The question of 'beneficial interest' is more important in the context of 'joint accounts' where it may be less obvious where the beneficial interest in any amount lies.

152 Subsection (2) allows orders on joint accounts only if the liable person does not hold a sole account that could cover the recoverable amount within a reasonable period of time.

153 Subsection (3) makes an exception to subsection (2) if all joint account holders are liable for the recoverable amount.

18
Accounts which may be subject to a direct deduction order
 
 
(1)
The Minister may make a direct deduction order in respect of any account
 
 
which—
10
 
(a)
is held by a liable person, and
 
 
(b)
contains an amount in which the Minister considers the liable person
 
 
has a beneficial interest.
 
 
(2)
The Minister may make a direct deduction order in respect of a joint account
 
 
only if the liable person does not hold a sole account in respect of which a
15
 
deduction order may be made which would be likely to result in the recovery
 
 
of the payable amount within a reasonable period of time.
 
 
(3)
But sub-paragraph (2) does not apply if all the joint account holders are liable
 
 
persons in relation to the same payable amount.
 
"Requirement for banks to provide information"

Source Bill 167 EN 2024-25

154 Clause 19, subsection (1) mandates that before issuing an order, the Minister must obtain and consider bank statements of the liable person's account covering a period of at least three months. The purpose of doing so is to ensure that the liable person holds an account in which a direct deduction order can be made; to determine what deductions should be made; and to determine whether the deduction would cause the liable person hardship in meeting essential living expenses.

155 Subsection (2) specifies that the Minister must issue an account information notice to the bank to obtain these statements covering a period of 3 months before the notice is given, or such longer period as may be specified in the notice.

156 Subsection (3) specifies details to include in this notice, such as the name of the liable person and the identifying details of the account (for example, account number and sort code).

157 Subsections (4) states that the Minister may only issue an 'account information notice' for the purpose of determining whether to issue a direct deduction order in respect of the account.

158 Subsection (5) outlines that the Minister may also issue a general information notice to a bank for the purpose of determining whether to issue a direct deduction order. The general information notice requires the bank to provide information on all of the bank accounts held by the liable person, including the type of account (for example, a savings account), the identifying information for them (for example, account number and sort code) and the correspondence address of the liable person. For individual accounts, the bank must also provide a balance. For joint accounts, the bank must provide the name(s) and correspondence address(es) of each account holder.

159 Subsection (6) allows more than one account information notice, or general information notice, to be given in relation to the same recoverable amount. It also allows for the Minister to give more than one account information notice in respect of the same account.

160 Subsection (7) sets out that, in both the account information notice and general information notice, the notice must set out how and when the bank is to comply with the notice; and explain that the bank may be subject to a penalty under clause 53 if it fails to do so without reasonable excuse.

161 Subsection (8) stipulates banks must comply with a notice given under this section.

162 Subsection (9) prohibits banks from notifying account holders upon receiving such notice. This is to avoid forewarning the liable person that a deduction order may be imposed and therefore to prevent them from being able to move the money out of the account.

163 Subsection (10) restricts use of the information obtained under this section for the purposes of exercising the Minister's core functions only (i.e., in the investigation of suspected fraud).

164 The later regulation making power under clause 37 will enable the Minister to set out in further detail the duties of banks in complying with a request for information, including the length of time in which the bank must respond to a request etc. This is to allow ongoing engagement with banks to incorporate ongoing feedback as powers under this section are operationalised.

19
Requirement for banks to provide information
20
 
(1)
Before the Minister makes a direct deduction order in respect of a liable
 
 
person’s account, the Minister must obtain and consider bank statements for
 
 
the account covering a period of at least three months.
 
 
(2)
To obtain the statements, the Minister must give the bank with which the
 
 
Minister believes the liable person holds the account a notice (an “account
25
 
information notice”) requiring the bank to give the Minister statements for
 
 
the account covering—
 
 
(a)
the three months immediately before the notice is given, or
 
 
(b)
such longer period, ending immediately before the notice is given, as
 
 
may be specified in the notice.
30
 
(3)
An account information notice must—
 
 
(a)
contain the name of the liable person, and
 
 
(b)
identify the account (for example, by number and sort code).
 
 
(4)
The Minister may give an account information notice relating to an account
 
 
only for the purpose of determining whether to make a direct deduction order
35
 
in respect of the account.
 
 
(5)
At any time, for the purposes of determining whether to make a direct
 
 
deduction order in relation to a liable person, the Minister may give a notice
 
 
(a “general information notice”) to a bank requiring the bank to—
 

Page 12

 
(a)
identify every account that the liable person holds with the bank,
 
 
(b)
for each identified account, give the Minister the following
 
 
information—
 
 
(i)
a description of the type of account,
 
 
(ii)
identifiers for the account,
5
 
(iii)
if the account is a sole account, the balance of the account at
 
 
the time that it is identified, and
 
 
(iv)
if the account is a joint account, the name of each other account
 
 
holder, and
 
 
(c)
give the Minister—
10
 
(i)
the correspondence address that the bank holds for the liable
 
 
person, and
 
 
(ii)
in the case of a joint account, the correspondence address that
 
 
the bank holds for each other account holder.
 
 
(6)
The Minister may give—
15
 
(a)
more than one account information notice, or general information
 
 
notice, in relation to the same payable amount;
 
 
(b)
more than one account information notice in respect of the same
 
 
account.
 
 
(7)
A notice under this section must—
20
 
(a)
set out how and when the bank is to comply with the notice, and
 
 
(b)
explain that the bank may be liable to a penalty under section 53 if it
 
 
fails to do so without reasonable excuse.
 
 
(8)
The bank must comply with a notice given under this section.
 
 
(9)
A bank that is given an account information notice, or a general information
25
 
notice, must not notify any of the following people that the notice has been
 
 
given—
 
 
(a)
the liable person,
 
 
(b)
any other holder of the account in respect of which an account
 
 
information notice is given;
30
 
(c)
any other holder of an account identified in accordance with a general
 
 
information notice.
 
 
(10)
Information given to the Minister in response to a notice under this section
 
 
may be used by the Minister for the purpose of exercising the core functions
 
 
but not for any other purpose.
35
"Joint accounts"

Source Bill 167 EN 2024-25

165 This clause focuses on joint accounts, requiring the Minister to assess the liable person's beneficial interest to any amount of money held in the account.

166 Subsection (2) presumes equal share unless other evidence exists as per subsection (3).

167 Subsection (4) mandates that when the Minister is making an assessment as to the liable person's beneficial interest, the Minister must have regard to the bank statements obtained for the account in clause 19, and any response (i.e., representations from the liable person or joint account holder) to a notice under clause 21. For the purposes of the bank statements obtained, the Minister must have regard to the most recent bank statements obtained, i.e., in the case where multiple bank statements may have been obtained in respect of the account.

20
Joint accounts
 
 
(1)
Before making a direct deduction order in respect of a joint account, the
 
 
Minister must make an assessment of the liable person’s beneficial interest
 
 
in the amounts which are or may be in the account from time to time.
 

Page 13

 
(2)
The Minister must presume that the liable person’s beneficial interest entitles
 
 
them to the following share in the amounts which are or may be in the account
 
 
from time to time—
 
 
1 N
 
 
where “N” is the number of account holders.
5
 
(3)
But the presumption does not apply where the Minister has reason to believe
 
 
that the liable person’s beneficial interest is different from the presumed share.
 
 
(4)
In making an assessment under subsection (1) , the Minister must have regard
 
 
to—
 
 
(a)
the bank statements obtained for the account under section 19 , and
10
 
(b)
any responses to a notice under section 21 .
 
"Further requirements before making a direct deduction order"

Source Bill 167 EN 2024-25

168 This clause details the further prerequisites and considerations that must be taken into account before such an order is made.

169 Subsection (1) requires that the Minister issues a notice (the 'first notice') to the bank, the liable person, and any joint account holders: (a) identifying the account to be subject to the proposed order; (b) stating the amount that is recoverable (c) setting out the terms of the proposed order; and (d) if the account is a joint account, setting out the Minister's duty to make an assessment as to the liable person's beneficial interest to any money in the account and the presumption that applies under clause 22.

170 Subsection (2) states that the notice must also invite the liable person, and if relevant the joint account holder, to make representations about the terms of the proposed order. In the case of joint accounts representations can also be made about the liable person's beneficial interest in any amounts held in the account. For the purposes of making representations, the liable person will also be able to provide evidence in support.

171 Subsection (3) sets out the means by which, and the period within which, the representations must be made. For these purposes, subsection (4) details that the period given must be at least 28 days after the day on which the first notice is given.

172 Subsection (5) sets out that the Minister must consider any representations made. In light of these representations, the Minister must then make the assessment as to the beneficial interest of monies held in a joint account (if applicable), and in all cases, decide whether, and in what terms to make the final direct deduction order in respect of the account.

173 Subsection (6) sets out that the first notice may be given to the bank before the notice is given to the liable person (and joint account holder, if relevant). The purpose of doing this is to ensure that the restriction on the account can be put in place before the liable person becomes aware of the terms of the proposed order. The reason for doing so is again to avoid forewarning the liable person and giving them an opportunity to remove the monies from the account.

174 Subsection (7) states that where the first notice has been given to the bank in advance under subsection (6), then the notice must be given to the liable person (and joint account holder) as soon as reasonably practicable afterwards.

175 Subsection (8) sets out what happens in the event the Minister decides not to proceed with making a final direct deduction order. In this case, the Minister must, as soon as reasonably practicable, notify the liable person (and any joint account holder) and the bank from which the proposed order was going to be made. This is to ensure that where the Minister does decide not to proceed, any restrictions on the account can be promptly removed.

176 The later regulation making power under clause 37 will enable the Minister to set out in further detail the duties of banks in complying with the direct deduction order, including the length of time in which the bank must respond to a request etc. This is to allow continuing engagement with banks to incorporate ongoing feedback as the direct deduction order powers are operationalised.

21
Further requirements before making a direct deduction order
 
 
(1)
Before making a direct deduction order, the Minister must give the bank
 
 
where the account in question is held, the liable person, and, in the case of
 
 
a joint account, each of the other account holders, a notice—
15
 
(a)
identifying the account that would be subject to the proposed order,
 
 
(b)
stating the amount that would be recoverable under the proposed
 
 
order,
 
 
(c)
setting out the terms of the proposed order, and
 
 
(d)
if the account is a joint account, setting out the Minister’s duty to
20
 
make an assessment as to the liable person’s beneficial interest and
 
 
the presumption that applies (see section 20 ).
 
 
(2)
The notice must invite the liable person and, in the case of a joint account,
 
 
each other account holder—
 
 
(a)
to make representations about the terms of the proposed order, and
25
 
(b)
in the case of a joint account, to make representations about the liable
 
 
person’s beneficial interest in amounts in the account.
 
 
(3)
The notice must set out the means by which, and the period within which,
 
 
representations may be made.
 
 
(4)
The period must be at least 28 days beginning with the day after the day on
30
 
which the notice is given.
 
 
(5)
The Minister must—
 
 
(a)
consider representations made in accordance with the notice, and
 
 
(b)
in light of any representations—
 
 
(i)
in the case of a joint account, make the assessment required
35
 
under section 20 (1) , and
 
 
(ii)
in any case, decide whether, and in what terms, to make a
 
 
direct deduction order in respect of the account.
 

Page 14

 
(6)
A notice under subsection (1) may be given to the bank before it is given to
 
 
the other persons to whom it is required to be given under that subsection
 
 
(and for the effect of giving the notice to the bank see section 26 (restrictions
 
 
on accounts)).
 
 
(7)
Where a notice is given to the bank in reliance on subsection (6) , the notice
5
 
must be given to the other persons as soon as reasonably practicable after
 
 
being given to the bank.
 
 
(8)
If, following the giving of a notice under this section, the Minister decides
 
 
not to make a direct deduction order, the Minister must, as soon as reasonably
 
 
practicable, notify the bank, the liable person and, in the case of a joint
10
 
account, each of the other account holders, of the decision.
 
"Amount of deductions"

Source Bill 167 EN 2024-25

177 This clause prescribes the conditions under which the Minister may make a direct deduction order ("DDO").

178 Subsection (1) makes it clear that a DDO may only be made where it is fair to do so and will not result in hardship in meeting essential living expenses for the liable person, any joint account holder, or any dependent party (whether financially dependent or otherwise). In order to be satisfied whether to make the order, the Minister must have regard to the information received by virtue of clauses 19 and 21.

179 The provisions of subsection (3) set out that under a regular direct deduction order, the amount deducted from an account during any period of 28 days cannot exceed 40% of the amounts credited to the account in the relevant period where the Minister is satisfied on a balance of probabilities there has been fraud under subsection (4). Where this is not the case (for example, where the person received the recoverable amount through error), only 20% of the amounts credited to the account in the relevant period may be deducted.

180 Subsection (5) defines the 'relevant period' as being the period for which bank statements have been obtained.

181 Subsection (6) states that the Minister must ensure that the total amount to be deducted and paid to the Minister does not exceed the payable amount to which the order relates. This is to ensure the correct amount of deductions are made at all times.

182 In accordance with subsection (7) an order cannot require a deduction is made on a non-working day i.e., Saturday, Sunday or a bank holiday. Where an order is made requiring payment on a non-working day, the obligation to make the deduction and the payment applies in relation to the next working day after that.

183 Clause 37 allows the Minister to make further provision in regulations relating to how the amount of deductions is calculated and in further considering the question of causing a liable person hardship. This is intended to bring the provisions in line with the increase or decrease in inflation and when what constitutes 'essential living expenses' changes in the future.

22
Amount of deductions
 
 
(1)
The Minister may make a direct deduction order only if satisfied on the basis
 
 
of information received by virtue of sections 19 and 21 that the terms of the
 
 
order—
15
 
(a)
will not cause the liable person, any other account holder or a person
 
 
within subsection (2) to suffer hardship in meeting essential living
 
 
expenses, and
 
 
(b)
are otherwise fair in all the circumstances.
 
 
(2)
A person is within this subsection if—
20
 
(a)
they live with the liable person, or any other account holder, for some
 
 
or all of the time, or
 
 
(b)
they are financially dependent on the liable person or any other account
 
 
holder.
 
 
(3)
The total amount of deductions to be made under a regular direct deduction
25
 
order in relation to any period of 28 days must not exceed—
 
 
(a)
in a case to which subsection (4) applies, 40% of the amounts credited
 
 
to the account in the relevant period, and
 
 
(b)
in any other case, 20% of the amounts credited to the account in the
 
 
relevant period.
30
 
(4)
This subsection applies in a case where the Minister is satisfied, on the balance
 
 
of probabilities, that the payable amount to which the regular direct deduction
 
 
order relates is recoverable from the liable person because the liable person
 
 
committed fraud.
 
 
(5)
The “relevant period” is the period of three months mentioned in section
35
 
19 (2) (a) (and if more than one notice is given under section 19 in relation to
 
 
the same direct deduction order, the reference in section 19 (2) (a) to “the notice”
 
 
is to be read as a reference to the most recent of those notices).
 
 
(6)
The Minister must ensure that the total amount to be deducted and paid to
 
 
the Minister under a direct deduction order does not exceed the payable
40
 
amount to which the order relates.
 

Page 15

"Content and effect of direct deduction orders"

Source Bill 167 EN 2024-25

184 This clause specifies the contents and effect of both regular and lump sum direct deduction orders and the requirements for banks' compliance.

185 Both regular direct deduction orders and lump sum direct deduction orders must specify the amounts, or a method for calculating the amounts, to be deducted, and when. Subsection (3) also specifies that a regular deduction may specify different amounts, or different methods, to be deducted at different times.

186 Deductions may not be made until 28 days after an order has been made, this allowing the person the requisite time in order to request a review under clause 34. Subsection (5) states that the bank must comply with the order.

187 In accordance with subsection (6) an order cannot require a deduction is made on a non-working day i.e., Saturday, Sunday or a bank holiday. Where an order is made requiring payment on a non-working day, the obligation to make the deduction and the payment applies in relation to the next working day after that.

23
Content and effect of direct deduction orders
 
 
(1)
A regular direct deduction order must specify—
 
 
(a)
the amounts, or a method for calculating the amounts, to be deducted
 
 
(see section 22 ),
 
 
(b)
when amounts are to be deducted and paid to the Minister, and
5
 
(c)
the penalties that may be imposed for a failure to comply (see section
 
 
53 ).
 
 
(2)
A regular direct deduction order may specify different amounts, or different
 
 
methods for calculating the amounts, to be deducted at different times.
 
 
(3)
A lump sum direct deduction order must specify—
10
 
(a)
the amount, or method for calculating the amount, to be deducted,
 
 
and
 
 
(b)
when the amount is to be deducted and paid to the Minister, and
 
 
(c)
the penalties that may be imposed for a failure to comply (see section
 
 
53 ).
15
 
(4)
A direct deduction order may not require an amount to be deducted from a
 
 
person’s bank account before the end of the period of 28 days beginning with
 
 
the day after the day on which the Minister complies with section 17 (7) .
 
 
(5)
A bank must comply with a direct deduction order.
 
 
(6)
If (apart from this subsection) a bank would be required to make a deduction
20
 
and payment under a direct deduction order on a day that is not a working
 
 
day, the obligation to make the deduction and payment applies in relation
 
 
to the next working day after that day.
 
"Bank’s administrative costs"

Source Bill 167 EN 2024-25

188 This clause allows banks to recover reasonable administrative costs associated with implementing the orders, in accordance with potential further regulations (see clause 37). This allows the bank to deduct their costs to which they are entitled immediately prior to making the direct deduction order.

189 In considering the deductions made under the final direct deduction order, under subsection (3) the Minister must take into account any deductions to be made by the bank for their administrative costs.

190 The later clause 37 contains power for the Minister to make further provision through regulations as to the administrative charges that can be imposed by the banks. This power will be used to introduce a cap on the charges which can be imposed under this clause that can be adjusted in line with inflation and to ensure that the charges remain at all times reasonable.

24
Bank’s administrative costs
 
 
(1)
A direct deduction order may include provision for the bank to deduct from
25
 
the liable person’s account an amount specified in, or calculated in accordance
 
 
with, the order, for the purposes of meeting costs reasonably incurred by the
 
 
bank in complying with the order.
 
 
(2)
A bank may deduct the costs to which they are entitled under a direct
 
 
deduction order immediately prior to making the deduction which is to be
30
 
paid to the Minister under the order.
 
 
(3)
In complying with section 22 (1) and (3) in relation to a direct deduction order
 
 
the Minister must take account of any deductions to be made under the order
 
 
by virtue of provision under subsection (1) .
 
"Insufficient funds"

Source Bill 167 EN 2024-25

191 This clause set outs the circumstances where there are insufficient funds in an account in order to deal with a direct deduction order.

192 Under subsection (1), where the amount in an account is lower than the amount specified in, or calculated in accordance with, a lump sum direct deduction order, then no deduction is to be made, and the bank must notify the Minister as soon as possible.

193 Under subsection (2), where an amount is lower in the case of a regular direct deduction order, the order is to be read as requiring the deduction to be made on the same day the following week. If on that day the amount is still lower, then no deduction is to be made, and the bank must notify the Minister as soon as possible.

194 Subsection (3) sets out that where references are made to an amount to be deducted in accordance with a direct deduction order this includes any amount to be deducted in respect of the bank's administrative costs under clause 24.

25
Insufficient funds
35
 
(1)
Where the amount in an account is lower than the amount to be deducted
 
 
in accordance with a lump sum direct deduction order at the time that the
 
 
bank is (apart from this subsection) required to make the deduction—
 
 
(a)
no deduction is to be made, and
 

Page 16

 
(b)
the bank must notify the Minister as soon as possible.
 
 
(2)
Where the amount in an account is lower than the amount to be deducted
 
 
in accordance with a regular direct deduction order at the time that the bank
 
 
is (apart from this subsection) required to make the deduction—
 
 
(a)
the order is to be read as requiring the deduction and payment to the
5
 
Minister to take place on the same day the following week, and
 
 
(b)
if, on that day, the amount in the account is lower than the amount
 
 
to be deducted in accordance with the order—
 
 
(i)
no deduction is to be made, and
 
 
(ii)
the bank must notify the Minister as soon as possible.
10
 
(3)
References in this section to the amount to be deducted in accordance with
 
 
a direct deduction order include any amounts to be deducted in respect of a
 
 
bank’s costs by virtue of provision under section 24 (1) .
 
"Restrictions on accounts: banks"

Source Bill 167 EN 2024-25

195 This clause introduces restrictions on accounts to maintain the balance required for deduction orders, with provisions to prevent closure or transactions that would reduce the balance below specified amounts.

196 Subsection (1) specifies that, upon receiving a first notice or a direct deduction order, the bank must ensure that the account in question is not closed. For lump sum direct deduction orders, the bank must also ensure that the amount in the account does not fall below the specified amount.

197 Subsection (2) allows the bank to transfer the anticipated value of a lump sum direct deduction order to a "hold account", to ensure that the amount is protected.

198 Subsection (3) states that, when a bank does transfer funds to a hold account, the direct deduction order payments should be taken from that account.

199 Subsection (4) requires that the bank does not cause any disadvantage to the liable person, or any other account holders, when they transfer money to a hold account rather than secure it within the liable person's main account.

200 Subsection (5) sets out that the requirements for a bank to keep an account open and to maintain a particular balance as outlined in subsection (1) do not apply when the decision is made not to make, or to revoke, a direct deduction order, or after the specified amount (outlined in subsection (6) as pertaining to the amount in the first notice) required in a direct deduction order has been paid to the Minister.

26
Restrictions on accounts: banks
 
 
(1)
Where a notice under section 21 (1) (a “first notice”), or a direct deduction
15
 
order under section 17 , is given to a bank in relation to a liable person’s
 
 
account, the bank must—
 
 
(a)
ensure that the account is not closed at the request of an account
 
 
holder, and
 
 
(b)
if the notice relates to a proposed lump sum direct deduction order,
20
 
or the order is a lump sum direct deduction order—
 
 
(i)
secure that no transaction takes place (except for any deduction
 
 
under the order) which would result in the amount in the
 
 
account falling below the specified amount or, if the amount
 
 
in the account is already below that amount, falling any further,
25
 
or
 
 
(ii)
take the action set out in subsection (2) .
 
 
(2)
The action is to—
 
 
(a)
transfer the specified amount, or the amount in the account if that is
 
 
less than the specified amount, from the account into a different
30
 
account (a “hold account”) created by the bank for the sole purpose
 
 
of holding that transferred amount, and
 
 
(b)
secure that no transaction takes place (except for any deduction under
 
 
the order) which would result in the amount in the hold account
 
 
falling below the amount transferred.
35
 
(3)
Where a bank takes the action set out in subsection (2) in relation to a lump
 
 
sum direct deduction order, the order is to be read as if it required all
 
 
deductions to be made from the hold account.
 
 
(4)
A bank must ensure that taking the action set out in subsection (2) does not
 
 
cause any disadvantage to the liable person, and in the case of a joint account,
40
 
any other account holder, that the liable person, and any other account holder,
 

Page 17

 
would not have experienced if the bank had instead acted in accordance with
 
 
to subsection (1) (b) (i) .
 
 
(5)
The requirements in subsection (1) cease to apply when—
 
 
(a)
in relation to a first notice, a notice is given to the bank under section
 
 
21 (8) ) (notice of decision not to make a direct deduction order), or a
5
 
direct deduction order is given to the bank under section 17 ;
 
 
(b)
in relation to a direct deduction order—
 
 
(i)
all the deductions under the order have been made, or
 
 
(ii)
the order is revoked.
 
 
(6)
In subsection (1) (b) and (2) (a) , “specified” means specified in, or calculated
10
 
in accordance with, a first notice or direct deduction order.
 
"Restrictions on accounts: account holders"

Source Bill 167 EN 2024-25

201 This clause imposes restrictions on account holders to prevent them from doing anything which may frustrate the effect of the first notice or the direct deduction order.

202 Subsection (2) specifies that under the first notice these restrictions cease to apply when a decision is made not to make the order, or once a final direct deduction order has been imposed. In the case of the final direct deduction order the restriction will cease when that order is revoked.

203 Subsection (3) clarifies that the reference to frustrating the effect of the first notice under subsection (1), this means frustrating the effect of the proposed direct deduction order.

27
Restrictions on accounts: account holders
 
 
(1)
Where a notice under section 21 (1) (a “first notice”), or a copy of direct
 
 
deduction order under section 17 , is given to a person in relation to an account
 
 
that they hold, they must not do anything to frustrate the effect of the first
15
 
notice or the direct deduction order.
 
 
(2)
The requirement in subsection (1) ceases to apply when—
 
 
(a)
in relation to a first notice, a notice under section 21 (8) ) (notice of
 
 
decision not to make a direct deduction order), or a copy of a direct
 
 
deduction order under section 17 , is given to the person;
20
 
(b)
in relation to a direct deduction order—
 
 
(i)
all the deductions under the order have been made, or
 
 
(ii)
the order is revoked.
 
 
(3)
In subsection (1) , the reference to frustrating the effect of a first notice is a
 
 
reference to frustrating the effect of the proposed direct deduction order the
25
 
terms of which are set out in the notice.
 
"Applications to vary"

Source Bill 167 EN 2024-25

204 This clause defines the ability for the liable person (or joint account holder) to apply to the Minister to vary the direct deduction order during its lifetime. This is to allow the liable person (or a joint account holder) to notify the Minister of any changes in circumstance since the initial order was made.

205 Under subsection (2) in the case of a joint account, where an application is made, the Minister must give an opportunity for the other joint account holders to make representations.

206 Subsection (3) stipulates that the Minister must notify the applicant, and where appropriate any joint account holders, of the Minister's decision on the application.

28
Applications to vary
 
 
(1)
Any holder of an account to which a direct deduction order applies may
 
 
apply to the Minister to vary the order.
 
 
(2)
The Minister must give any other holders of the account an opportunity to
30
 
make representations in relation to the application.
 
 
(3)
The Minister must notify the applicant and any other account holders of the
 
 
Minister’s decision on the application.
 
"Variation"

Source Bill 167 EN 2024-25

207 This clause concerns the variation of direct deduction orders. Subsection (1) allows the Minister to issue a revised order (whether on an application by an account holder or otherwise).

208 Subsection (2) states that the provisions under this clause apply in relation to any variation of a direct deduction order, including one that results from a review under clause 34.

209 Subsection (3) specifies that the Minister must give the liable person (and joint account holders, if relevant) the opportunity to make representations on the terms of the proposed variation.

210 Subsection (4) allows the Minister to comply with the above subsection (3) at the same time as complying with clause 28(2). This will allow the Minister to take and consider representations for both the application to vary an order at the same time as any representations to vary the order.

211 Subsection (5) stipulates that the variation to a direct deduction order will take effect when the Minister gives the varied order to the bank or, if later, in accordance with the terms of the order as varied.

212 Subsection (6) requires the distribution of this revised order to the necessary parties.

213 Subsection (7) allows the Minister to vary a direct deduction order to apply it to another account held by the liable person if the request is made to do so by them, or if the other account is a joint account, the other joint account holder's consent.

214 Subsection (8) details what happens when a direct deduction order is varied to apply to an account administered by a different bank or to apply to a joint account.

215 Subsection (9) sets out that the steps under clauses 19 to 21 do not need to be carried out again when considering to vary an order.

29
Variation
 
 
(1)
The Minister may vary a direct deduction order (whether on an application
35
 
by an account holder or otherwise).
 

Page 18

 
(2)
The provisions in this section apply in relation to any variation of a direct
 
 
deduction order, including one that results from a review under section 34 .
 
 
(3)
Where the Minister proposes to vary a direct deduction order, the Minister
 
 
must give—
 
 
(a)
the liable person, and
5
 
(b)
in the case of a joint account, each of the other account holders,
 
 
an opportunity to make representations about the proposed variation.
 
 
(4)
The Minister may comply with subsection (3) at the same time as complying
 
 
with section 28 (2) .
 
 
(5)
A variation to a direct deduction order takes effect when the Minister gives
10
 
the varied order to the bank or, if later, in accordance with the terms of the
 
 
order as varied.
 
 
(6)
The Minister must give a copy of the varied order to the liable person and,
 
 
in the case of a joint account, each other account holder.
 
 
(7)
The Minister may vary a direct deduction order so that the order applies to
15
 
another account held by the liable person (including an account provided by
 
 
a different bank) only if—
 
 
(a)
the variation is requested by the liable person, and
 
 
(b)
if the other account is a joint account, each of the other account holders
 
 
consents.
20
 
(8)
Where a direct deduction order is varied under subsection (7) —
 
 
(a)
if the order is varied so that it applies to an account provided by
 
 
another bank—
 
 
(i)
the reference in subsection (5) to “the bank” is to the bank
 
 
which provides that account,
25
 
(ii)
section 23 (5) applies to the order as varied as it applied to the
 
 
original order, and
 
 
(iii)
the Minister must notify the bank given the original order of
 
 
the effect of the variation, and
 
 
(b)
if the order is varied so that it applies to a joint account—
30
 
(i)
the requirement in subsection (6) is to give a copy of the order
 
 
to each other holder of that joint account, and
 
 
(ii)
if the original order applied to a joint account, the Minister
 
 
must notify each other holder of that joint account of the effect
 
 
of the variation.
35
 
(9)
The steps set out in sections 19 to 21 do not apply to a decision to vary a
 
 
direct deduction order.
 
"Revocation"

Source Bill 167 EN 2024-25

216 This clause provides for the revocation of direct deduction orders. Subsection (1) gives the Minister the authority to revoke these orders.

217 Subsection (2) obliges revocation upon the recovery of debts or the death of the liable person. Subsection (3) stipulates that notification of revocation is required to be given to the bank and the other account holders involved, where relevant.

30
Revocation
 
 
(1)
The Minister may revoke a direct deduction order.
 

Page 19

 
(2)
The Minister must revoke a direct deduction order as soon as reasonably
 
 
practicable after becoming aware that—
 
 
(a)
the payable amount has been recovered (whether by the Minister or
 
 
the public authority on behalf of which the Minister is acting), or
 
 
(b)
the liable person to whom the order relates has died.
5
 
(3)
Where the Minister revokes a direct deduction order, the Minister must give
 
 
a notice of the revocation to—
 
 
(a)
the bank to which the order was given,
 
 
(b)
the liable person (apart from in a case within subsection (2) (b) ), and
 
 
(c)
in the case of a joint account, each of the other account holders.
10
"Further information notices"

Source Bill 167 EN 2024-25

218 This clause sets out further information notices. Subsection (1) describes the Minister's ability to request information from a bank to assess whether changes to an order are required. Subsection (2) applies certain provisions from clause 19. Subsection (4) allows these notices to be issued before or after the Minister provides the liable person and any joint account holder the opportunity to make representations on the proposed variation.

31
Further information notices
 
 
(1)
For the purposes of determining whether to revoke or vary a direct deduction
 
 
order, the Minister may give a bank a notice (a “further information notice”)
 
 
requiring the bank—
 
 
(a)
to give the Minister statements for an account held by the liable person
15
 
covering—
 
 
(i)
the three months immediately before the notice was given, or
 
 
(ii)
such longer period, ending immediately before the notice was
 
 
given, as may be specified in the notice;
 
 
(b)
to take the steps set out in paragraphs (a) to (c) of section 19 (5) .
20
 
(2)
Subsections (6) to (8) and (10) of section 19 apply in relation to a further
 
 
information notice as they apply in relation to a notice under that section.
 
 
(3)
Before giving a further information notice to a bank requiring statements to
 
 
be given in respect of a joint account, the Minister must notify each account
 
 
holder other than the liable person—
25
 
(a)
that the notice will be given, and
 
 
(b)
of the effect of the notice.
 
 
(4)
A further information notice may be given to the bank before, at the same
 
 
time as or after the Minister complies with section 29 (3) .
 
"Suspension of direct deduction orders"

Source Bill 167 EN 2024-25

219 This clause defines the circumstances under which the operation of direct deduction orders is suspended. Subsection (1) outlines that the Minister can at any time suspend and restart the operation of a regular direct deduction order by notifying the bank. Subsection (2) outlines the requirement for giving notification to account holders of any suspension or restart.

32
Suspension of direct deduction orders
30
 
(1)
The Minister may suspend and re-start the requirement to make deductions
 
 
and payments under a regular direct deduction order at any time by notifying
 
 
the bank to which the order was given.
 
 
(2)
The Minister must notify the liable person and, in the case of a joint account,
 
 
each other account holder if the requirement is suspended or re-started under
35
 
this section.
 

Page 20

"Cessation on death of liable person"

Source Bill 167 EN 2024-25

220 This clause sets out what happens when a liable person dies during the period of a direct deduction order. It sets out that once the bank becomes aware of the liable person's death, the requirements of the order cease to have effect.

33
Cessation on death of liable person
 
 
A bank ceases to be subject to a direct deduction order on becoming aware
 
 
of the liable person’s death.
 
"Reviews"

Source Bill 167 EN 2024-25

221 This clause introduces a process for review of deduction orders by an authorised officer of a higher grade than the original decision maker upon application by relevant parties. A review may be requested when the direct deduction order is made, when the order is varied or when the Minister decides not to vary a deduction order in response to an application under clause 28.

222 Under subsection (3), the period for requesting a review is 28 days, beginning with the day after which the varied order or notice is given.

223 Subsection (4) prevents an application made for a review being brought on any grounds relating to the existence of a payable amount (unless that amount is stated incorrectly in the order).

224 Subsection (5) sets out that once a review is requested, the Minister must review the decision in question.

225 Subsection (6) details that following a review the decision can be upheld, varied, or revoked, with notifications of outcomes as appropriate under subsection (7).

226 Subsection (8) refers to clause 29 for provisions about varying a direct deduction order. This is relevant as the Minister will need to allow for the liable person or any joint account holder to make representations in accordance with clause 29(2).

34
Reviews
 
 
(1)
This section applies where the Minister—
5
 
(a)
makes a direct deduction order,
 
 
(b)
varies a direct deduction order, or
 
 
(c)
decides not to vary a direct deduction order in response to an
 
 
application under section 28 .
 
 
(2)
Any of the following persons (“relevant persons”) may apply to the Minister
10
 
for a review of the decision to make, to vary or not to vary the order—
 
 
(a)
the liable person to whom the order relates, and
 
 
(b)
in the case of a joint account, any other account holder.
 
 
(3)
An application under subsection (1) must be made before the end of the
 
 
period of 28 days beginning with the day after the day on which the applicant
15
 
was—
 
 
(a)
given a copy of the order or the order as varied, or
 
 
(b)
notified of the decision not to vary the order.
 
 
(4)
An application for a review under this section may not be made on, or include,
 
 
any ground relating to the existence or amount of a payable amount (unless
20
 
the amount is said to be incorrectly stated in the order).
 
 
(5)
Where an application for a review is made under this section, the Minister
 
 
must review the decision in question.
 
 
(6)
On the review, the Minister may—
 
 
(a)
uphold the decision,
25
 
(b)
vary the order, or
 
 
(c)
revoke the order.
 
 
(7)
After a review has been carried out, the Minister must—
 
 
(a)
notify the applicant and other relevant persons of the outcome of the
 
 
review, and
30
 
(b)
if the outcome was to vary the order, give—
 
 
(i)
the order as varied to the bank which was given the original
 
 
order, and
 
 
(ii)
a copy of the varied order to the liable person and, in the case
 
 
of a joint account, each other account holder.
35
 
(8)
See section 29 for provisions about varying a direct deduction order.
 
"Appeals"

Source Bill 167 EN 2024-25

227 This clause outlines the right of appeal against the imposition of a direct deduction order to the First-tier Tribunal following a review.

228 Subsection (2) prohibits a relevant person from bringing an appeal unless they have first applied for a review under clause 34 and been notified of the outcome of the review. However, this does not apply where an order is varied on review. Relevant persons are given the meaning under clause 34(2).

229 Subsection (4) sets out that the time for bringing an appeal shall be 28 days beginning with the day after which the Minister complies with clause 34(7).

230 Under subsection (5), the specified grounds must not relate to the existence or amount of a payable amount, unless the payable amount has been incorrectly stated on the order, as the recoverable amount would either have been agreed by the liable person following the recovery notice or determined in a court of tribunal.

231 Under subsection (6) the First-tier Tribunal shall have the power to suspend the requirement on a bank to comply with an order for some or all of the time until the appeal has been finally determined.

232 Subsection (7) details that following an appeal the First-tier Tribunal may amend, revoke, or dismiss the appeal.

35
Appeals
 
 
(1)
A relevant person may appeal to the First-tier Tribunal against—
 

Page 21

 
(a)
the making of a direct deduction order,
 
 
(b)
the variation of a direct deduction order, or
 
 
(c)
a refusal to vary a direct deduction order after an application under
 
 
section 28 .
 
 
(2)
A relevant person may not appeal under subsection (1) in relation to a direct
5
 
deduction order unless they have—
 
 
(a)
applied for a review of the decision to make, to vary or not to vary
 
 
the order under section 34 , and
 
 
(b)
been notified of the outcome of the review.
 
 
(3)
Subsection (2) does not apply where a direct deduction order is varied on a
10
 
review under section 34 .
 
 
(4)
A relevant person must bring an appeal under subsection (1) within the period
 
 
of 28 days beginning with the day after the day on which the person was
 
 
notified of the outcome of the review.
 
 
(5)
An appeal under subsection (1) may not be brought on, or include, any ground
15
 
relating to the existence or amount of a payable amount (unless the amount
 
 
is said to be incorrectly stated in the order).
 
 
(6)
On an appeal under this section, the First-tier Tribunal may suspend the
 
 
requirement on a bank to comply with a direct deduction order for some or
 
 
all of the time until the appeal is finally determined.
20
 
(7)
On an appeal under subsection (1) , the First-tier Tribunal may—
 
 
(a)
amend the direct deduction order;
 
 
(b)
revoke the direct deduction order;
 
 
(c)
dismiss the appeal.
 
 
(8)
In this section, “relevant person” has the meaning that it has in section 34 .
25
"Meaning of “bank” etc"

Source Bill 167 EN 2024-25

233 This clause defines key terms within the legislation, such as definitions for "bank" and the relevant enactments that apply when concerning the definition of banks. The drafting has provided scope to capture standard high street banks, as well as electronic money service providers such as PayPal, Revolut, etc.

36
Meaning of “bank” etc
 
 
(1)
For the purposes of direct deduction orders, “bank” means a person who is
 
 
authorised—
 
 
(a)
to accept deposits, or
 
 
(b)
to issue electronic money.
30
 
(2)
For the purposes of subsection (1) (a) —
 
 
(a)
the reference to accepting deposits is to carrying on the regulated
 
 
activity of accepting deposits for the purposes of the Financial Services
 
 
and Markets Act 2000 (see section 22 of that Act and article 5 of the
 
 
Financial Services and Markets Act 2000 (Regulated Activities) Order
35
 
2001 (S.I. 2001/544)), and
 
 
(b)
a person is authorised to accept deposits if they are an authorised
 
 
person or an exempt person in relation to the carrying on of that
 
 
activity for the purposes of the Financial Services and Markets Act
 
 
2000.
40

Page 22

 
(3)
For the purposes of subsection (1) (b) , a person is authorised to issue electronic
 
 
money if—
 
 
(a)
the person is an electronic money institution, and
 
 
(b)
the person is authorised or registered under Part 2 of the Electronic
 
 
Money Regulations 2011 (S.I. 2011/99) in relation to carrying on the
5
 
activity of issuing electronic money.
 
 
(4)
In subsection (3) , “electronic money” and “electronic money institution” have
 
 
the meanings given by regulation 2(1) of those Regulations (and references
 
 
to the issue of electronic money are to be construed in accordance with those
 
 
Regulations).
10
 
(5)
In this Part, references to an amount in an account are to an amount standing
 
 
to the credit of the account.
 
 
(6)
In this Part, references to a person holding an account include references to—
 
 
(a)
a person holding an account jointly with one or more other persons,
 
 
(b)
a person being a signatory, or one of the signatories, to an account,
15
 
and
 
 
(c)
an account being, in any other way, in the person’s name,
 
 
and “holder” is to be read accordingly.
 
"Regulations"

Source Bill 167 EN 2024-25

234 This clause sets out that the Minister is able to make further provision about direct deduction orders.

235 Subsection (2) sets out that these regulations may include: (a) how notices and orders are to be given by the Minister (b) how notices and information is to be given to the Minister (c) the calculation of amounts to be deducted (d) the duties of banks in relation to direct deduction orders (e) the costs in which a bank may recover under clause 24 or from the Minister and (f) the interaction between similar orders. These regulations are subject to the negative procedure under subsection (9).

236 For the purposes of (a), (b), (d) and (e) there is a requirement under subsection (5) to consult with the banking sector before introducing regulations.

237 Subsection (3) allows the Minister to make regulations to apply clauses 17 to 36 to other types of person who provide financial products or services in the future. The purpose of this power is so that the powers can be applied to new forms of banking in the future, such as if cryptocurrencies were to become regulated by the government. This power is subject to the affirmative procedure under subsection (8) along with a duty to consult banks before introducing regulations under subsection (6).

37
Regulations
 
 
(1)
The Minister may by regulations make further provision about direct deduction
20
 
orders.
 
 
(2)
Regulations under this section may, among other things, make provision
 
 
about—
 
 
(a)
how notices and orders are to be given by the Minister;
 
 
(b)
how notices and information are to be given to the Minister;
25
 
(c)
the calculation of amounts to be deducted, including—
 
 
(i)
about establishing whether deductions would cause a person
 
 
to suffer hardship in meeting essential living expenses, and
 
 
(ii)
about amounts which are, or are not, to be taken into account
 
 
in calculating the amounts credited to an account for the
30
 
purposes of section 22 (3) ;
 
 
(d)
the duties of banks in relation to direct deduction orders, including
 
 
before a direct deduction order is made;
 
 
(e)
costs which a bank may recover by virtue of section 24 or from the
 
 
Minister;
35
 
(f)
the interaction between direct deduction orders under this Schedule
 
 
and similar orders under any other enactment.
 
 
(3)
Regulations under this section may, among other things, apply sections 17 to
 
 
36 , as they apply to banks, to other types of person who provide financial
 
 
products or services (including products or services that operate by reference
40
 
to cryptoassets or any similar product or service).
 

Page 23

 
(4)
In subsection (3) , “cryptoasset” has the meaning given in section 84A of the
 
 
Proceeds of Crime Act 2002.
 
 
(5)
Before making relevant regulations in reliance on subsection (2) (a) , (b) , (d)
 
 
or (e) the Minister must consult—
 
 
(a)
persons who appear to the Minister to represent the interests of banks,
5
 
and
 
 
(b)
such other persons (if any) as the Minister considers appropriate.
 
 
(6)
Before making relevant regulations in reliance on subsection (3) , the Minister
 
 
must consult—
 
 
(a)
persons who appear to the Minister to represent the interests of persons
10
 
to whom provisions about direct deduction orders would be applied
 
 
by the regulations, and
 
 
(b)
such other persons (if any) as the Minister considers appropriate.
 
 
(7)
In this section, “relevant regulations” means—
 
 
(a)
the first regulations made in reliance on the provisions in question,
15
 
and
 
 
(b)
any subsequent regulations made in reliance on those provisions
 
 
which—
 
 
(i)
impose new duties on banks, or
 
 
(ii)
make changes to existing duties or provisions which, in the
20
 
opinion of the Minister, are more than minor.
 
 
(8)
Regulations made in reliance on subsection (3) are subject to the affirmative
 
 
procedure.
 
 
(9)
Any other regulations under this section are subject to the negative procedure.
 

Deduction from earnings

25
"Deduction from earnings orders"

Source Bill 167 EN 2024-25

238 This clause sets out the provisions, process, and requirements associated with deduction from earnings orders. These orders serve as a mechanism for recovering amounts from liable individuals who are employed.

239 Subsection (1) states that the Minister has the authority to initiate a deduction from earnings order when a recoverable amount is due from an employed liable person.

240 Subsection (2) specifies that a deduction from earnings order compels an employer to deduct specified amounts from the liable person's earnings and remit those amounts to the Minister.

241 Subsections (3) and (4) are self-explanatory.

38
Deduction from earnings orders
 
 
(1)
Where an amount is recoverable from a liable person who is employed, the
 
 
Minister may make a deduction from earnings order.
 
 
(2)
A deduction from earnings order is an order requiring the liable person’s
 
 
employer—
30
 
(a)
to make deductions from the liable person’s earnings from that
 
 
employer, and
 
 
(b)
pay the amounts deducted to the Minister.
 
 
(3)
The Minister may by regulations make provision about the meaning of
 
 
“earnings” for the purposes of deduction from earnings orders.
35
 
(4)
Regulations under this section are subject to the negative procedure.
 

Page 24

"Content and effect of deduction from earnings orders"

Source Bill 167 EN 2024-25

242 This clause defines the content and effect of deduction from earnings orders.

243 Subsection (1) sets forth the information that must be included, such as deduction amounts, calculation methods, payment schedules, and penalties for non-compliance.

244 Subsection (2) is self-explanatory.

245 Subsection (3) prohibits deductions before 22 days after the order being provided to the employer.

246 Subsection (4) obligates employers to comply with the order.

39
Content and effect of deduction from earnings orders
 
 
(1)
A deduction from earnings order must set out—
 
 
(a)
the amounts to be deducted or a method for calculating those amounts,
 
 
(b)
the periods in relation to which those amounts are to be deducted
 
 
(the “affected periods”),
5
 
(c)
when amounts are to be deducted and paid to the Minister, and
 
 
(d)
the penalties that may be imposed for a failure to comply (see section
 
 
53 ).
 
 
(2)
The Minister must give—
 
 
(a)
the deduction from earnings order to the liable person’s employer,
10
 
and
 
 
(b)
a copy of the order to the liable person.
 
 
(3)
A deduction from earnings order may not require an amount to be deducted
 
 
from the liable person’s earnings before the end of the period of 22 days
 
 
beginning with the day on which the order is given to the employer.
15
 
(4)
An employer must comply with a deduction from earnings order.
 
"Requirements before making a deduction from earnings order"

Source Bill 167 EN 2024-25

247 This clause details the prerequisites before making a deduction from earnings order, including notifying the liable person and inviting representations about the proposed order.

248 Subsection (1) details that before making an order they must be given an opportunity to make representations. Subsection (2) sets out that the notice must include the terms of the proposed order, a statement of the amount that is recoverable and the means by, and period within which, representations may be made. This period must be at least 28 days from the date of the order.

249 Subsection (4) outlines that the Minister must consider any representations made and may change the terms of the proposed order as a result.

250 Subsection (5) states that the Minister must also provide a copy of the notice to the liable person's employer.

251 Subsection (6) requires the Minister to then notify the liable person and their employer if they decide not to make the order.

40
Requirements before making a deduction from earnings order
 
 
(1)
Before making a deductions from earnings order in respect of a liable person,
 
 
the Minister must give the liable person a notice inviting them to make
 
 
representations about the proposed order.
20
 
(2)
The notice must include—
 
 
(a)
the terms of the proposed order,
 
 
(b)
a statement of the amount that is recoverable, and
 
 
(c)
the means by which, and the period within which, representations
 
 
may be made.
25
 
(3)
The period must be at least 28 days beginning with the day after the day on
 
 
which the notice is given.
 
 
(4)
The Minister must—
 
 
(a)
consider any representations received in accordance with the notice,
 
 
and
30
 
(b)
in light of those representations—
 
 
(i)
decide whether to make a deductions from earnings order in
 
 
respect of the liable person, and
 
 
(ii)
make any changes to the terms of the proposed order that the
 
 
Minister considers appropriate.
35
 
(5)
The Minister must give a copy of a notice under subsection (1) to the liable
 
 
person’s employer.
 

Page 25

 
(6)
If, following the giving of a notice under subsection (1) , the Minister decides
 
 
not to make the proposed deduction from earnings order, the Minister must,
 
 
as soon as reasonably practicable—
 
 
(a)
give the liable person a notice to that effect, and
 
 
(b)
give a copy of the notice to the liable person’s employer.
5
"Amount of deductions"

Source Bill 167 EN 2024-25

252 Subsection (1) states that an order may only be made if the Minister is satisfied that it won't cause the liable person or their dependents to suffer hardship in meeting ordinary living expenses. The order must also be fair. Subsection (2) is self-explanatory.

253 Subsection (3) and (4) limit deductions to 40% of net earnings to recover amounts relating to fraud, and 20% for all other circumstances.

254 Subsection (5) ensures deductions do not exceed the recoverable amount. Subsections (6) to (8) discuss the making of regulations for calculating deductions and addressing hardship. This is subject to the negative procedure. This will allow for the way deductions are calculated to be updated in line with inflation, and to further ensure that 'essential living expenses' are reflective of what constitutes essential living expenses at the relevant present time.

255 Subsection (9) defines "net earnings" for the purposes of this clause. They are defined as earnings after the following have been deducted: income tax; primary Class 1 national insurance contributions; and any pension scheme payments.

41
Amount of deductions
 
 
(1)
The Minister may make a deduction from earnings order only if satisfied that
 
 
the terms of the order—
 
 
(a)
will not cause the liable person or a person within subsection (2) to
 
 
suffer hardship in meeting ordinary living expenses, and
10
 
(b)
are otherwise fair in all the circumstances.
 
 
(2)
A person is within this subsection if—
 
 
(a)
they live with the liable person for some or all of the time, or
 
 
(b)
they are financially dependent on the liable person.
 
 
(3)
The amount to be deducted in relation to an affected period must not exceed—
15
 
(a)
in a case to which subsection (4) applies, 40% of the liable person’s
 
 
net earnings for the affected period, and
 
 
(b)
in any other case, 20% of the liable person’s net earnings for the
 
 
affected period.
 
 
(4)
This subsection applies in a case where the Minister is satisfied, on the balance
20
 
of probabilities, that the payable amount to which the deduction from earnings
 
 
order relates is recoverable from the liable person because the liable person
 
 
committed fraud.
 
 
(5)
The Minister must ensure that the total amount to be deducted and paid to
 
 
the Minister under a deduction from earnings order does not exceed the
25
 
payable amount to which the order relates.
 
 
(6)
The Minister may by regulations make further provision about the calculation
 
 
of amounts to be deducted from a liable person’s earnings and paid to the
 
 
Minister in accordance with a deduction from earnings order.
 
 
(7)
The regulations may, among other things, make provision about establishing
30
 
whether deductions would cause a person to suffer hardship in meeting
 
 
ordinary living expenses.
 
 
(8)
Regulations under this section are subject to the negative procedure.
 
 
(9)
In this section, “net earnings” means the person’s earnings after the following
 
 
have been deducted—
35
 
(a)
income tax,
 
 
(b)
primary Class 1 national insurance contributions, and
 
 
(c)
any contribution that the person pays to a pension scheme.
 

Page 26

"The employer’s administrative costs"

Source Bill 167 EN 2024-25

256 This clause sets out provisions related to deductions from earnings orders, particularly concerning the employer's role and related costs.

257 Subsection (1) allows for such an order to instruct the employer to deduct an amount, either specified or calculated as per the order, from an employee's earnings. This deduction is intended to cover costs reasonably incurred by the employer in fulfilling the order.

258 Subsection (2) mandates that in adhering to the requirements of clause 39(1) and (3) concerning a deduction from earnings order, the Minister must consider the deductions made by the employer under subsection (1).

259 Subsection (3) authorises the Minister to establish regulations regarding the costs described in subsection (1). This power will be used to introduce a cap on the charges which can be imposed under this clause that can be adjusted in line with inflation and to ensure that the charges remain at all times reasonable.

260 Subsection (4) states that any regulations created under this section will be subject to the negative procedure, meaning they will automatically become law without debate unless there is an objection.

42
The employer’s administrative costs
 
 
(1)
A deduction from earnings order may include provision for the employer to
 
 
which it is given to deduct from the liable person’s earnings an amount
 
 
specified in, or calculated in accordance with, the order, for the purpose of
 
 
meeting costs reasonably incurred by the employer in complying with the
5
 
order.
 
 
(2)
In complying with section 41 (1) and (3) in relation to a deduction from
 
 
earnings order the Minister must take account of any deductions to be made
 
 
under the order by virtue of subsection (1) .
 
 
(3)
The Minister may by regulations make provision about costs to which
10
 
subsection (1) relates.
 
 
(4)
Regulations under this section are subject to the negative procedure.
 
"Suspension of deduction from earnings orders"

Source Bill 167 EN 2024-25

261 This clause sets out the circumstances under which the operation of direct deduction orders is suspended. Subsection (1) has the effect that the Minister may at any time suspend and restart the operation of a deduction from earnings order by notifying the employer. Subsection (2) sets out the requirement for giving notification to the liable person of any suspension or restart.

43
Suspension of deduction from earnings orders
 
 
(1)
The Minister may suspend and re-start the requirement to make deductions
 
 
and payments under a deduction from earnings order at any time by notifying
15
 
the employer to which the order was given.
 
 
(2)
The Minister must notify the liable person if the requirement is suspended
 
 
or re-started under this section.
 
"Duty to notify the Minister of change of circumstances"

Source Bill 167 EN 2024-25

262 This clause outlines the processes for communicating changes related to when the liable person leaves or starts new employment. Subsection (1) mandates that a liable person informs the Minister of employment changes within 7 days, including providing information on their expected earnings from the new employment (under subsection (2)).

263 Under subsection (3) new employers, aware of such an order, must also notify the Minister within the same timeframe.

264 Subsection (4) and (5) further sets out what happens when the employee ceases to be employed by the employer subject to the order. This stipulates that the employer must notify the Minister within the period of 10 days beginning with the day on which the liable person leaves employment.

44
Duty to notify the Minister of change of circumstances
 
 
(1)
A liable person in respect of whom a deduction from earnings order is in
20
 
force, must notify the Minister on each occasion that they—
 
 
(a)
leave any employment, or
 
 
(b)
start a new employment,
 
 
within the period of 7 days beginning with the day after the day on which
 
 
they leave or start the employment.
25
 
(2)
If the liable person notifies the Minister that they have started a new
 
 
employment, they must include a statement of their expected earnings from
 
 
their new employment.
 
 
(3)
A person who—
 
 
(a)
becomes the employer of a liable person, and
30
 
(b)
knows that a deduction from earnings order is in force in respect of
 
 
the liable person,
 
 
must, within 10 days of the beginning of the liable person’s employment,
 
 
notify the Minister that they have become the liable person’s employer and
 
 
include a statement of the liable person’s expected earnings from the
35
 
employment.
 
 
(4)
A person must notify the Minister if a liable person in respect of whom a
 
 
deduction from earnings order is in force ceases to be in their employment.
 

Page 27

 
(5)
The notification must be given within the period of 10 days beginning with
 
 
the day after the day on which the liable person leaves the employment.
 
"Applications to vary"

Source Bill 167 EN 2024-25

265 This clause details the ability for the liable person to apply to the Minister to vary the deduction from earnings order during its lifetime. This is to allow the liable person to notify the Minister of any changes in circumstance since the initial order was made.

266 Under subsection (2) the Minister must notify the liable person of the Minister's decision.

45
Applications to vary
 
 
(1)
A liable person may apply to the Minister to vary a deduction from earnings
 
 
order.
5
 
(2)
The Minister must notify the liable person of the Minister’s decision on the
 
 
application.
 
"Variation"

Source Bill 167 EN 2024-25

267 This clause sets out the processes for varying changes related to deduction from earnings orders.

268 Subsection (2) sets out that should an order be varied, the liable person must be given an opportunity to make representations regarding the proposed changes. If an order is revised, then the liable person and their employer must be notified.

46
Variation
 
 
(1)
The Minister may vary a deduction from earnings order given to an employer
 
 
(whether on an application by the liable person or otherwise) by—
10
 
(a)
giving a revised version of the order to the employer, and
 
 
(b)
giving a copy of the revised version to the liable person.
 
 
(2)
Where the Minister proposes to vary a deduction from earnings order, the
 
 
Minister must give the liable person an opportunity to make representations
 
 
about the proposed variation.
15
"Revocation"

Source Bill 167 EN 2024-25

269 This clause enables the Minister to revoke an order, and under subsection (2) must do so if the recoverable amount has been recovered. Under subsection (3) where the order has been revoked a notice must be given to the employer and liable person.

47
Revocation
 
 
(1)
The Minister may revoke a deduction from earnings order.
 
 
(2)
The Minister must revoke a deduction from earnings order if the payable
 
 
amount to which it relates has been recovered.
 
 
(3)
Where the Minister revokes a deduction from earnings order, the Minister
20
 
must give notice of the revocation to—
 
 
(a)
the employer, and
 
 
(b)
the liable person.
 
"Reviews"

Source Bill 167 EN 2024-25

270 This clause defines the processes for a liable person to request a review of a deduction from earnings order.

271 Subsections (1) and (2) allow a review to be requested where the Minister makes the deduction from earnings order, varies an order, or decides not to make an order to vary upon an application under clause 45. Subsection (3) allows a liable person to apply for a review of the order or notice within 28 days of receiving it.

272 Pursuant to subsection (4), a review cannot be based on the existence or amount of a payable amount (unless the amount is said to be incorrectly stated in the order).

273 Under subsection (5) the review must be conducted by the Minister.

274 Under subsection (6) the Minister may uphold, vary or revoke the order, and under subsection (7) the Minister is required to notify the liable person and their employer of the review's outcome.

48
Reviews
 
 
(1)
This section applies where the Minister—
25
 
(a)
makes a deduction from earnings order,
 
 
(b)
varies a deduction from earnings order, or
 
 
(c)
decides not to vary a deduction from earnings order in response to
 
 
an application under section 45 .
 
 
(2)
A liable person may apply to the Minister for a review of the decision to
30
 
make, to vary or not to vary the order.
 
 
(3)
An application under subsection (2) must be made within the period of 28
 
 
days beginning with the day after the day on which the liable person was—
 
 
(a)
given a copy of the order or the order as varied, or
 
 
(b)
notified of the decision not to vary the order.
35

Page 28

 
(4)
An application for a review under subsection (1) may not be brought on, or
 
 
include, any ground relating to the existence or amount of a payable amount
 
 
(unless the amount is said to be incorrectly stated in the order).
 
 
(5)
Where an application is made under this section, the Minister must review
 
 
the decision in question.
5
 
(6)
On a review, the Minister may—
 
 
(a)
uphold the decision,
 
 
(b)
vary the order, or
 
 
(c)
revoke the order.
 
 
(7)
After a review has been carried out, the Minister must—
10
 
(a)
notify the liable person of the outcome of the review, and
 
 
(b)
if the outcome was to vary the order, give—
 
 
(i)
the varied order to the liable person’s employer, and
 
 
(ii)
a copy of the varied order to the liable person.
 
"Appeals"

Source Bill 167 EN 2024-25

275 This clause sets out the process for appealing changes related to deduction from earnings orders.

276 Subsection (1) provides for an appeal to the First-tier Tribunal against the deduction from earnings order, the variation of the order, or a refusal to vary an order after an application under clause 45.

277 Under subsection (2) the liable person cannot bring an appeal unless they have applied for a review and been notified of its outcome. An appeal must be lodged within 28 days of the review outcome notification (subsection (4)) and the liable person is restricted from challenging the existence or amount of a recoverable loss or penalty notice issuance (subsection (5)).

278 The First-tier Tribunal shall have the power to suspend the requirement on a bank to comply with an order for some or all of the time until the appeal has been finally determined (subsection (6)).

279 The Tribunal may vary, revoke the order, or dismiss the appeal (subsection (7)).

49
Appeals
15
 
(1)
A liable person may appeal to the First-tier Tribunal against—
 
 
(a)
the making of a deduction from earnings order,
 
 
(b)
the variation of a deduction from earnings order, or
 
 
(c)
a refusal to vary a deduction from earnings order after an application
 
 
under section 45 .
20
 
(2)
The liable person may not appeal under subsection (1) unless they have—
 
 
(a)
applied for a review of the decision to make, to vary or not to vary
 
 
the order under section 48 , and
 
 
(b)
been notified of the outcome of the review.
 
 
(3)
Subsection (2) does not apply where a deduction from earnings order is varied
25
 
on a review under section 48 .
 
 
(4)
An appeal must be brought within the period of 28 days beginning with the
 
 
day after the day on which the liable person was notified of the outcome of
 
 
the review.
 
 
(5)
An appeal under subsection (1) may not be brought on, or include, any ground
30
 
relating to the existence or amount of a payable amount (unless the amount
 
 
is said to be incorrectly stated in the order).
 
 
(6)
On an appeal under this section, the First-tier Tribunal may suspend the
 
 
requirement on an employer to comply with a deduction from earnings order
 
 
for some or all of the time until the appeal is finally determined.
35
 
(7)
On an appeal under subsection (1) , the First-tier Tribunal may—
 
 
(a)
amend the deduction from earnings order,
 
 
(b)
revoke the deduction from earnings order, or
 
 
(c)
dismiss the appeal.
 

Page 29

Chapter 5

 

Civil penalties

 
"Penalty relating to fraud"

Source Bill 167 EN 2024-25

280 This clause grants the Minister the power to impose penalties on a person. The Minister must be satisfied that, on the balance of probabilities, the person has carried out, or conspired to carry out, fraud to either gain an incorrect payment, or assist another person in doing so, or that a fraud has resulted in a loss to a public authority. The decision to impose a penalty must be made by an authorised officer.

50
Penalty relating to fraud
 
 
The Minister may impose a penalty on a person if satisfied, on the balance
 
 
of probabilities, that the person has carried out, or conspired to carry out,
5
 
fraud—
 
 
(a)
in order to receive or help another person to receive a payment that
 
 
is or, if the payment was not made, would have been, a recoverable
 
 
amount, or
 
 
(b)
with the result that a public authority is entitled to claim any other
10
 
recoverable amount.
 
"Application to members etc of bodies"

Source Bill 167 EN 2024-25

281 This clause outlines the circumstances under which penalties may be imposed on an individual within a body, where that body is liable to receive a penalty.

282 Subsection (1) provides that subsection (2) is applicable when a body is liable to receive a penalty under clause 50 by reason of anything which the Minister finds, on the balance of probabilities, was consented to or connived by a relevant individual in relation to the body, or an individual purporting to act as a relevant individual.

283 Subsection (2) allows the Minister to impose a penalty on the individual as well as the body when the conditions in subsection (1) are met.

284 Subsection (3) provides the definition for "relevant individual," detailing the roles and positions within various types of organisational structures-such as corporations, partnerships, and unincorporated associations whose occupants may be subject to penalties if they exercise management functions.

51
Application to members etc of bodies
 
 
(1)
Subsection (2) applies where a body is liable to receive a penalty under section
 
 
50 by reason of anything which the Minister is satisfied, on the balance of
 
 
probabilities, was done or not done with the consent or connivance of—
15
 
(a)
a relevant individual in relation to the body, or
 
 
(b)
an individual purporting to act in the capacity of a relevant individual
 
 
in relation to the body.
 
 
(2)
The Minister may impose a penalty under section 50 on the individual as
 
 
well as on the body.
20
 
(3)
In this section, “relevant individual” means—
 
 
(a)
in relation to a body corporate other than one whose affairs are
 
 
managed by its members, a director, manager, secretary or other similar
 
 
officer of the body;
 
 
(b)
in relation to a limited liability partnership or other body corporate
25
 
whose affairs are managed by its members, a member who exercises
 
 
functions of management with respect to it;
 
 
(c)
in relation to a limited partnership, a general partner (within the
 
 
meaning given by section 3 of the Limited Partnerships Act 1907);
 
 
(d)
in relation to any other partnership, a partner;
30
 
(e)
in relation to an unincorporated association, a person who exercises
 
 
functions of management with respect to it.
 
"Amount of penalty relating to fraud"

Source Bill 167 EN 2024-25

285 This clause sets the maximum amount of a penalty that can be applied for fraud. Subsection (1) specifies that any penalty levied under section 50 (1)(a) cannot exceed 100% of the incorrect payment to which it relates.

286 Subsection (2) relates to instances where a penalty is applicable under section 50 (1)(a) but the conduct has not led to a person receiving an incorrect payment. In such instances, the penalty may not exceed 100% of the amount which the Minister considers the payment would have been had it been received.

287 Subsection (3) addresses penalties under section 50(1)(b), stating that the penalty must not exceed the greater of 100% of the loss incurred by the public authority or, if higher, 100% of the benefit obtained by the individual as a result of the fraud in question.

52
Amount of penalty relating to fraud
 
 
(1)
A penalty imposed on a person under section 50 (a) may not exceed 100% of
 
 
the payment to which it relates.
35
 
(2)
Where a penalty is imposed under section 50 (a) in relation to conduct which
 
 
does not result in a person receiving a payment, subsection (1) is to be read
 
 
as if the reference to “the payment” were to the payment which, in the opinion
 

Page 30

 
of the Minister, a person would have received if a payment had been made
 
 
in consequence of the conduct.
 
 
(3)
A penalty imposed on a person under section 50 (b) may not exceed 100%
 
 
of—
 
 
(a)
any loss caused to the public authority, or
5
 
(b)
if higher, the benefit gained by the person,
 
 
as a result of the fraud in question.
 
"Penalty for failing to comply with requirements"

Source Bill 167 EN 2024-25

288 This clause allows the Minister to impose a penalty for a failure to comply with a requirement imposed by or under Chapters 2 or 4, concerning investigatory powers and recovery, respectively. The decision to impose such a penalty must be made by an authorised officer. A failure to comply with a requirement imposed by or under Chapter 2 may include: non-compliance with an information notice, using information shared by the Minister for purposes other than the purpose for which it was disclosed (without the consent of the Minister), or disclosing information received from the Minister to another person without the consent of the Minister. In relation to Chapter 4, a penalty may be imposed for a failure to comply with a requirement which may include: a bank failing to comply with an information notice request; a bank failing to comply with the terms of a direct deduction order; a liable person doing something to frustrate the effect of a direct deduction order; or an employer failing to comply with a deduction from earnings order.

53
Penalty for failing to comply with requirements
 
 
The Minister may impose a penalty on a person where the Minister considers
 
 
that the person has, without reasonable excuse, failed to comply with—
10
 
(a)
a requirement imposed by or under Chapter 2 (investigatory powers),
 
 
or
 
 
(b)
a requirement imposed by or under Chapter 4 (methods of recovery).
 
"Application to members etc of bodies"

Source Bill 167 EN 2024-25

289 This clause extends the imposition of penalties to relevant individuals within bodies that, without reasonable excuse, fail to comply with the requirements mentioned in clause 54. If a body is non-compliant and a relevant individual failed to prevent this non-compliance, without reasonable excuse, both the body and the individual may be penalised. The term "relevant individual" is defined in clause 51.

54
Application to members etc of bodies
 
 
(1)
Subsection (2) applies where the Minister considers that—
15
 
(a)
a body has, without reasonable excuse, failed to comply with a
 
 
requirement mentioned in section 53 , and
 
 
(b)
a relevant individual in relation to the body has, without reasonable
 
 
excuse, failed to prevent that failure.
 
 
(2)
The Minister may impose a penalty under section 53 on the individual as
20
 
well as on the body.
 
 
(3)
In this section, “relevant individual” in relation to a body has the same
 
 
meaning that it has in section 51 .
 
"Amount of penalty for failing to comply with requirements"

Source Bill 167 EN 2024-25

290 This clause specifies the amount of penalty that may be imposed for failing to comply with requirements imposed by or under Chapter 2 or Chapter 4. Subsection (1) specifies that the penalty for non-compliance with a requirement to provide information must be calculated based on a daily rate of £300.

291 Subsection (2) specifies that for non-compliance with any other requirement imposed by or under Chapter 2 or Chapter 4, the penalty must be a fixed amount of £300.

292 Subsection (3) specifies that the daily rate in subsection (1) will be applied for each day the failure continues, commencing on the day after the deadline for compliance passes.

293 Subsections (4) and (5) give the Minister power to amend the penalty amounts in this clause by regulations to reflect monetary value changes, with such regulations subject to the negative procedure.

55
Amount of penalty for failing to comply with requirements
 
 
(1)
A penalty imposed for a failure to comply with a requirement to provide
25
 
information imposed by or under Chapter 2 or Chapter 4 must be an amount
 
 
calculated by reference to a daily rate of £300.
 
 
(2)
Any other penalty for a failure to comply with a requirement imposed by or
 
 
under Chapter 2 or Chapter 4 must be a fixed amount of £300.
 
 
(3)
In this section, references to a “daily rate” in relation to a person’s failure to
30
 
provide information are to an amount that may be imposed for each day by
 
 
the end of which the information has not been provided, beginning with the
 
 
last day on which compliance would have resulted in a penalty not being
 
 
payable.
 
 
(4)
The Minister may by regulations amend the amounts mentioned in subsections
35
 
(1) and (2) for the time being to reflect a change in the value of money.
 
 
(5)
Regulations under subsection (4) are subject to the negative procedure.
 

Page 31

"Procedural rights"

Source Bill 167 EN 2024-25

294 This clause, along with clauses 57 and 58, outlines the steps required before the Minister may impose a penalty.

295 Subsection (2) requires that a notice of intent be given to any person facing a penalty, inviting them to make representations.

296 Subsection (3) specifies the information that must be included in the notice of intent.

297 Subsection (4) mandates a minimum period of 28 days during which individuals and businesses may make representations.

298 Subsection (5) obliges an authorised officer to consider any representations made and decide accordingly about any impact on the proposed penalty.

299 Subsection (6) ensures that if a decision is made that a penalty will not be imposed, a notice to that effect must be given.

56
Procedural rights
 
 
(1)
This section and sections 57 and 58 set out steps that must be taken before
 
 
the Minister may impose a penalty on a person under section 50 or 53 .
 
 
(2)
Where the Minister proposes that a person should be given a penalty under
 
 
section 50 or 53 , the Minister must give the person a notice (a “notice of
5
 
intent”) inviting them to make representations about the proposed penalty.
 
 
(3)
The notice of intent must include—
 
 
(a)
the amount of the proposed penalty,
 
 
(b)
the reasons for the penalty being of that amount, and
 
 
(c)
the means by which, and the period within which, representations
10
 
may be made.
 
 
(4)
The period must be at least 28 days beginning with the day after the day on
 
 
which the notice is given.
 
 
(5)
The Minister must—
 
 
(a)
consider any representations received in accordance with the notice,
15
 
and
 
 
(b)
in light of those representations—
 
 
(i)
decide whether to impose the penalty, and
 
 
(ii)
make any changes to the terms of the proposed penalty that
 
 
the Minister considers appropriate.
20
 
(6)
Where the Minister decides not to impose a penalty on the person, the Minister
 
 
must give the person a notice to that effect.
 
"Penalty decision notices"

Source Bill 167 EN 2024-25

300 Subsection (1) provides that a penalty decision notice must be issued where an authorised officer has decided that a penalty should be imposed.

301 Subsection (2) specifies the mandatory content of a penalty decision notice, including that recipients have 28 days to request a review of the decision to issue the penalty decision notice.

302 Subsection (3) ensures that, if a review is requested within the 28 days, a penalty may not be imposed until after the review has been carried out.

303 Subsection (4) states that if no review is requested, the penalty may be imposed after the stipulated 28-day period.

57
Penalty decision notices
 
 
(1)
Where the Minister decides to impose a penalty on the person, the Minister
 
 
must give the person a penalty decision notice.
25
 
(2)
A penalty decision notice is a notice—
 
 
(a)
informing the person of the decision that a penalty should be imposed
 
 
on the person,
 
 
(b)
stating the amount of the penalty,
 
 
(c)
setting out the reasons for the penalty being of that amount,
30
 
(d)
explaining that the person can apply for a review of the decision within
 
 
the period of 28 days beginning with the day after the day on which
 
 
the decision notice is given, and
 
 
(e)
explaining that if the person does not seek a review within that period,
 
 
the penalty notice will be given after the end of that period.
35
 
(3)
If a review of the decision is requested in accordance with the penalty decision
 
 
notice, the penalty may not be imposed until after a review has been carried
 
 
out.
 

Page 32

 
(4)
If no such review is requested, the penalty may be imposed after the period
 
 
mentioned in subsection (2) (d) .
 
"Reviews and decisions"

Source Bill 167 EN 2024-25

304 Subsection (1) is self-explanatory.

305 Subsection (2) specifies the three possible outcomes of a review.

306 Subsection (3) requires that, if the decision to uphold the penalty is made, the Minister must issue a notice to that effect, noting the right to appeal under clause 60.

307 Subsection (4) requires that, if a decision to cancel a penalty decision notice is made, the Minister must issue a notice to that effect.

58
Reviews and decisions
 
 
(1)
Where a review of the decision that a penalty should be imposed is requested
 
 
following receipt of a penalty decision notice, the Minister must carry out a
5
 
review of that decision.
 
 
(2)
On a review, the Minister may—
 
 
(a)
uphold the decision to impose the penalty and the amount of the
 
 
penalty,
 
 
(b)
uphold the decision to impose the penalty but change its amount, or
10
 
(c)
cancel the decision to impose a penalty.
 
 
(3)
Where the Minister makes a decision within subsection (2) (a) or (b) , the
 
 
Minister must—
 
 
(a)
give the person a notice in accordance with section 59 , and
 
 
(b)
inform the person of the right of appeal under section 60 .
15
 
(4)
Where the Minister makes a decision within subsection (2) (c) , the Minister
 
 
must give the person a notice to that effect.
 
"Penalty notices"

Source Bill 167 EN 2024-25

308 Subsection (1) confirms that penalties are imposed via the issue of a penalty notice requiring a person to pay a specified amount to the Minister on or before a specified day.

309 Subsection (2) prohibits issuing a person with more than one penalty for the same fraud or failure to comply.

310 Subsection (3) provides that where a person has received a penalty notice under section 53, and the penalty is based on a daily rate, each day they fail to provide the information is considered a separate omission.

311 Subsection (4) clarifies that 'specified' in subsection (1) means specified within the penalty notice.

59
Penalty notices
 
 
(1)
A penalty under section 50 or 53 is imposed by giving a person a notice (a
 
 
“penalty notice”) requiring the person to pay a penalty of a specified amount
20
 
to the Minister on or before a specified day.
 
 
(2)
A person may not be given more than one penalty notice in respect of the
 
 
same act or omission.
 
 
(3)
Where a person is liable under section 53 to a penalty for a failure to provide
 
 
information, and the penalty is calculated by reference to a daily rate, the
25
 
failure to provide information by the end of each day in relation to which
 
 
the daily rate accrues is to be treated as a separate omission for the purposes
 
 
of subsection (2) .
 
 
(4)
In this section, “specified” means specified in the penalty notice.
 
"Appeals"

Source Bill 167 EN 2024-25

312 Subsection (1) grants the right to appeal to an appropriate court (defined in subsection (9)).

313 Subsection (2) specifies the timeframe for filing an appeal.

314 Subsection (3) provides that the appropriate court may vary, uphold, or revoke a penalty.

315 Subsections (4) and (5) clarify the appropriate court's role where court proceedings other than an appeal against a penalty notice have reached a final determination on the question of whether the person to whom the notice was given carried out or conspired to carry out the fraud to which the penalty notice relates. For the purposes of the appeal against a penalty notice, that final determination is determinative as to whether fraud was committed.

316 Subsections (6), (7) and (8) give the Minister power to make further provisions about appeals against penalty notices by way of regulations, subject to the negative procedure. This power does not allow the Minister to repeal the right of appeal.

60
Appeals
30
 
(1)
A person may appeal against a penalty notice to the appropriate court.
 
 
(2)
An appeal must be brought within the period of 28 days beginning with the
 
 
day after the day on which the Minister complies with section 58 (3) .
 
 
(3)
On an appeal under subsection (1) , the appropriate court may—
 
 
(a)
uphold the penalty notice,
35
 
(b)
revoke the penalty notice, or
 
 
(c)
amend the penalty notice.
 

Page 33

 
(4)
Subsection (5) applies where—
 
 
(a)
an appeal is against a penalty notice under section 50 (penalty relating
 
 
to fraud), and
 
 
(b)
court proceedings other than an appeal against a penalty notice have
 
 
reached a final determination, on at least the balance of probabilities,
5
 
that the person to whom the notice was given—
 
 
(i)
carried out or conspired to carry out, or
 
 
(ii)
in a case to which section 51 applies, consented to or connived
 
 
in the act or omission which constituted,
 
 
the fraud to which the penalty relates.
10
 
(5)
For the purposes of the appeal against a penalty notice, that final
 
 
determination is determinative of the question whether the person carried
 
 
out the fraud.
 
 
(6)
The Minister may by regulations make further provision about appeals against
 
 
a penalty notice.
15
 
(7)
The regulations may, among other things, provide for appeals to be heard at
 
 
the same time as proceedings mentioned in section 10 (1) (a) (proceedings to
 
 
recover a recoverable amount).
 
 
(8)
Regulations under this section are subject to the negative procedure.
 
 
(9)
In this section, “the appropriate court” means—
20
 
(a)
the First-tier Tribunal, or
 
 
(b)
such other court or tribunal as may be specified in regulations under
 
 
this section.
 
"Interest"

Source Bill 167 EN 2024-25

317 This clause outlines the circumstances in which interest may be payable on monetary penalties.

318 Subsection (1) states that late payment interest is applied daily from the interest start day until payment is made.

319 Subsection (2) defines the interest start day as the day after the due date specified in the penalty notice.

320 Subsection (3) determines the interest rate as 2.5 percentage points above the Bank of England's rate applicable to the day.

321 Subsection (4) confirms that the Bank of England's rate is as determined by the most recent meeting of the Bank's Monetary Policy Committee prior to the day.

322 Subsection (5) clarifies that interest does not accrue on the late payment interest itself, i.e., there is no compound interest.

61
Interest
 
 
(1)
An amount payable by a person in accordance with a penalty notice carries
25
 
interest (“late payment interest”) for each day in the period beginning with
 
 
the interest start day and ending with the day of payment.
 
 
(2)
The interest start day is the day after the specified day included in a penalty
 
 
notice in accordance with section 59 (1) .
 
 
(3)
The late payment interest rate applicable to a day in the interest period is the
30
 
percentage per year found by adding 2.5 to the Bank of England rate
 
 
applicable to the day.
 
 
(4)
The Bank of England rate applicable to a day is the official bank rate
 
 
announced by the Bank of England Monetary Policy Committee at its most
 
 
recent meeting prior to the day.
35
 
(5)
Late payment interest is not payable on late payment interest.
 

Page 34

"Code of practice"

Source Bill 167 EN 2024-25

323 This clause mandates the issuance of a code of practice for penalty administration.

324 Subsection (1) mandates that the Minister must issue a code of practice regarding how penalties will be administered, including how decisions will be made to issue penalties and how amounts will be determined.

325 Subsection (2) mandates that the code of practice must include provision regarding penalty discounts due to cooperative conduct by the person on whom the penalty is imposed.

326 Subsection (3) allows the Minister to revise or reissue the code.

327 Subsection (4) mandates that the Minister must lay the code, or any revised or reissued code, before Parliament.

62
Code of practice
 
 
(1)
The Minister must issue a code of practice about the administration of penalties
 
 
under section 50 , including about the making of decisions about the imposition
 
 
and amount of a penalty.
 
 
(2)
The code of practice must include provision about circumstances in which,
5
 
and the extent to which, the Minister considers that it would be appropriate
 
 
to discount the amount of a penalty as a result of cooperative conduct by the
 
 
person on whom the penalty is imposed.
 
 
(3)
The Minister may from time to time revise and reissue the code of practice.
 
 
(4)
The Minister must lay the code of practice, or any reissued code of practice,
10
 
before Parliament.
 
"Penalties and criminal proceedings or convictions"

Source Bill 167 EN 2024-25

328 This clause outlines the relationship between penalties and criminal proceedings, ensuring a person is not penalised twice for the same act or omission.

329 Subsection (1) prohibits issuing a penalty notice if a person has been found guilty of an offence related to the same act or omission.

330 Subsection (2) prevents a person from being found guilty of an offence if a penalty has already been paid in response to a penalty notice given in relation to the same act or omission.

63
Penalties and criminal proceedings or convictions
 
 
(1)
The Minister may not give a penalty notice to a person under section 50 in
 
 
relation to an act or omission which constitutes an offence if the person has,
 
 
in relation to that act or omission, been found guilty of that offence.
15
 
(2)
A person may not be found guilty of an offence in relation to an act or
 
 
omission if the person has paid a penalty in response to a penalty notice
 
 
given under section 50 in relation to that act or omission.
 

Chapter 6

 

General

20
"Independent review"

Source Bill 167 EN 2024-25

331 This clause mandates the appointment of an independent person to review the exercise of the powers conveyed in this legislation. An independent person can refer to an individual, office or body. In respect of this clause the intention is, in addition to reviews by other statutory bodies as applicable, create a new Independent Chair, to whom a new internal oversight team will report.

332 Subsection (1) requires the Minister to appoint an independent person for conducting such reviews.

333 Subsection (2) specifies that following each review, a report must be prepared and submitted to the Minister, while subsection (3) obligates the Minister to publish the report and lay a copy before Parliament.

334 Subsection (4) defines the nature of the reviews. They should consider whether the exercise of the powers is in keeping with the legislation, codes of practice and relevant guidance, as well as being effective in pursuit of meeting the core functions of the bill: investigating suspected fraud against public authorities; recovering relevant amounts in respect of a public authority's losses; and taking enforcement action in connection with fraud against public authorities.

335 Subsection (5) mandates the independent person to include in their report any recommendations they feel appropriate from said review.

336 Subsection (6) defines the terms in this clause.

64
Independent review
 
 
(1)
The Minister must appoint an independent person to carry out reviews of
 
 
the exercise of the Minister’s functions under this Part.
 
 
(2)
After each review, the independent person must as soon as practicable—
 
 
(a)
prepare a report on the review, and
25
 
(b)
submit the report to the Minister.
 
 
(3)
On receiving a report, the Minister must—
 
 
(a)
publish it, and
 
 
(b)
lay a copy before Parliament.
 
 
(4)
Each review must consider the extent to which—
30
 
(a)
functions under this Part have been exercised in compliance with the
 
 
requirements of this Part, relevant codes of practice and relevant
 
 
guidance, and
 
 
(b)
the exercise of those functions has been effective in delivering the
 
 
Minister’s functions under section 1 (1) (a) to (c) .
35
 
(5)
Each report must contain any recommendations which the independent person
 
 
considers appropriate in light of the review to which it relates.
 

Page 35

 
(6)
In subsection (4) (b) , “relevant codes of practice” and “relevant guidance” mean
 
 
codes of practice and guidance to which the Minister must have regard in
 
 
exercising functions under this Part.
 
65
Independent review: further provision
 
 
(1)
The Minister may give the independent person appointed under section 64 (1)
5
 
directions as to the period to be covered by each review carried out under
 
 
section 64 .
 
 
(2)
The Minister must consult the independent person before giving a direction
 
 
under subsection (1) .
 
 
(3)
The Minister may disclose information to the independent person, or to a
10
 
person acting on behalf of the independent person, for the purposes of reviews
 
 
being carried out under section 64
 
 
(4)
The Minister may by regulations confer functions on a person for the purposes
 
 
of securing compliance with section 64 .
 
 
(5)
Regulations under subsection (4) are subject to the negative procedure.
15
66
Authorised officers
 
 
(1)
The following decisions, if not made by the Minister personally, may be made
 
 
only by an individual authorised by the Minister for the purposes of this
 
 
section (an “authorised officer”)—
 
 
(a)
deciding to give an information notice under section 3 (2) ;
20
 
(b)
deciding to give a recovery notice under section 11 (1) ;
 
 
(c)
deciding to make a direct deduction order under section 17 (1) ;
 
 
(d)
deciding to vary a direct deduction order under section 29 (1) ;
 
 
(e)
deciding to make a deduction from earnings order under section 38 (1) ;
 
 
(f)
deciding to vary a deduction from earnings order under section 46 ;
25
 
(g)
deciding to give a notice of intent under section 56 (2) ;
 
 
(h)
deciding to impose a penalty under section 50 or 53 (and give a notice
 
 
for that purpose under section 59 ).
 
 
(2)
Subsection (3) applies where—
 
 
(a)
the Minister is required by virtue of a provision of this Part to review
30
 
a decision mentioned in subsection (1) , and
 
 
(b)
the decision was made by an authorised officer.
 
 
(3)
The review must be carried out by—
 
 
(a)
an authorised officer of a higher grade than the authorised officer who
 
 
made the decision, or
35
 
(b)
the Minister personally.
 
 
(4)
An individual may not be an authorised officer unless the individual is
 
 
employed in the civil service of the state in the Minister’s department.
 

Page 36

67
Disclosure of information etc: interaction with external constraints
 
 
(1)
This section applies in relation to any provision for the processing of
 
 
information made by or under this Part.
 
 
(2)
The provision does not require or authorise any processing of information
 
 
that—
5
 
(a)
contravenes the data protection legislation, or
 
 
(b)
is prohibited by any of Parts 1 to 7 or Chapter 1 of Part 9 of the
 
 
Investigatory Powers Act 2016.
 
 
(3)
But the provision is to be taken into account in determining whether the
 
 
disclosure, obtaining or use of information would contravene the data
10
 
protection legislation.
 
 
(4)
The disclosure of information in accordance with the provision (as read subject
 
 
to subsection (2) ) does not breach—
 
 
(a)
any obligation of confidence owed by the person making the disclosure,
 
 
or
15
 
(b)
any other restriction on the disclosure of information (however
 
 
imposed).
 
 
(5)
The provision does not require or authorise the disclosure or obtaining of
 
 
information in respect of which a claim to legal professional privilege could
 
 
be maintained in legal proceedings without the agreement of the person
20
 
entitled to maintain that claim.
 
 
(6)
A person may not be required under the provision to give information which
 
 
tends to incriminate the person or the person’s spouse or civil partner.
 
 
(7)
In this section, “data protection legislation” and “processing” have the same
 
 
meanings as in the Data Protection Act 2018 (see section 3 of that Act).
25
68
Crown etc application
 
 
(1)
Subject to the following provisions of this section, this Part binds the Crown
 
 
and applies in relation to Crown premises as it applies in relation to any
 
 
other premises.
 
 
(2)
In this section, “Crown premises” means premises held, or used by, or on
30
 
behalf of the Crown.
 
 
(3)
Sections 16 to 37 (recovery orders and recovery from bank accounts) and
 
 
Chapter 5 (penalties) do not bind the Crown.
 
 
(4)
If the Minister or the Secretary of State certifies that it appears appropriate
 
 
in the interests of national security that powers of entry conferred by this
35
 
Part should not be exercisable in relation to Crown premises specified in the
 
 
certificate, those powers are not exercisable in relation to those premises.
 
 
(5)
No power of entry conferred by, or by virtue of, this Part may be exercised
 
 
in relation to—
 

Page 37

 
(a)
land belonging to His Majesty in right of His private estates, or
 
 
(b)
premises occupied for the purposes of either House of Parliament.
 
 
(6)
In subsection (5) (a) , the reference to His Majesty’s private estates is to be read
 
 
in accordance with section 1 of the Crown Private Estates Act 1862.
 
69
The Public Sector Fraud Authority
5
 
Schedule 2 contains provision—
 
 
(a)
setting up the Public Sector Fraud Authority (“the PSFA”), and
 
 
(b)
about the transfer to the PSFA of functions conferred on the Minister
 
 
under this Part.
 
70
Interpretation
10
 
(1)
In this Part—
 
 
“authorised officer” has the meaning given by section 66 ;
 
 
“bank” has the meaning given by section 36 (1) ;
 
 
“claimed amount” has the meaning given by section 10 (1) (a) ;
 
 
“core functions” has the meaning given by section 1 ;
15
 
“direct deduction order” means a regular direct deduction order or a
 
 
lump sum direct deduction order;
 
 
“fraud” includes—
 
 
(a)
the offences in sections 1 and 11 of the Fraud Act 2006 (fraud
 
 
and obtaining services dishonestly), and
20
 
(b)
the offence at common law of conspiracy to defraud;
 
 
“information” means information in the form of a document or in any
 
 
other form;
 
 
“joint account” means an account held by more than one person;
 
 
“liable person” has the meaning given by section 11 (1) ;
25
 
“lump sum direct deduction order” has the meaning given by section
 
 
17 (5) ;
 
 
“the Minister” means the Minister for the Cabinet Office;
 
 
“payable amount” has the meaning given by section 15 ;
 
 
“public authority” means a person with functions of a public nature so
30
 
far as acting in the exercise of those functions;
 
 
“recoverable amount” has the meaning given by section 1 (3) ;
 
 
“regular direct deduction order” has the meaning given by section 17 (4) ;
 
 
“sole account” means an account held by one person;
 
 
“suspected fraud” is conduct which the Minister has reasonable grounds
35
 
to suspect may constitute fraud;
 
 
“working day” means any day other than—
 
 
(a)
Saturday or Sunday, and
 
 
(b)
a day which is a bank holiday under the Banking and Financial
 
 
Dealings Act 1971 in any part of the United Kingdom.
40

Page 38

 
(2)
In this Part, references to giving a notice or other document (however
 
 
expressed), include sending the notice or document by post.
 
 
(3)
For the purposes of this Part—
 
 
(a)
court proceedings (including an appeal) are not finally determined
 
 
until any appeal relating to the proceedings has been withdrawn,
5
 
abandoned or determined (ignoring any possibility of an appeal out
 
 
of time with permission), and
 
 
(b)
a final determination is the determination reached when court
 
 
proceedings are finally determined.
 
71
Regulations
10
 
(1)
Regulations under this Part are to be made by statutory instrument.
 
 
(2)
A power to make regulations under any provision of this Part includes power
 
 
to make—
 
 
(a)
consequential, supplementary, incidental, transitional or saving
 
 
provision;
15
 
(b)
different provision for different purposes.
 
 
(3)
Where regulations under this Part are subject to “the affirmative procedure”,
 
 
the regulations may not be made unless a draft of the statutory instrument
 
 
containing them has been laid before, and approved by a resolution of, each
 
 
House of Parliament.
20
 
(4)
Where regulations under this Part are subject to “the negative procedure”,
 
 
the statutory instrument containing them is subject to annulment in pursuance
 
 
of a resolution of either House of Parliament.
 
 
(5)
Any provision that may be made by regulations under this Part subject to
 
 
the negative procedure may be made in regulations subject to the affirmative
25
 
procedure.
 

Part 2

 

Social security etc

 

Chapter 1

 

Powers to require information

30
72
Information notices
 
 
(1)
The Social Security Administration Act 1992 is amended as follows.
 

Page 39

 
(2)
After section 109B insert—
 
“109BZA
Power to require information: fraud etc
 
 
(1)
An authorised officer may give a person (“P”) a written notice (an
 
 
“information notice”) requiring P to give an authorised officer specified
 
 
information where the officer—
5
 
(a)
has reasonable grounds to suspect that a person has committed,
 
 
is committing or intends to commit a DWP offence, and
 
 
(b)
considers that it is necessary and proportionate to require the
 
 
specified information for a purpose mentioned in section
 
 
109A(2)(c) or (d) (investigating compliance with the relevant
10
 
social security legislation etc).
 
 
(2)
Information may be specified in an information notice only if it relates
 
 
to a person who is identified (by name or description) in the
 
 
information notice as—
 
 
(a)
the person suspected as mentioned in subsection (1) (a) , or
15
 
(b)
a member of that person’s family (within the meaning of Part
 
 
7 of the Contributions and Benefits Act).
 
 
(3)
An authorised officer may require P to give specified information only
 
 
if the officer has reasonable grounds to suspect that P has or is able
 
 
to access the information.
20
 
(4)
An information notice must set out—
 
 
(a)
the identity of (or a means of identifying) the person to whom
 
 
the information requested relates;
 
 
(b)
how, where and the period within which the information must
 
 
be given;
25
 
(c)
information about the consequences of not complying with the
 
 
notice.
 
 
(5)
The power under this section to require P to give information includes
 
 
power to—
 
 
(a)
take copies of or extracts from information;
30
 
(b)
require P to provide information in a specified form;
 
 
(c)
if any specified information is not given to an authorised officer,
 
 
require P to state, to the best of P’s knowledge and belief, both
 
 
where that information is and why it has not been given to an
 
 
authorised officer.
35
 
(6)
Subsection (2E) of section 109B (communications data) applies to an
 
 
information notice under this section as it applies to a notice under
 
 
that section.
 
 
(7)
In this section—
 
 
“information” means information in the form of a document or
40
 
in any other form;
 
 
“specified” means—
 

Page 40

 
(a)
specified, or described, in the information notice, or
 
 
(b)
falling within a category that is specified or described
 
 
in the information notice.
 
 
(8)
Nothing in this section limits the powers conferred on the Secretary
 
 
of State by Schedule 3B.”
5
 
(3)
In section 109A (authorisations for investigators)—
 
 
(a)
in subsection (1), for “109B and 109C below” substitute “109B to 109C”;
 
 
(b)
in subsection (2)(d), at the end insert “or other DWP offences”;
 
 
(c)
in subsection (8), for “109B and 109C below” substitute “109B to 109C”;
 
 
(d)
in subsection (9), for “109B and 109C below” substitute “109B to 109C”.
10
 
(4)
In section 109B (power to require information)—
 
 
(a)
in the heading, at the end insert “: eligibility”;
 
 
(b)
in subsection (1)(a), omit “or (2A)”;
 
 
(c)
in subsection (1)(b), for “109A(2) above” substitute “109A(2)(a) or (b)”;
 
 
(d)
omit the following provisions—
15
 
(i)
subsection (2A);
 
 
(ii)
subsection (2B);
 
 
(iii)
subsection (2C);
 
 
(iv)
subsection (2D);
 
 
(v)
subsection (5);
20
 
(vi)
subsection (6);
 
 
(vii)
subsection (7A);
 
 
(e)
in subsection (7) omit the definitions of—
 
 
(i)
“bank”;
 
 
(ii)
“credit”;
25
 
(iii)
“insurer”;
 
 
(iv)
“residential premises”.
 
 
(5)
In section 109BA (power of the Secretary of State to require electronic access
 
 
to information)—
 
 
(a)
in subsection (1)(a) omit “falling within section 109B(2A)”;
30
 
(b)
in subsection (2)(b), for “109B above” substitute “109B or 109BZA”;
 
 
(c)
in subsection (4), after “109B” insert “or 109BZA”.
 
 
(6)
In section 109C (powers of entry), in subsection (6), for “Subsections (2E) and
 
 
(5) of section 109B apply for the purposes of this section as they apply”
 
 
substitute “Subsection (2E) of section 109B applies for the purposes of this
35
 
section as it applies”.
 
 
(7)
In section 190 (Parliamentary control of orders and regulations), in subsection
 
 
(1) omit paragraph (aza).
 

Page 41

73
Code of practice
 
 
In the Social Security Fraud Act 2001, in section 3 (code of practice about use
 
 
of information powers), in subsection (1)—
 
 
(a)
in the words before paragraph (a), after “of” insert “the powers that
 
 
are exercisable by an authorised officer under section 109BZA of the
5
 
Administration Act.”, and
 
 
(b)
omit paragraphs (a) and (b).
 
74
Eligibility verification
 
 
(1)
The Social Security Administration Act 1992 is amended in accordance with
 
 
subsections (2) to (4) .
10
 
(2)
In Part 7 (information), before section 121E (and the italic heading before it)
 
 
insert—
 
 
“Eligibility verification
 
121DB
Eligibility verification
 
 
Schedule 3B makes provision about a power for the Secretary of State
15
 
to obtain information for the purposes of identifying incorrect payments
 
 
of certain benefits.”
 
 
(3)
In section 190(1) (Parliamentary control of orders and regulations), after
 
 
paragraph (ac) (inserted by section 90 (4) of this Act) insert—
 
 
“(ad)
regulations under paragraph 2 (1) (b) or 19 (2) of Schedule 3B ;”.
20
 
(4)
After Schedule 3A insert, as Schedule 3B , the Schedule in Part 1 of Schedule
 
 
3 to this Act.
 
 
(5)
Part 2 of Schedule 3 to this Act makes amendments to the Proceeds of Crime
 
 
Act 2002.
 
75
Eligibility verification: independent review
25
 
After section 121DB of the Social Security Administration Act 1992 (inserted
 
 
by section 74 of this Act) insert—
 
“121DC
Independent review
 
 
(1)
The Secretary of State must appoint an independent person to carry
 
 
out reviews of the exercise of the Secretary of State’s functions under
30
 
Schedule 3B (eligibility verification measures).
 
 
(2)
After each review, the independent person must as soon as
 
 
practicable—
 
 
(a)
prepare a report, and
 
 
(b)
submit the report to the Secretary of State.
35
 
(3)
On receiving a report, the Secretary of State must—
 

Page 42

 
(a)
publish it, and
 
 
(b)
lay a copy before Parliament.
 
 
(4)
The first review must relate to the period of 12 months beginning with
 
 
the day on which section 74 of the Public Authorities (Fraud, Error
 
 
and Recovery) Act 2025 comes fully into force.
5
 
(5)
Subsequent reviews must relate to subsequent periods of 12 months.
 
 
(6)
Each review must consider the extent to which—
 
 
(a)
the Secretary of State’s exercise of powers under Schedule 3B
 
 
has complied with the requirements of the Schedule and any
 
 
code of practice in force under Part 5 of the Schedule during
10
 
the period,
 
 
(b)
the actions taken by persons given an eligibility verification
 
 
notice have complied with the requirements of Schedule 3B
 
 
, and
 
 
(c)
the exercise of the Secretary of State’s powers under Schedule
15
 
3B has been effective in identifying, or assisting in identifying,
 
 
incorrect payments of relevant benefits during the period
 
 
covered by the review.
 
 
(7)
Regulations may confer functions on a person for the purposes of
 
 
securing compliance with subsections (1) to (6) .
20
121DD
Independent review: further provision
 
 
(1)
The Secretary of State may disclose information to the independent
 
 
person appointed under section 121DC (1) , or to a person acting on
 
 
behalf of the independent person, for the purposes of reviews being
 
 
carried out under section 121DC .
25
 
(2)
Subsection (1) does not authorise the processing of information that—
 
 
(a)
would contravene the data protection legislation;
 
 
(b)
is prohibited by any of Parts 1 to 7 or Chapter 1 of Part 9 of
 
 
the Investigatory Powers Act 2016.
 
 
(3)
But subsection (1) is to be taken into account in determining whether
30
 
the processing of information would contravene the data protection
 
 
legislation.
 
 
(4)
A disclosure of information under subsection (1) (as read subject to
 
 
subsection (2) ) does not breach—
 
 
(a)
any obligation of confidence owed by the person making the
35
 
disclosure, or
 
 
(b)
any other restriction on the disclosure of information (however
 
 
imposed), subject to subsection (2) .
 

Page 43

 
(5)
In this section "the data protection legislation" and “processing” have
 
 
the same meanings as in the Data Protection Act 2018 (see section 3
 
 
of that Act).”
 

Chapter 2

 

Powers of entry, search and seizure etc

5
76
Entry, search and seizure in England and Wales
 
 
(1)
The Social Security Administration Act 1992 is amended as follows.
 
 
(2)
After section 109C insert—
 
“109D
Powers of entry, search and seizure in England and Wales
 
 
(1)
This section confers functions on and in relation to authorised
10
 
investigators by applying provisions of the Police and Criminal
 
 
Evidence Act 1984 (“the 1984 Act”) with modifications.
 
 
(2)
The functions are exercisable only in relation to premises and items
 
 
in England and Wales.
 
 
(3)
The provisions of the 1984 Act listed in subsection (4) apply in relation
15
 
to investigations of DWP offences conducted by authorised
 
 
investigators as they apply in relation to investigations of offences
 
 
conducted by police officers, subject to the modifications in Schedule
 
 
3ZC .
 
 
(4)
The provisions are—
20
 
(a)
section 8(1) to (5) (power of justice of the peace to authorise
 
 
entry and search of premises);
 
 
(b)
section 9(1) and Schedule 1 (special provisions as to access);
 
 
(c)
section 15 (search warrants: safeguards);
 
 
(d)
section 16 (execution of warrants);
25
 
(e)
section 19 (general power of seizure etc);
 
 
(f)
section 20 (extension of powers of seizure to computerised
 
 
information);
 
 
(g)
section 21 (access and copying);
 
 
(h)
section 22 (retention);
30
 
(i)
section 117 (reasonable use of force);
 
 
(j)
sections 10 to 14, 23 and 118 (interpretation provisions), so far
 
 
as necessary for the application of the provisions mentioned
 
 
in paragraphs (a) to (i) .
 
 
(5)
For the purposes of this section and Schedule 3ZC an authorised
35
 
investigator is an individual who is authorised by the Secretary of
 
 
State to exercise the powers conferred by this section.
 
 
(6)
An individual may be so authorised only if the individual—
 

Page 44

 
(a)
is an official of a government department,
 
 
(b)
is a higher executive officer, or
 
 
(c)
has a grade that is equivalent to, or higher than, that of a higher
 
 
executive officer.”
 
 
(3)
After Schedule 3ZB (inserted by section 91 (3) of this Act) insert, as Schedule
5
 
3ZC , the Schedule in paragraph 1 of Schedule 4 to this Act.
 
77
Entry, search and seizure in Scotland
 
 
(1)
The Social Security Administration Act 1992 is amended as follows.
 
 
(2)
After section 109D (inserted by section 76 of this Act) insert—
 
“109E
Powers of entry, search and seizure in Scotland
10
 
Schedule 3ZD confers functions that are exercisable only in relation
 
 
to premises and items in Scotland and that correspond to the functions
 
 
conferred by section 109D in relation to England and Wales.”
 
 
(3)
After Schedule 3ZC (inserted by section 76 (3) of this Act ) insert, as Schedule
 
 
3ZD, the Schedule in paragraph 2 of Schedule 4 to this Act.
15
78
Entry, search and seizure: Crown application
 
 
After section 109E of the Social Security Administration Act 1992 (inserted
 
 
by section 77 of this Act) insert—
 
“109F
Entry, search and seizure: Crown etc application
 
 
(1)
Subject to subsections (2) and (3) , the powers conferred by section
20
 
109D and by Schedule 3ZD , bind the Crown and apply in relation to
 
 
Crown premises as they apply in relation to any other premises.
 
 
(2)
If the Secretary of State certifies that it appears appropriate in the
 
 
interests of national security that powers of entry conferred by this
 
 
Part should not be exercisable in relation to Crown premises specified
25
 
in the certificate, those powers are not exercisable in relation to those
 
 
premises.
 
 
(3)
No power of entry conferred by, or by virtue of, the provisions
 
 
mentioned in subsection (1) may be exercised in relation to—
 
 
(a)
land belonging to His Majesty in right of His private estates,
30
 
or
 
 
(b)
premises occupied for the purposes of either House of
 
 
Parliament.
 
 
(4)
In this section—
 
 
(a)
“Crown premises” means premises held, or used by, or on
35
 
behalf of the Crown, and
 

Page 45

 
(b)
the reference to His Majesty’s private estates is to be read in
 
 
accordance with section 1 of the Crown Private Estates Act
 
 
1862.”
 
79
Offence of delay, obstruction etc
 
 
In the Social Security Administration Act 1992, in section 111 (delay,
5
 
obstruction etc of inspector)—
 
 
(a)
in paragraph (a) of subsection (1), after “officer” insert “, or authorised
 
 
investigator,”, and
 
 
(b)
after subsection (2) insert—
 
 
“(2A)
In subsection (1)(a), “authorised investigator” means an
10
 
individual who is authorised by the Secretary of State to
 
 
exercise the powers conferred by section 109D or Schedule
 
 
3ZD .”
 
80
Disposal of property
 
 
In the Social Security Administration Act 1992, after section 109F (inserted
15
 
by section 78 of this Act) insert—
 
“109G
Disposal of property
 
 
(1)
The appropriate court may, on an application by the Secretary of State
 
 
or a person with an interest in relevant property—
 
 
(a)
order the delivery of the relevant property to the person
20
 
appearing to the court to be its owner, or
 
 
(b)
if its owner cannot be ascertained, make any other order about
 
 
the relevant property.
 
 
(2)
An order under subsection (1) (a) may include provision for the
 
 
Secretary of State to make any changes to the relevant property that
25
 
the court considers necessary for the purpose of avoiding or reducing
 
 
any risk of the relevant property being used in the commission of an
 
 
offence.
 
 
(3)
An order under subsection (1) (b) may not provide for the destruction
 
 
or disposal of relevant property until the end of the period of 6 months
30
 
beginning with the day on which the order is made.
 
 
(4)
An order under subsection (1) (b) (“the first order”) does not prevent
 
 
further applications being made for an order under subsection (1) in
 
 
respect of the relevant property to which the first order applies.
 
 
(5)
Where an order is made following a further application—
35
 
(a)
the order may not provide for the destruction or disposal of
 
 
the relevant property before the end of the period of 6 months
 
 
beginning with the day on which the first order was made,
 
 
but
 

Page 46

 
(b)
the order may otherwise contain such provision as to the timing
 
 
of the destruction or disposal of the relevant property as the
 
 
court thinks fit.
 
 
(6)
In this section—
 
 
“appropriate court” means—
5
 
(a)
in relation to England and Wales, a magistrates’ court,
 
 
and
 
 
(b)
in relation to Scotland, the sheriff;
 
 
“relevant property” means tangible property which has come into
 
 
the possession of the Secretary of State in the course of, or in
10
 
connection with, an investigation into a DWP offence.”
 
81
Amendments to the Criminal Justice and Police Act 2001
 
 
(1)
The Criminal Justice and Police Act 2001 is amended as follows.
 
 
(2)
In section 57 (retention of seized items), in subsection (1), at the end insert—
 
 
“(w)
paragraph 4 (3) of Schedule 3ZD to the Social Security
15
 
Administration Act 1992.”
 
 
(3)
In section 63 (copies), in subsection (2), at the end insert—
 
 
“(j)
paragraph 2 of Schedule 3ZD to the Social Security
 
 
Administration Act 1992.”
 
 
(4)
In Part 1 of Schedule 1 (powers of seizure to which section 50 of the Act
20
 
applies), after paragraph 56 insert—
 
 
“Social Security Administration Act 1992
 
 
56ZA
The power of seizure conferred by paragraph 2 (1) (d) of Schedule
 
 
3ZD to the Social Security Administration Act 1992.”
 
82
Incidents etc in England and Wales
25
 
(1)
Part 2 of the Police Reform Act 2002 (complaints and misconduct) is amended
 
 
as follows.
 
 
(2)
In section 10 (general functions of the Director General of the Independent
 
 
Office for Police Conduct)—
 
 
(a)
in subsection (1), at the end of paragraph (gc) (inserted by section
30
 
9 (2) (a) of this Act) insert “; and
 
 
“(gd)
to carry out such corresponding functions in relation
 
 
to DWP investigators acting in the exercise of functions
 
 
conferred on them by section 109D of the Social Security
 
 
Administration Act 1992 (Police and Criminal Evidence
35
 
Act 1984 powers for DWP investigators).”,
 

Page 47

 
(b)
in subsection (3), after paragraph (bf) (inserted by section 9 (2) (b) of
 
 
this Act) insert—
 
 
“(bg)
any regulations under section 26H of this Act (DWP
 
 
investigators);”, and
 
 
(c)
after subsection (7A) (inserted by section 9 (2) (c) of this Act insert—
5
 
“(7B)
In this section, “DWP investigators” means authorised
 
 
investigators within the meaning given by section 109D of the
 
 
Social Security Administration Act 1992.”
 
 
(3)
After section 26G (inserted by section 9 of this Act) insert—
 
“26H
DWP investigators
10
 
(1)
The Secretary of State may make regulations conferring functions on
 
 
the Director General in relation to DWP investigators acting in the
 
 
exercise of functions conferred on them by section 109D of the Social
 
 
Security Administration Act 1992 (Police and Criminal Evidence Act
 
 
1984 powers for DWP investigators).
15
 
(2)
Regulations under this section may, in particular—
 
 
(a)
apply (with or without modifications), or make provision
 
 
similar to, any provision of or made under this Part;
 
 
(b)
make provision for payment by the Secretary of State to, or in
 
 
respect of, the Office or in respect of the Director General.
20
 
(3)
The Director General and the Parliamentary Commissioner for
 
 
Administration may jointly investigate a matter in relation to which—
 
 
(a)
the Director General has functions by virtue of this section,
 
 
and
 
 
(b)
the Parliamentary Commissioner for Administration has
25
 
functions by virtue of the Parliamentary Commissioner Act
 
 
1967.
 
 
(4)
The Secretary of State may disclose information to the Director General
 
 
or to a person acting on the Director General’s behalf, for the purposes
 
 
of the exercise by the Director General or by any person acting on the
30
 
Director General’s behalf, of a DWP complaints function.
 
 
(5)
The Director General and the Parliamentary Commissioner for
 
 
Administration may disclose information to each other for the purposes
 
 
of the exercise of a function—
 
 
(a)
by virtue of this section, or
35
 
(b)
under the Parliamentary Commissioner Act 1967.
 
 
(6)
Regulations under this section may, in particular, make—
 
 
(a)
further provision about the disclosure of information under
 
 
subsection (4) or (5);
 
 
(b)
provision about the further disclosure of information that has
40
 
been so disclosed.
 

Page 48

 
(7)
A disclosure of information authorised by or under this section does
 
 
not breach—
 
 
(a)
any obligation of confidence owed by the person making the
 
 
disclosure, or
 
 
(b)
any other restriction on the disclosure of information (however
5
 
imposed).
 
 
(8)
No provision made by or under this section authorises a disclosure
 
 
of information that—
 
 
(a)
would contravene the data protection legislation (but in
 
 
determining whether a disclosure would do so, the power
10
 
conferred by this section is to be taken into account), or
 
 
(b)
is prohibited by any of Parts 1 to 7 or Chapter 1 of Part 9 of
 
 
the Investigatory Powers Act 2016.
 
 
(9)
In this section—
 
 
“data protection legislation” has the same meaning as in the Data
15
 
Protection Act 2018 (see section 3 of that Act);
 
 
“DWP complaints function” means a function in relation to the
 
 
exercise of functions conferred by section 109D of the Social
 
 
Security Administration Act 1992;
 
 
“DWP investigator” means an authorised investigator within the
20
 
meaning given by section 109D of that Act.”
 
83
Incidents etc in Scotland
 
 
(1)
The Police and Fire Reform (Scotland) Act 2012 (Consequential Provisions
 
 
and Modifications) Order 2013 (S.I. 2013/602) is amended as follows.
 
 
(2)
In Article 2 (interpretation), at the appropriate place insert—
25
 
““DWP investigator” means an authorised investigator within the meaning
 
 
given by paragraph 6 of Schedule 3ZD to the Social Security
 
 
Administration Act 1992;”.
 
 
(3)
In Article 3 (agreements to investigate serious incidents), after paragraph 17B
 
 
insert—
30
 
“(17C)
The Commissioner and the Secretary of State may enter into an
 
 
agreement for the Commissioner to investigate and report, where requested
 
 
to do so by the Secretary of State, on any serious incident involving DWP
 
 
investigators acting in the exercise of functions conferred on them by Schedule
 
 
3ZD to the Social Security Administration Act 1992 (entry, search and seizure
35
 
powers).
 
 
(17D)
A “serious incident involving DWP investigators” has the same
 
 
meaning as a “serious incident involving the police” in section 41B of the
 
 
2006 Act except that “a person serving with the police” means a DWP
 
 
investigator acting in the exercise of functions conferred on them by Schedule
40
 
3ZD to the Social Security Administration Act 1992.”
 

Page 49

 
(4)
In Article 4 (investigation of crimes and deaths), after paragraph (i) insert “;
 
 
“(j)
a DWP investigator acting in the exercise of functions conferred on
 
 
them by Schedule 3ZD to the Social Security Administration Act
 
 
1992.”
 

Chapter 3

5

Further provision relevant to investigatory powers

 
84
DWP offence
 
 
In the Social Security Administration Act 1992, in section 121DA (interpretation
 
 
of Part relating to enforcement), in subsection (5), at the end insert—
 
 
““DWP offence” means—
10
 
(a)
a benefit offence,
 
 
(b)
any other offence relating to a benefit, payment, credit or grant
 
 
in relation to which the Secretary of State with responsibility
 
 
for social security exercises functions (whether or not the
 
 
benefit, payment, credit or grant concerns social security),
15
 
(c)
an offence relating to the allocation or use of a national
 
 
insurance number, and
 
 
(d)
any attempt or conspiracy to commit an offence within
 
 
paragraph (b) or (c) .”
 
85
Disclosure of information etc: interaction with external constraints
20
 
In Part 6 of the Social Security Administration Act 1992 (enforcement), after
 
 
section 109G (inserted by section 80 of this Act) insert—
 
“109H
Disclosure of information etc: interaction with external constraints
 
 
(1)
This section applies in relation to any provision for the processing of
 
 
information made by or under this Part.
25
 
(2)
The provision does not require or authorise any processing of
 
 
information that—
 
 
(a)
contravenes the data protection legislation, or
 
 
(b)
is prohibited by any of Parts 1 to 7 or Chapter 1 of Part 9 of
 
 
the Investigatory Powers Act 2016.
30
 
(3)
But the provision is to be taken into account in determining whether
 
 
the processing of information would contravene the data protection
 
 
legislation.
 
 
(4)
The disclosure of information in accordance with the provision (as
 
 
read subject to subsection (2) ) does not breach—
35
 
(a)
any obligation of confidence owed by the person making the
 
 
disclosure, or
 

Page 50

 
(b)
any other restriction on the disclosure of information (however
 
 
imposed).
 
 
(5)
The provision does not require or authorise the disclosure or obtaining
 
 
of information in respect of which a claim to legal professional
 
 
privilege could be maintained in legal proceedings without the
5
 
agreement of the person entitled to maintain that claim.
 
 
(6)
In the application of subsection (5) in Scotland, the reference to legal
 
 
professional privilege is to be read as a reference to confidentiality of
 
 
communications.
 
 
(7)
A person may not be required under the provision to give information
10
 
which tends to incriminate the person or the person’s spouse or civil
 
 
partner.
 
 
(8)
A person who provides services on a not for profit basis in relation
 
 
to social security, housing (including the provision of temporary
 
 
accommodation) or debt, may not be required under the provision to
15
 
give personal data about the recipients of the services.
 
 
(9)
The provision does not require or authorise the disclosure of—
 
 
(a)
excluded material, or
 
 
(b)
special procedure material,
 
 
within the meanings of the Police and Criminal Evidence Act 1984
20
 
(see sections 11 to 14 of that Act).
 
 
(10)
But subsection (9) is subject to—
 
 
(a)
the provisions of the Police and Criminal Evidence Act 1984
 
 
as applied by section 109D (4) (b) and paragraph 3 (5) of Schedule
 
 
3ZC , and
25
 
(b)
Part 2 of Schedule 3ZD .
 
 
(11)
In this section “the data protection legislation”, “personal data” and
 
 
“processing” have the same meanings as in the Data Protection Act
 
 
2018 (see section 3 of that Act).”
 
86
Giving notices etc
30
 
In the Social Security Administration Act 1992, in section 121DA (interpretation
 
 
of Part relating to enforcement), after subsection (7) insert—
 
 
“(8)
In this Part, references to giving a notice or other document (however
 
 
expressed) include sending the notice or document by post.”
 

Page 51

87
Independent review
 
 
In the Social Security Administration Act 1992, after section 109H (inserted
 
 
by section 85 of this Act) insert—
 
“109I
Independent review
 
 
(1)
The Secretary of State must appoint an independent person to carry
5
 
out reviews of the exercise of functions under sections 109A to 109H
 
 
and Schedule 3ZD (“investigative functions”).
 
 
(2)
After each review, the independent person must as soon as
 
 
practicable—
 
 
(a)
prepare a report on the review, and
10
 
(b)
submit the report to the Secretary of State.
 
 
(3)
On receiving a report, the Secretary of State must—
 
 
(a)
publish it, and
 
 
(b)
lay a copy before Parliament.
 
 
(4)
Each review must consider the extent to which —
15
 
(a)
investigative functions have been exercised in compliance with
 
 
the requirements of provisions mentioned in subsection (1)
 
 
, relevant codes of practice and relevant guidance, and
 
 
(b)
the exercise of those functions has been effective in meeting
 
 
the purposes set out in section 109A(2).
20
 
(5)
Each report must contain any recommendations which the independent
 
 
person considers appropriate in light of the review to which it relates.
 
 
(6)
In subsection (4) (a) , “relevant codes of practice” and “relevant
 
 
guidance” mean codes of practice and guidance to which the Secretary
 
 
of State must have regard in exercising investigative functions.
25
109J
Independent review: further provision
 
 
(1)
The Secretary of State may give the independent person appointed
 
 
under section 109I (1) directions as to the period to be covered by each
 
 
review under section 109I .
 
 
(2)
The Secretary of State must consult the independent person before
30
 
giving a direction under subsection (1) .
 
 
(3)
The Secretary of State may disclose information to the independent
 
 
person, or to a person acting on behalf of the independent person, for
 
 
the purposes of reviews being carried out under section 109I .
 
 
(4)
Regulations may confer functions on a person for the purposes of
35
 
securing compliance with section 109I .
 

Page 52

 
(5)
The Secretary of State may comply with the duty in section 109I (1) by
 
 
appointing different independent persons to carry out reviews in
 
 
relation to the exercise of investigative functions—
 
 
(a)
in England and Wales, and
 
 
(b)
in Scotland.”
5

Chapter 4

 

Overpayments: recovery and enforcement

 
88
Enforcement of non-benefit payments
 
 
In the Social Security Administration Act 1992, after section 71ZH insert—
 
 
“Recovery of non-benefit payments
10
71ZI
Overpayment of non-benefit payments: overview and recovery
 
 
(1)
For the purposes of this section and sections 71ZJ and 71ZK , an
 
 
overpayment of a non-benefit payment occurs where—
 
 
(a)
a person (“P”) misrepresents, or fails to disclose, a material
 
 
fact, and
15
 
(b)
in consequence of the misrepresentation or failure, P or another
 
 
person receives a non-benefit payment, or an amount of a
 
 
non-benefit payment, (whether directly or indirectly) that they
 
 
would not otherwise have received,
 
 
and the “overpayment” is that payment or amount.
20
 
(2)
The overpayment is recoverable from P as if it were an amount
 
 
recoverable under section 71(1) if, in relation to the misrepresentation
 
 
or failure to disclose, P—
 
 
(a)
is convicted of an offence (under this Act or any other
 
 
enactment), or
25
 
(b)
agrees to pay a penalty under section 115A.
 
 
(3)
But subsection (2) is subject to section 71ZJ .
 
 
(4)
The right to recover an overpayment under this section does not affect
 
 
any other right that the Secretary of State may have to recover the
 
 
overpayment (or any other amount in relation to the non-benefit
30
 
payment).
 
 
(5)
In this section and sections 71ZJ and 71ZK , “non-benefit payment”
 
 
has the meaning given by section 121DA(5).
 
 
71ZJ
Overpayment of non-benefit payments: overpayment decision and
 
 
notice
35
 
(1)
Before exercising powers under this Act to recover an overpayment
 
 
of a non-benefit payment from a person (“P”)—
 

Page 53

 
(a)
the Secretary of State must give a notice (an “overpayment
 
 
notice”) to P, and
 
 
(b)
the condition in subsection (5) must be met (opportunity for
 
 
P to challenge the notice).
 
 
(2)
The Secretary of State may give P an overpayment notice only if—
5
 
(a)
P has been convicted of an offence (under this Act or any other
 
 
enactment), or
 
 
(b)
it appears to the Secretary of State that there are grounds to
 
 
institute proceedings against P for an offence (under this Act
 
 
or any other enactment),
10
 
in relation to the overpayment.
 
 
(3)
An overpayment notice must—
 
 
(a)
state the amount that the Secretary of State regards as an
 
 
overpayment,
 
 
(b)
provide the Secretary of State’s reasons for regarding that
15
 
amount as an overpayment,
 
 
(c)
set out the effect of the giving of the overpayment notice, and
 
 
(d)
set out P’s right to seek a review of the notice and the right to
 
 
appeal the outcome of that review (see section 71ZK ).
 
 
(4)
In subsection (3) (c) , the reference to the effect of the giving of the
20
 
overpayment notice is a reference to the Secretary of State’s powers
 
 
to—
 
 
(a)
invite P to agree to a penalty under section 115A in relation
 
 
to the overpayment;
 
 
(b)
recover the overpayment (if P agrees to pay such a penalty, or
25
 
is convicted of an offence, in relation to the overpayment).
 
 
(5)
The condition in this subsection is met where—
 
 
(a)
the time for P to seek a review of the overpayment notice has
 
 
passed without P seeking a review, or
 
 
(b)
if P sought a review of the notice within the time allowed, the
30
 
review has taken place and—
 
 
(i)
the time for P to appeal the outcome of the review has
 
 
passed without P bringing an appeal, or
 
 
(ii)
P’s appeal (including any onward appeal) against the
 
 
outcome of the review has been withdrawn, abandoned
35
 
or finally determined.
 
71ZK
Overpayment of non-benefit payments: reviews and appeals
 
 
(1)
A person (“P”) given an overpayment notice under section 71ZJ may
 
 
apply to the Secretary of State for a review of the notice on the
 
 
following grounds—
40
 
(a)
that there has been no overpayment of a non-benefit payment,
 
 
or
 

Page 54

 
(b)
that the amount stated in the notice is not correct.
 
 
(2)
An application under subsection (1) must be made before the end of
 
 
the period of one month beginning with the day after the day on
 
 
which P was given the notice.
 
 
(3)
On a review, the Secretary of State may—
5
 
(a)
uphold the notice,
 
 
(b)
amend the notice, or
 
 
(c)
revoke the notice.
 
 
(4)
The Secretary of State must notify P of the outcome of the review.
 
 
(5)
Where an overpayment notice is upheld or varied on a review, P may
10
 
appeal to the First-tier Tribunal against the notice on the following
 
 
grounds—
 
 
(a)
that there has been no overpayment, or
 
 
(b)
that the amount stated in the notice is not correct.
 
 
(6)
An appeal under subsection (5) must be brought within the period of
15
 
one month beginning with the day after the day on which P is notified
 
 
of the outcome of the review.
 
 
(7)
The First-tier Tribunal may—
 
 
(a)
uphold the notice,
 
 
(b)
vary the notice, or
20
 
(c)
revoke the notice.”
 
89
Recovery and enforcement mechanisms
 
 
(1)
The Social Security Administration Act 1992 is amended as follows.
 
 
(2)
After section 80 insert—
 
 
“Further provision about recovery
25
80A
Further methods of recovery
 
 
(1)
This section applies in relation to—
 
 
(a)
section 80B (and Schedule 3ZA ) (recovery from a person’s bank
 
 
accounts etc), and
 
 
(b)
section 80C (and Schedule 3ZB ) (disqualification from driving).
30
 
(2)
References to a recoverable amount are to—
 
 
(a)
an amount which is recoverable by virtue of any provision of
 
 
sections 71 to 78, and
 
 
(b)
a penalty which is payable by virtue of any provision of
 
 
sections 115A to 115D.
35
 
(3)
References to a “liable person” are to a person liable to pay a
 
 
recoverable amount.
 

Page 55

 
(4)
Nothing in Schedule 3ZA or Schedule 3ZB affects any other method
 
 
of recovery or enforcement that is available in relation to a recoverable
 
 
amount.
 
 
(5)
The Secretary of State may not exercise a power under Schedule 3ZA
 
 
or Schedule 3ZB for the purpose of recovering an amount from a liable
5
 
person unless the Secretary of State has—
 
 
(a)
given the liable person a reasonable opportunity to settle their
 
 
liability in respect of the amount,
 
 
(b)
notified the liable person that the Secretary of State may
 
 
exercise the power for the purpose of recovering the amount
10
 
if the liable person does not settle their liability in respect of
 
 
the amount, and
 
 
(c)
given the liable person a summary of how the power would
 
 
be exercised.
 
 
(6)
The Secretary of State may not exercise the powers under Schedule
15
 
3ZA in relation to a recoverable amount unless satisfied that it is not
 
 
reasonably possible to recover the amount by way of deductions from
 
 
benefit, deductions from earnings or an adjustment of benefit.
 
 
(7)
The Secretary of State may not exercise the powers under Schedule
 
 
3ZB in relation to a recoverable amount unless satisfied that it is not
20
 
reasonably possible to recover the amount by way of deductions from
 
 
benefit, deductions from earnings, an adjustment of benefit or
 
 
deductions from the person’s bank account.
 
 
(8)
In subsections (6) and (7) —
 
 
“an adjustment of benefit” means an adjustment of benefit under,
25
 
or by virtue of, section 71 or 71ZF;
 
 
“deductions from benefit” means deductions from benefit under,
 
 
or by virtue of, section 71 or 71ZC;
 
 
“deductions from earnings” means deductions from earnings
 
 
under, or by virtue of, section 71 or 71ZD.
30
 
(9)
In subsection (7) , the reference to a deduction from a person’s bank
 
 
account is a reference to a deduction by way of a direct deduction
 
 
order under Schedule 3ZA .”
 
 
(3)
In section 111 (delay, obstruction etc of inspector), in subsection (1)(b), after
 
 
“otherwise than” insert “under Schedule 3ZA , Schedule 3B or”.
35
 
(4)
In section 191 (interpretation), at the appropriate places insert the following
 
 
definitions—
 
 
““ “direct deduction order” has the meaning given by paragraph 1 of
 
 
Schedule 3ZA ;”;
 
 
“ “immediate DWP disqualification order” has the meaning given by
40
 
paragraph 2 (2) of Schedule 3ZB ;”;
 

Page 56

 
“ “lump sum direct deduction order” has the meaning given by paragraph
 
 
1 (5) of Schedule 3ZA ;”;
 
 
“ “regular direct deduction order” has the meaning given by paragraph
 
 
1 (4) of Schedule 3ZA ;
 
 
““suspended DWP disqualification order” has the meaning given by
5
 
paragraph 1 (3) of Schedule 3ZB ;””.
 
90
Recovery from bank accounts etc
 
 
(1)
The Social Security Administration Act 1992 is amended as follows.
 
 
(2)
After section 80A (inserted by section 89 of this Act) insert—
 
“80B
Recovery from bank accounts
10
 
Schedule 3ZA (recovery from bank accounts) makes provision for a
 
 
recoverable amount to be recoverable directly from a person’s bank
 
 
account.”
 
 
(3)
After Schedule 3 insert, as Schedule 3ZA , the Schedule in Schedule 5 to this
 
 
Act.
15
 
(4)
In section 190 (Parliamentary control of orders and regulations), in subsection
 
 
(1), after paragraph (ab) insert—
 
 
“(ac)
regulations making provision in reliance on paragraph 24 (3)
 
 
of Schedule 3ZA ; or”.
 
91
Disqualification from driving
20
 
(1)
The Social Security Administration Act 1992 is amended in accordance with
 
 
subsections (2) and (3) .
 
 
(2)
After section 80B (inserted by section 90 (2) of this Act) insert—
 
“80C
Disqualification from driving
 
 
Schedule 3ZB makes provision for a liable person to be disqualified
25
 
from driving while some or all of a recoverable amount remains
 
 
unrecovered.”
 
 
(3)
After Schedule 3ZA (inserted by section 90 (3) of this Act) insert, as Schedule
 
 
3ZB , the Schedule in Schedule 6 to this Act.
 
 
(4)
The Road Traffic Offenders Act 1988 is amended in accordance with
30
 
subsections (5) to (7) .
 
 
(5)
In section 27 (production of licence), in subsection (3), after “Child Support
 
 
Act 1991” insert “or paragraph 5 of Schedule 3ZB to the Social Security
 
 
Administration Act 1992”.
 
 
(6)
In section 37 (effect of order of disqualification), in subsection (1A), at the
35
 
end of paragraph (a)—
 

Page 57

 
(a)
omit the “or”, and
 
 
(b)
insert—
 
 
“(aa)
the disqualification is for a period shorter than 56 days
 
 
under paragraph 2 of Schedule 3ZB to the Social
 
 
Security Administration Act 1992, or”.
5
 
(7)
In section 42 (removal of disqualification), in subsection (6), after “Act” insert
 
 
“or under paragraph 2 of Schedule 3ZB to the Social Security Administration
 
 
Act 1992”.
 
 
(8)
In the Road Traffic Act 1988, in section 164 (power of constables to require
 
 
production of driving licence etc), in subsection (5), after “required under”
10
 
insert “ paragraph 5 of Schedule 3ZB to the Social Security Administration
 
 
Act 1992,”.
 
92
Code of practice
 
 
In the Social Security Administration Act 1992, after section 80C (inserted by
 
 
section 91 of this Act) insert—
15
“80D
Code of practice
 
 
(1)
The Secretary of State must issue a code of practice about the exercise
 
 
of the Secretary of State’s functions under Schedule 3ZA and Schedule
 
 
3ZB .
 
 
(2)
The code of practice must include provision about—
20
 
(a)
the giving of notices to banks requiring the provision of
 
 
information under Schedule 3ZA ;
 
 
(b)
the processing of information received in response;
 
 
(c)
the circumstances in which penalties may be issued to banks;
 
 
(d)
the circumstances in which the Secretary of State expects to
25
 
exercise functions under Schedule 3ZB .
 
 
(3)
Before issuing the code of practice for the first time, the Secretary of
 
 
State must carry out a public consultation on a draft of the code.
 
 
(4)
The requirement in subsection (3) may be satisfied by public
 
 
consultation carried out before this section comes into force.
30
 
(5)
The Secretary of State may from time to time revise and re-issue the
 
 
code of practice.
 
 
(6)
The Secretary of State must lay the code of practice, or any reissued
 
 
code of practice, before Parliament.”
 

Page 58

93
Rights of audience
 
 
In the Social Security Administration Act 1992, after section 80D (inserted by
 
 
section 92 of this Act) insert—
 
“80E
Rights of audience
 
 
(1)
An officer of the Secretary of State who is authorised by the Secretary
5
 
of State for the purposes of this section has a right of audience and
 
 
the right to conduct litigation in relation to proceedings for or in
 
 
connection with the recovery of overpayments under a provision of
 
 
this Part before—
 
 
(a)
a magistrates’ court,
10
 
(b)
the county court, and
 
 
(c)
the Crown Court.
 
 
(2)
In this section, “right of audience” and “right to conduct litigation”
 
 
have the same meanings as in section 119 of the Courts and Legal
 
 
Services Act 1990.”
15
94
Recovery of costs
 
 
(1)
The Social Security Administration Act 1992 is amended as follows.
 
 
(2)
In section 71ZE, omit subsection (3).
 
 
(3)
After section 80E (inserted by section 93 of this Act) insert—
 
“80F
Recovery of costs
20
 
Any costs which the Secretary of State reasonably incurs in recovering
 
 
an amount that is recoverable under any provision of sections 71 to
 
 
80, Schedule 3ZA or Schedule 3ZB may be recovered by the Secretary
 
 
of State as if they were amounts recoverable under that provision.”
 
95
Recovery: further provision
25
 
(1)
In the Social Security Administration Act 1992, after section 80F (inserted by
 
 
section 94 of this Act) insert—
 
“80G
Recovery: further provision
 
 
(1)
Subsection (2) applies in relation to any provision for the processing
 
 
of information made by or under this Part.
30
 
(2)
The provision does not require or authorise any processing of
 
 
information that—
 
 
(a)
contravenes the data protection legislation, or
 
 
(b)
is prohibited by any of Parts 1 to 7 or Chapter 1 of Part 9 to
 
 
the Investigatory Powers Act 2016.
35

Page 59

 
(3)
But the provision is to be taken into account in determining whether
 
 
the processing of information would contravene the data protection
 
 
legislation.
 
 
(4)
The disclosure of information in accordance with the provision (as
 
 
read subject to subsection (2) ) does not breach—
5
 
(a)
any obligation of confidence owed by the person making the
 
 
disclosure, or
 
 
(b)
any other restriction on the disclosure of information (however
 
 
imposed).
 
 
(5)
In this section, “data protection legislation” and “processing” have the
10
 
same meanings as in the Data Protection Act 2018 (see section 3 of
 
 
that Act).
 
 
(6)
In this Part, references to giving a notice or other document (however
 
 
expressed) include sending the notice or document by post.”
 

Chapter 5

15

Offences and penalties etc

 
96
Offences: non-benefit payments
 
 
(1)
The Social Security Administration Act 1992 is amended as follows.
 
 
(2)
In section 111A (dishonest representations for obtaining benefit etc)—
 
 
(a)
in subsection (1), in the words after paragraph (b), after “legislation”
20
 
insert “or a non-benefit payment”;
 
 
(b)
after subsection (1G) insert—
 
 
“(1H)
For the purposes of subsections (1A) to (1G), references to—
 
 
(a)
a person being entitled to, or having a right to receive,
 
 
a payment under a provision of the relevant social
25
 
security legislation include references to a person being
 
 
entitled to, or having a right to receive, or qualifying
 
 
for, a non-benefit payment, and
 
 
(b)
a person’s entitlement to a payment under a provision
 
 
of the relevant social security legislation include
30
 
references to a person’s entitlement to, or qualification
 
 
for, a non-benefit payment.”
 
 
(3)
In section 112 (false representations for obtaining benefit etc)—
 
 
(a)
after subsection (1) insert—
 
 
“(1ZA)
A person is guilty of an offence if, for the purpose of obtaining
35
 
a non-benefit payment for themselves or another person, they—
 
 
(a)
make a statement or representation which they know
 
 
to be false, or
 

Page 60

 
(b)
produce or furnish, or knowingly cause or knowingly
 
 
allow to be produced or furnished, any document or
 
 
information which they know to be false in a material
 
 
particular.”;
 
 
(b)
after subsection (1F) insert—
5
 
“(1G)
For the purposes of subsections (1A) to (1F), references to—
 
 
(a)
a person being entitled to, or having a right to receive,
 
 
a payment under a provision of the relevant social
 
 
security legislation include references to a person being
 
 
entitled to, or having a right to receive, or qualifying
10
 
for, a non-benefit payment, and
 
 
(b)
a person’s entitlement to a payment under a provision
 
 
of the relevant social security legislation include
 
 
references to a person’s entitlement to, or qualification
 
 
for, a non-benefit payment.”
15
 
(4)
In section 121DA(5) (interpretation of Part 6), at the appropriate place insert—
 
 
““non-benefit payment” means a prescribed payment which—
 
 
(a)
is not a payment of a relevant social security benefit, and
 
 
(b)
is made by the Secretary of State with responsibility for social
 
 
security for the purposes of providing financial assistance to
20
 
a person, whether directly or indirectly.”
 
97
Penalty as alternative to prosecution: extension to non-benefit payments
 
 
(1)
Section 115A of the Social Security Administration Act 1992 (penalty as
 
 
alternative to prosecution) is amended in accordance with subsections (2) to
 
 
(6) .
25
 
(2)
After subsection (1A) insert—
 
 
“(1B)
This section also applies where—
 
 
(a)
an overpayment notice has been given to a person (“P”) under
 
 
section 71ZJ (overpayment notice in relation to non-benefit
 
 
payment), and
30
 
(b)
in relation to the overpayment notice, the condition in
 
 
subsection (1C) is met.
 
 
(1C)
The condition in this subsection is met where—
 
 
(a)
the time for P to seek a review of the overpayment notice under
 
 
section 71ZK has passed without P seeking a review, or
35
 
(b)
if P sought a review of the notice within the time allowed, the
 
 
review has taken place, and—
 
 
(i)
the time for P to appeal the outcome of the review
 
 
under section 71ZK has passed without P bringing an
 
 
appeal, or
40

Page 61

 
(ii)
P’s appeal (including any onward appeal) against the
 
 
outcome of the review has been withrawn, abandoned
 
 
or finally determined.”
 
 
(3)
In subsection (2)(a), after “above” insert “, or in relation to the overpayment
 
 
notice referred to in subsection (1B),”.
5
 
(4)
In subsection (3), after “(1)” insert “or (1B)”.
 
 
(5)
In subsection (8), in the words before paragraph (a), after “section” insert “,
 
 
except in relation to a case referred to in subsection (1B),”.
 
 
(6)
After subsection (8) insert—
 
 
“(8A)
In relation to a case referred to in subsection (1B), “overpayment” has
10
 
the meaning given in section 71ZI (1) .”
 
 
(7)
In section 115B of the Social Security Administration Act 1992 (penalty as
 
 
alternative to prosecution: colluding employers etc), in subsection (2)(b), after
 
 
“benefit offence” insert “or an offence in relation to an overpayment of a
 
 
non-benefit payment”.
15
 
98
Amendments to the Social Security Fraud Act 2001: loss of benefits following
 

penalty

 
 
(1)
The Social Security Fraud Act 2001 is amended as follows.
 
 
(2)
In section 6B(2) (loss of benefits in case of conviction, penalty or caution for
 
 
benefit offence)—
20
 
(a)
in paragraph (a) omit the words from “section 115A” to “or”, and
 
 
(b)
omit sub-paragraph (i) of paragraph (b).
 
 
(3)
In section 6C (section 6B: supplementary provision)—
 
 
(a)
in subsection (2)(b) omit the words “the Social Security Act 1998 or”,
 
 
and
25
 
(b)
in subsection (3) omit the words “the Social Security Act 1998 or”.
 

Part 3

 

General

 
99
Application and limitation
 
 
(1)
Subject to subsection (2) , any function conferred by a provision of this Act
30
 
(including by way of amendments to another enactment) is exercisable—
 
 
(a)
so far as the function relates to investigations or enforcement, in respect
 
 
of things done or not done before the provision comes into force, and
 
 
(b)
so far as the function relates to the recovery of money, for the purposes
 
 
of recovering money which a public authority (whether or not the
35
 
public authority on which the function is conferred) was entitled to
 
 
recover before the provision comes into force.
 

Page 62

 
(2)
Subsection (1) (a) does not apply in relation to the amendments made by—
 
 
(a)
section 96 (offences: non-benefit payments), and
 
 
(b)
section 97 (penalty as alternative to prosecution: extension to
 
 
non-benefit payments).
 
 
(3)
Subsection (4) applies in relation to an action—
5
 
(a)
for an amount that an England and Wales public authority is entitled
 
 
to claim from a person as a result of fraud which the person carried
 
 
out, before the day on which this section comes into force, in
 
 
connection with coronavirus, and
 
 
(b)
in relation to which a limitation period of less than twelve years from
10
 
the date on which the cause of action accrues would otherwise have
 
 
applied.
 
 
(4)
The time limit for bringing the action is twelve years beginning with the day
 
 
on which the England and Wales public authority discovers the fraud or
 
 
could with reasonable diligence discover it (whether that day is before, on
15
 
or after the day on which this section comes into force).
 
 
(5)
For the purposes of subsections (3) and (4) —
 
 
(a)
an “England and Wales public authority” is a person who—
 
 
(i)
exercises functions of a public nature, and
 
 
(ii)
is not a devolved Scottish authority or a devolved Welsh
20
 
authority;
 
 
(b)
an authority is a “devolved Scottish authority” if its functions—
 
 
(i)
are exercisable only in or as regards Scotland, and
 
 
(ii)
are wholly or mainly functions that do not relate to reserved
 
 
matters within the meaning of the Scotland Act 1998;
25
 
(c)
“Welsh devolved authority” has the meaning given in section 157A
 
 
of the Government of Wales Act 2006.
 
 
(6)
For the purposes of subsection (3) , “coronavirus” has the meaning given by
 
 
section 1(1) of the Coronavirus Act 2020.
 
 
(7)
In the Limitation Act 1980, in section 38 (interpretation), in subsection (11)—
30
 
(a)
in paragraph (a), after “1992,” insert “including as amended by the
 
 
Public Authorities (Fraud, Error and Recovery) Act 2025,”,
 
 
(b)
omit “or” at the end of paragraph (b), and
 
 
(c)
at the end of paragraph (c) insert “, or
 
 
“(d)
Part 1 of the Public Authorities (Fraud, Error and
35
 
Recovery) Act 2025,”.
 
100
Power to make consequential provision
 
 
(1)
The Secretary of State or the Minister may by regulations make provision
 
 
that is consequential on this Act.
 

Page 63

 
(2)
Regulations under this section may amend, repeal or revoke provision made
 
 
by or under an Act passed—
 
 
(a)
before this Act, or
 
 
(b)
later in the same session of Parliament as this Act.
 
 
(3)
Regulations under this section are to be made by statutory instrument.
5
 
(4)
A statutory instrument containing regulations under this section that amend
 
 
or repeal provision made by an Act (whether alone or with other provisions)
 
 
may not be made unless a draft of the statutory instrument has been laid
 
 
before, and approved by a resolution of, each House of Parliament.
 
 
(5)
Any other statutory instrument containing regulations under this section is
10
 
subject to annulment in pursuance of a resolution of either House of
 
 
Parliament.
 
101
Financial provision
 
 
There is to be paid out of money provided by Parliament—
 
 
(a)
any expenditure incurred under, or by virtue of, this Act by a Minister
15
 
of the Crown, a person holding office under His Majesty or a
 
 
government department, and
 
 
(b)
any increase attributable to this Act in the sums payable under or by
 
 
virtue of any other Act out of money so provided.
 
102
Extent
20
 
(1)
This Act extends to England and Wales and Scotland, subject as follows.
 
 
(2)
Part 1 of this Act extends to England and Wales only.
 
 
(3)
Any amendment, repeal or revocation made by this Act has the same extent
 
 
as the provision amended, repealed or revoked.
 
103
Commencement
25
 
(1)
Except as provided by subsection (2) , this Act comes into force on such day
 
 
as the Secretary of State or the Minister for the Cabinet Office may by
 
 
regulations appoint.
 
 
(2)
The following provisions come into force on the day on which this Act is
 
 
passed—
30
 
(a)
this Part, and
 
 
(b)
any other provision of this Act so far as it confers power to make
 
 
regulations or is otherwise necessary for enabling the exercise of such
 
 
a power on or after the day on which this Act is passed.
 
 
(3)
Different days may be appointed under subsection (1) for different purposes.
35

Page 64

 
(4)
The Secretary of State or the Minister for the Cabinet Office may by regulations
 
 
make transitional or saving provision in connection with the coming into
 
 
force of any provision of this Act.
 
 
(5)
The power to make regulations under subsection (4) includes power to make
 
 
different provision for different purposes.
5
 
(6)
Regulations under this section are to be made by statutory instrument.
 
104
Short title
 
 
This Act may be cited as the Public Authorities (Fraud, Error and Recovery)
 
 
Act 2025.
 

Page 65

Schedules

 
 
Schedule 1
Section 7
 

Fraud against public authorities: Police and Criminal Evidence Act 1984

 

powers

 

Introduction

5
 
1
This Schedule contains modifications of the provisions of the Police and
 
 
Criminal Evidence Act 1984 mentioned in section 7 (2) for the purposes of
 
 
their application to authorised investigators in accordance with section 7 (1) .
 

General modifications

 
 
2
(1)
Each reference to a constable (however expressed) is to be read as including
10
 
a reference to an authorised investigator.
 
 
(2)
Each reference to an offence is to be read as a reference to an offence of
 
 
fraud against a public authority, except for the reference to an offence in
 
 
section 21(8)(b).
 
 
(3)
Each reference to a criminal investigation is to be read as a reference to a
15
 
criminal investigation in connection with an offence of fraud against a
 
 
public authority.
 

Specific modifications

 
 
3
(1)
Section 15 (search warrants: safeguards) is to be read as if—
 
 
(a)
in subsection (2)(c), for “articles or persons” there were substituted
20
 
“material”;
 
 
(b)
in subsection (6)(b), for “articles or persons” there were substituted
 
 
“material”.
 
 
(2)
Section 16 (execution of warrants) is to be read as if—
 
 
(a)
in subsections (3A) and (3B), for the words “a police officer of at
25
 
least the rank of inspector”, in each case, there were substituted “an
 
 
authorised investigator of at least the grade of senior executive
 
 
officer”;
 
 
(b)
after subsection (3B) there were inserted—
 
 
“(3C)
In subsections (3A) and (3B), the references to an authorised
30
 
investigator of at least the grade of senior executive officer
 
 
include—
 
 
(a)
an authorised investigator who has a grade that is
 
 
equivalent to that of a senior executive officer, and
 
 
(b)
an authorised investigator who is a higher executive
35
 
officer, or has a grade equivalent to that of a higher
 
 
executive officer, who has been authorised in writing
 

Page 66

 
for the purposes of those subsections by an authorised
 
 
investigator who is a grade 7 or has a grade that is
 
 
equivalent to, or higher than, that of a grade 7.”;
 
 
(c)
in subsection (5)(a), the words “, if not in uniform,” were omitted;
 
 
(d)
in subsection (9)(a), for “articles or persons sought were” there were
5
 
substituted “material sought was”.
 
 
(3)
Section 21 (access and copying) is to be read as if in subsection (3)(b), the
 
 
reference to the police were a reference to an authorised investigator.
 
 
(4)
Section 22 (retention) is to be read as if—
 
 
(a)
for subsection (1), there were substituted—
10
 
“(1)
Subject to subsection (4), anything which has been—
 
 
(a)
seized by an authorised investigator,
 
 
(b)
taken away by an authorised investigator following
 
 
a requirement made by virtue of section 19 or 20, or
 
 
(c)
seized or taken away by another person under any
15
 
enactment and accepted by an authorised investigator,
 
 
may be retained so long as is necessary in all the
 
 
circumstances.”;
 
 
(b)
after subsection (2) there were inserted—
 
 
“(2A)
Nothing in subsections (1) or (2) prevents anything lawfully
20
 
seized by an authorised investigator from being accepted
 
 
and retained by a constable.”;
 
 
(c)
for subsection (5) there were substituted—
 
 
“(5)
Nothing in this section affects any power of a court to make
 
 
an order under section 8 of the Public Authorities (Fraud,
25
 
Error and Recovery) Act 2025.”;
 
 
(d)
subsection (6) were omitted.
 
 
Schedule 2
Section 69
 

The Public Sector Fraud Authority

 

Part 1

30

Establishment

 
 
1
(1)
A body corporate called the Public Sector Fraud Authority is established.
 
 
(2)
In this Schedule, references to “the PSFA” are to that body.
 
 
(3)
The PSFA acts on behalf of the Crown.
 

Page 67

Part 2

 

Constitution etc

 

Constitution

 
 
2
(1)
The PSFA is to consist of—
 
 
(a)
a chair, who is to be a non-executive member,
5
 
(b)
at least 3, but not more than 6, other non-executive members,
 
 
(c)
a chief executive, and
 
 
(d)
at least 2, but not more than 5, other executive members.
 
 
(2)
The members are to be appointed in accordance with paragraphs 3 to 6 .
 

Appointment of non-executive members

10
 
3
(1)
The Minister is to appoint the non-executive members.
 
 
(2)
A person may not be appointed as a non-executive member if the person
 
 
is a member of the PSFA’s staff.
 

Appointment of executive members

 
 
4
(1)
The chair is to appoint the chief executive and the other executive members,
15
 
subject to paragraph 5 .
 
 
(2)
The executive members are to be members of the PSFA’s staff.
 

Interim chief executive

 
 
5
(1)
The Minister may appoint a person (an “interim chief executive”) to be the
 
 
PSFA’s chief executive until the appointment of a chief executive by the
20
 
chair under paragraph 4 (1) first takes effect.
 
 
(2)
An interim chief executive may incur expenditure and do other things in
 
 
the name and on behalf of the PSFA until the PSFA is first constituted in
 
 
accordance with paragraph 2 (1) .
 
 
(3)
In exercising the power in sub-paragraph (2) , an interim chief executive
25
 
must act in accordance with any directions given by the Minister.
 
 
(4)
Paragraphs 4 , 7 and 9 do not apply to an interim chief executive.
 

Appointment of members: eligibility

 
 
6
(1)
The Minister may by regulations make provision about criteria which must
 
 
be met by persons in order to be appointed as members of the PSFA.
30
 
(2)
The regulations may make provision for a person to cease to be a member
 
 
of the PSFA if the person no longer meets those criteria.
 
 
(3)
Regulations under this paragraph are subject to the negative procedure.
 

Page 68

Terms of membership

 
 
7
(1)
A member of the PSFA holds and vacates office in accordance with the
 
 
terms of the member’s appointment, subject to provision made by or under
 
 
this Schedule.
 
 
(2)
A member may resign from office by giving notice to the appropriate
5
 
person.
 
 
(3)
A member may be removed from office by notice given by the appropriate
 
 
person on the grounds that the member—
 
 
(a)
has without reasonable excuse failed to discharge the member’s
 
 
functions, or
10
 
(b)
is, in the opinion of the appropriate person, unable or unfit to carry
 
 
out the member’s functions.
 
 
(4)
A person ceases to be—
 
 
(a)
a non-executive member of the PSFA upon becoming a member of
 
 
its staff;
15
 
(b)
an executive member of the PSFA upon ceasing to be a member of
 
 
its staff.
 
 
(5)
In this paragraph, “appropriate person” means—
 
 
(a)
in the case of the non-executive members, the Minister;
 
 
(b)
in the case of the executive members, the chair.
20

Non-executive members: payments

 
 
8
(1)
The PSFA must pay, or make provision for the payment of, such
 
 
remuneration, pensions, allowances or gratuities as the Minister determines
 
 
to or in respect of a person who is or has been a non-executive member.
 
 
(2)
Sub-paragraph (3) applies if—
25
 
(a)
a person ceases to be a non-executive member, and
 
 
(b)
the Minister determines that the person should be compensated
 
 
because of special circumstances.
 
 
(3)
Where this sub-paragraph applies, the PSFA must pay the person
 
 
compensation of such amount as the Minister may determine.
30

Staffing

 
 
9
(1)
The PSFA may—
 
 
(a)
appoint employees, and
 
 
(b)
make such other arrangements for the staffing of the PSFA as it
 
 
determines.
35
 
(2)
The PSFA must pay its staff such remuneration as may be determined in
 
 
accordance with this paragraph.
 
 
(3)
The PSFA must pay, or make provision for the payment of, such pensions,
 
 
allowances, gratuities or compensation as may be determined in accordance
 

Page 69

 
with this paragraph to or in respect of any person who is or has been a
 
 
member of staff of the PSFA.
 
 
(4)
Members of staff of the PSFA are to be appointed on such other terms as
 
 
may be determined in accordance with this paragraph.
 
 
(5)
A matter is determined in accordance with this paragraph if—
5
 
(a)
in the case of a matter which relates to an executive member, it is
 
 
determined by the chair;
 
 
(b)
in the case of a matter which relates to any other member of staff,
 
 
it is determined by the PSFA.
 
 
(6)
Before making a determination as to remuneration, pensions, allowances,
10
 
gratuities or compensation for the purposes of sub-paragraph (2) or (3),
 
 
the PSFA must obtain the approval of the Minister as to its policy on that
 
 
matter.
 

Discharge of functions etc

 
 
10
(1)
The PSFA must have regard to the need to exercise its functions effectively,
15
 
efficiently and economically.
 
 
(2)
The PSFA may authorise the following to exercise any of its functions—
 
 
(a)
a member of the PSFA,
 
 
(b)
a member of the PSFA’s staff authorised for that purpose, or
 
 
(c)
a committee or sub-committee.
20
 
(3)
An authorisation may be to such extent and on such terms as the PSFA
 
 
determines.
 
 
(4)
The PSFA may pay such remuneration and allowances as it may determine
 
 
to any person who—
 
 
(a)
is a member of a committee or a sub-committee, but
25
 
(b)
is not a member of staff of the PSFA,
 
 
whether or not that person is a non-executive member of the PSFA.
 

Procedure

 
 
11
(1)
The PSFA may determine its own procedure and the procedure of any of
 
 
its committees or sub-committees.
30
 
(2)
The validity of any proceedings of the PSFA, or any committee or
 
 
sub-committee of the PSFA, is not affected by any vacancy among its
 
 
members or by any defect in the appointment of such a member.
 

Annual report

 
 
12
(1)
As soon as reasonably practicable after the end of each financial year the
35
 
PSFA must prepare a report on the exercise of its functions during that
 
 
financial year.
 
 
(2)
The PSFA must send the report to the Minister.
 

Page 70

 
(3)
The Minister must lay the report before Parliament and publish it.
 
 
(4)
In this Schedule, “financial year” means—
 
 
(a)
the period beginning with the date on which the PSFA is established
 
 
and ending with 31 March following that date, and
 
 
(b)
each successive period of 12 months.
5

Seal and evidence

 
 
13
(1)
The application of the PSFA’s seal must be authenticated by a signature
 
 
of—
 
 
(a)
a member of the PSFA, or
 
 
(b)
another person authorised for that purpose by the PSFA.
10
 
(2)
A document purporting to be duly executed under the PSFA’s seal or
 
 
signed on its behalf—
 
 
(a)
is to be received in evidence, and
 
 
(b)
is to be taken to be executed or signed in that way, unless the
 
 
contrary is shown.
15
 
(3)
But this paragraph does not apply in relation to any document which is,
 
 
or is to be, signed in accordance with the law of Scotland.
 

Supplementary powers

 
 
14
(1)
Subject to sub-paragraph (2) , the PSFA may do anything it thinks necessary
 
 
or expedient for the purposes of, or in connection with, the exercise of its
20
 
functions.
 
 
(2)
The PSFA may not—
 
 
(a)
borrow money;
 
 
(b)
accept gifts of money, land or other property.
 

Transfer schemes

25
 
15
(1)
The Minister may make one or more schemes (“transfer schemes”) for the
 
 
purpose of transferring to the PSFA such property, rights and liabilities of
 
 
a relevant person as the Minister considers appropriate for the purposes
 
 
of enabling the PSFA to exercise functions transferred to it by regulations
 
 
under paragraph 21 .
30
 
(2)
In this paragraph, “relevant person” means—
 
 
(a)
the Secretary of State,
 
 
(b)
the Minister, or
 
 
(c)
the Chancellor of the Duchy of Lancaster.
 
 
(3)
The things that may be transferred under a transfer scheme include—
35
 
(a)
property, rights and liabilities that could not otherwise be
 
 
transferred;
 

Page 71

 
(b)
property acquired, and rights and liabilities arising, after the making
 
 
of the scheme;
 
 
(c)
criminal liabilities.
 
 
(4)
A transfer scheme may make supplementary, incidental, transitional or
 
 
consequential provision and may, in particular—
5
 
(a)
create rights, or impose liabilities, in relation to property or rights
 
 
transferred;
 
 
(b)
make provision about the continuing effect of things done by a
 
 
relevant person in respect of anything transferred;
 
 
(c)
make provision about the continuation of things (including legal
10
 
proceedings) in the process of being done by, on behalf of, or in
 
 
relation to, a relevant person in respect of anything transferred;
 
 
(d)
make provision for the shared ownership or use of property;
 
 
(e)
make provision which is the same as or similar to the Transfer of
 
 
Undertakings (Protection of Employment) Regulations 2006 (S.I.
15
 
2006/246);
 
 
(f)
make other supplemental, incidental, transitional or consequential
 
 
provision.
 
 
(5)
A transfer scheme may provide for—
 
 
(a)
modifications by agreement;
20
 
(b)
modifications to have effect from the date when the original scheme
 
 
came into effect.
 
 
(6)
For the purposes of this paragraph—
 
 
(a)
references to rights and liabilities include rights and liabilities
 
 
relating to a contract of employment;
25
 
(b)
references to the transfer of property include the grant of a lease.
 
 
(7)
For the purposes of sub-paragraph (6) —
 
 
(a)
an individual who holds employment in the civil service is to be
 
 
treated as employed by virtue of a contract of employment, and
 
 
(b)
the terms of the individual’s employment in the civil service are to
30
 
be regarded as constituting the terms of the contract of employment.
 

Amendments to other enactments

 
 
16
In Part 2 of the table in paragraph 3 of Schedule 1 to the Public Records
 
 
Act 1958 (definition of public records), at the appropriate place insert—
 
 
“Public Sector Fraud Authority.”
35
 
17
In Schedule 2 to the Parliamentary Commissioner Act 1967 (departments
 
 
etc subject to investigation), at the appropriate place insert—
 
 
“Public Sector Fraud Authority.”
 

Page 72

 
18
In Part 2 of Schedule 1 to the House of Commons Disqualification Act 1975
 
 
(bodies of which all members are disqualified), at the appropriate place
 
 
insert—
 
 
“The Public Sector Fraud Authority.”
 
 
19
In Part 6 of Schedule 1 to the Freedom of Information Act 2000 (public
5
 
authorities to which that Act applies), at the appropriate place insert—
 
 
“The Public Sector Fraud Authority.”
 
 
20
In Part 1 of Schedule 19 to the Equality Act 2010 (authorities subject to the
 
 
public sector equality duty), after the group of entries under the heading
 
 
“Environment, housing and development” insert—
10

“Fraud against the public sector

 
 
The Public Sector Fraud Authority.”
 

Part 3

 

Transfer of functions etc

 
 
21
(1)
The Minister may by regulations—
15
 
(a)
provide for all or any of the functions conferred by Chapters 1 to
 
 
5 of Part 1 of this Act (including functions conferred by an
 
 
amendment of another enactment)—
 
 
(i)
on the Minister, to be transferred to the PSFA;
 
 
(ii)
on authorised officers of the Minister, to be transferred to
20
 
authorised officers of the PSFA;
 
 
(b)
make further provision about the application, with any necessary
 
 
modifications, of Part 1 of this Act in relation to the PSFA;
 
 
(c)
provide for the Minister to give the PSFA general or specific
 
 
directions about the exercise of its functions.
25
 
(2)
The references to functions in sub-paragraph (1) (a) do not include any
 
 
power or duty to make regulations or issue a code of practice.
 
 
(3)
Where, as a result of a provision of Chapters 1 to 5 of Part 1 of this Act, a
 
 
function is to be exercised by an authorised officer of the Minister of a
 
 
particular grade, rank or description (if not exercised by the Minister
30
 
personally), regulations made in reliance on sub-paragraph (1) (a) (ii) must
 
 
provide for the function to be exercised by an authorised officer of the
 
 
PSFA of a corresponding grade, rank or description.
 
 
(4)
Regulations under sub-paragraph (1) may amend—
 
 
(a)
Part 1 of this Act, except this Schedule, and
35
 
(b)
any provision amended by Part 1 of this Act.
 
 
(5)
Regulations under sub-paragraph (1) are subject to the affirmative
 
 
procedure.
 

Page 73

 
22
(1)
The Minister may by regulations amend section 69 of this Act and this
 
 
Schedule so as to change the name of the PSFA.
 
 
(2)
Regulations under sub-paragraph (1) may not be made after regulations
 
 
are made under paragraph 21 .
 
 
(3)
Regulations under sub-paragraph (1) are subject to the negative procedure.
5
 
Schedule 3
Section 74
 

Eligibility verification etc

 

Part 1

 

Eligibility verification

 
 
1
The Schedule to be inserted into the Social Security Administration Act
10
 
1992 after Schedule 3A is—
 
 
“Schedule 3B
Section 121DB
 

Eligibility verification

 

Part 1

 

Power to require information

15

Power to require information by way of an eligibility verification notice

 
 
1
(1)
The Secretary of State may, for the purposes of identifying, or
 
 
assisting in identifying, incorrect payments of a relevant benefit,
 
 
give a person of a type mentioned in paragraph 2 a notice (an
 
 
“eligibility verification notice”) requiring the person to take the
20
 
following steps.
 
 
(2)
The first step is to identify relevant accounts (see paragraph 20 (1)
 
 
) which—
 
 
(a)
the person provides, and
 
 
(b)
are accounts—
25
 
(i)
into which a specified relevant benefit has been
 
 
paid, or are accounts linked to such accounts, and
 
 
(ii)
which meet specified criteria (“eligibility
 
 
indicators”) whether alone or with other accounts
 
 
within paragraph (a) and sub-paragraph (i) of this
30
 
paragraph.
 
 
(3)
The second step is to give to the Secretary of State the following
 
 
information for each identified account—
 
 
(a)
specified details about the account (for example, sort code
 
 
and account number),
35

Page 74

 
(b)
specified details about the account holders (for example,
 
 
their names and dates of birth), and
 
 
(c)
specified details about how the account meets the
 
 
eligibility indicators.
 
 
(4)
Information that amounts to transaction information or special
5
 
category data—
 
 
(a)
may not be required by the Secretary of State by way of
 
 
an eligibility verification notice, and
 
 
(b)
must not be given to the Secretary of State in response to
 
 
such a notice.
10
 
(5)
But the prohibition against the requiring and giving of special
 
 
category data does not prohibit the requiring and giving of data
 
 
to establish that an individual is in receipt of the specified relevant
 
 
benefit.
 
 
(6)
A person given an eligibility verification notice is not required
15
 
to carry out the steps set out in sub-paragraphs (2) and (3) in
 
 
relation to any account that is held outside the United Kingdom.
 
 
(7)
In this paragraph the reference to an account which is linked to
 
 
an account into which a specified relevant benefit is paid is to
 
 
an account held by the same person who holds the account into
20
 
which that benefit is paid.
 
 
(8)
In this Schedule, references to an incorrect payment of a benefit—
 
 
(a)
are references to a payment of an amount in respect of
 
 
that benefit which is not equal to the amount for which
 
 
the benefit recipient is eligible, and
25
 
(b)
include references to payments that have been made or
 
 
that may be made.
 

Types of person to whom an eligibility verification notice can be given

 
 
2
(1)
The types of persons referred to in paragraph 1 (1) are persons—
 
 
(a)
to whom sub-paragraph (2) applies, or
30
 
(b)
who are described in regulations.
 
 
(2)
This sub-paragraph applies to persons who—
 
 
(a)
are authorised—
 
 
(i)
to accept deposits, or
 
 
(ii)
to issue electronic money, and
35
 
(b)
in the course of that activity, provide relevant accounts
 
 
into which a relevant benefit may be paid.
 
 
(3)
Regulations under sub-paragraph (1) (b) may describe only types
 
 
of person who provide accounts which are, or correspond to,
 
 
relevant accounts (including accounts that operate by reference
40
 
to cryptoassets or any similar asset).
 

Page 75

 
(4)
In sub-paragraph (3) , “cryptoasset” has the meaning given in
 
 
section 84A of the Proceeds of Crime Act 2002.
 
 
(5)
For the purposes of sub-paragraph (2) (a) (i) —
 
 
(a)
the reference to accepting deposits is to carrying on the
 
 
regulated activity of accepting deposits for the purposes
5
 
of the Financial Services and Markets Act 2000 (see section
 
 
22 of that Act and article 5 of the Financial Services and
 
 
Markets Act 2000 (Regulated Activities) Order 2001 (S.I.
 
 
2001/544)), and
 
 
(b)
a person is authorised to accept deposits if they are an
10
 
authorised person or an exempt person in relation to the
 
 
carrying on of that activity for the purposes of the
 
 
Financial Services and Markets Act 2000.
 
 
(6)
For the purposes of sub-paragraph (2) (a) (ii) , a person is authorised
 
 
to issue electronic money if the person—
15
 
(a)
is an electronic money institution, and
 
 
(b)
the person is authorised or registered under Part 2 of the
 
 
Electronic Money Regulations 2011 (S.I. 2011/99) in
 
 
relation to carrying on the activity of issuing electronic
 
 
money.
20
 
(7)
In this paragraph, “electronic money” and “electronic money
 
 
institution” have the meanings given by regulation 2(1) of those
 
 
Regulations (and references to the issue of electronic money are
 
 
to be construed in accordance with those Regulations).
 

Eligibility indicators

25
 
3
(1)
The eligibility indicators in an eligibility verification notice must
 
 
be criteria which indicate that the specified relevant benefit may
 
 
have been, or may be, incorrectly paid.
 
 
(2)
The eligibility indicators may be criteria to be met by a single
 
 
account or by two or more accounts combined.
30
 
(3)
The eligibility indicators must not include personal data.
 

Further provision about eligibility verification notices

 
 
4
(1)
An eligibility verification notice must specify a period within
 
 
which the person given the notice must comply with the notice
 
 
to avoid liability to a penalty under Part 2 of this Schedule.
35
 
(2)
The period specified—
 
 
(a)
must begin with the day on which the notice is given, and
 
 
(b)
must not be less than 14 days.
 
 
(3)
An eligibility verification notice must give details about—
 
 
(a)
the right to seek a review of the notice under paragraph
40
 
13 ,
 

Page 76

 
(b)
the right to appeal against the notice under paragraph 14
 
 
, and
 
 
(c)
the penalties that may be imposed under Part 2 of this
 
 
Schedule.
 
 
(4)
An eligibility verification notice (a “periodic eligibility verification
5
 
notice”) may require a person to take the steps set out in
 
 
paragraph 1 (2) and (3) at specified intervals within a period not
 
 
exceeding one year from the date of the notice.
 
 
(5)
If it does so, the eligibility verification notice must set out the
 
 
periods within which the person must comply with the eligibility
10
 
verification notice for each specified interval.
 
 
(6)
Each such period must not be less than 14 days.
 
 
(7)
An eligibility verification notice may not require a person to
 
 
examine historic data, except for the purpose set out in
 
 
sub-paragraph (9) .
15
 
(8)
Data is historic, in relation to an eligibility verification notice, if
 
 
it relates to a time before the beginning of the period of one year
 
 
ending with the day on which the notice is given.
 
 
(9)
An eligibility verification notice may require a person to provide
 
 
the date that an account which meets an eligibility indicator first
20
 
began to meet that indicator.
 
 
(10)
An eligibility verification notice may require information—
 
 
(a)
to be compiled or collated in a specified manner;
 
 
(b)
to be provided in a specified way (including by electronic
 
 
transmission to a specified address or portal).
25
 
(11)
The Secretary of State may vary or revoke an eligibility verification
 
 
notice by giving notice to the person to whom it was given.
 

Use of information obtained

 
 
5
Information given to the Secretary of State in response to an
 
 
eligibility verification notice (“EVM information”) may be used—
30
 
(a)
to identify, or assist in identifying, incorrect payments of
 
 
any benefit, or
 
 
(b)
in criminal or civil proceedings relating to such payments,
 
 
but not for any other purpose.
 

Restrictions on processing and data protection

35
 
6
(1)
This Schedule does not require or authorise any processing of
 
 
information that—
 
 
(a)
contravenes the data protection legislation;
 
 
(b)
is prohibited by any of Parts 1 to 7 or Chapter 1 of Part
 
 
9 of the Investigatory Powers Act 2016.
40

Page 77

 
(2)
But the powers conferred, and the requirements imposed, by the
 
 
Schedule are to be taken into account in determining whether
 
 
the processing of information would contravene the data
 
 
protection legislation.
 
 
(3)
Any processing of information carried out in accordance with
5
 
this Schedule (as read subject to sub-paragraph (1) ) does not
 
 
breach—
 
 
(a)
any obligation of confidence owed by the person
 
 
processing the information, or
 
 
(b)
any other restriction on the processing of information
10
 
(however imposed).
 

Part 2

 

Penalties

 

Fixed penalty for failure to comply with an eligibility verification notice

 
 
7
(1)
If the Secretary of State considers that a person given an eligibility
15
 
verification notice—
 
 
(a)
has failed to comply with the notice within the period
 
 
specified, and
 
 
(b)
has no reasonable excuse for the failure,
 
 
the Secretary of State may impose a penalty (a “fixed penalty”)
20
 
on the person.
 
 
(2)
But the Secretary of State may not impose a fixed penalty before—
 
 
(a)
giving the person an opportunity to make representations
 
 
about their compliance, and
 
 
(b)
if the person has sought a review of the notice under
25
 
paragraph 13 , the conclusion of that review.
 
 
(3)
The Secretary of State imposes a fixed penalty by giving the
 
 
person a notice of the penalty (a “fixed penalty notice”).
 
 
(4)
A fixed penalty notice must state—
 
 
(a)
the reason for the penalty,
30
 
(b)
the amount of the penalty, and
 
 
(c)
the period within which it must be paid.
 
 
(5)
A fixed penalty may not exceed £1,000.
 
 
(6)
The Secretary of State may vary or revoke a fixed penalty notice
 
 
by giving notice to the person to whom it was given.
35
 
(7)
The Secretary of State may not impose more than one fixed
 
 
penalty in respect of an eligibility verification notice except a
 
 
periodic eligibility verification notice.
 

Page 78

 
(8)
In the case of a periodic eligibility verification notice, the Secretary
 
 
of State may not impose more than one fixed penalty in respect
 
 
of each specified interval.
 

Daily rate penalty for continuing failure to comply

 
 
8
(1)
The Secretary of State may impose a penalty (a “daily rate
5
 
penalty”) on a person if—
 
 
(a)
a fixed penalty has been imposed on the person in relation
 
 
to a failure to comply with an eligibility verification notice,
 
 
and
 
 
(b)
the Secretary of State considers that the person’s failure
10
 
to comply without reasonable excuse is continuing.
 
 
(2)
The Secretary of State imposes a daily rate penalty by giving the
 
 
person a notice of the penalty (a “daily rate penalty notice”).
 
 
(3)
A daily rate penalty notice must state—
 
 
(a)
the reason for the penalty,
15
 
(b)
the daily rate of the penalty, and
 
 
(c)
that the penalty will be payable in relation to each day
 
 
by the end of which the person has failed to comply with
 
 
the eligibility verification notice or such earlier date as
 
 
may be specified or described in the notice.
20
 
(4)
The daily rate of a daily rate penalty may not exceed £40.
 
 
(5)
The Secretary of State may vary or revoke a daily rate penalty
 
 
notice by giving notice to the person to whom it was given.
 
 
(6)
The Secretary of State may not impose more than one daily rate
 
 
penalty in respect of an eligibility verification notice except a
25
 
periodic eligibility verification notice.
 
 
(7)
In the case of a periodic eligibility verification notice, the Secretary
 
 
of State may not impose more than one fixed penalty in respect
 
 
of each specified interval.
 

Increased daily rate penalties

30
 
9
(1)
This paragraph applies if—
 
 
(a)
a daily rate penalty is imposed on a person,
 
 
(b)
the failure to which the penalty relates continues for more
 
 
than 30 days beginning with the first day on which the
 
 
daily rate penalty is payable, and
35
 
(c)
the person has been notified that the Secretary of State
 
 
may apply for an increased daily rate penalty to be
 
 
payable.
 
 
(2)
The Secretary of State may make an application to the Tribunal
 
 
for an increased daily rate penalty to be payable by the person.
40

Page 79

 
(3)
If the Tribunal determines that an increased daily rate penalty
 
 
must be paid, it must determine—
 
 
(a)
the increased daily rate, and
 
 
(b)
the date from which the increased rate begins to be
 
 
payable.
5
 
(4)
In deciding the increased daily rate, the Tribunal, must, in
 
 
particular, have regard to—
 
 
(a)
the likely cost to the person of complying with the
 
 
eligibility verification notice,
 
 
(b)
any benefits to the person in not complying with it, and
10
 
(c)
any benefits to anyone else resulting from the person’s
 
 
non-compliance.
 
 
(5)
The Tribunal may not determine a daily rate that exceeds £1,000.
 
 
(6)
The Secretary of State must notify the person of the Tribunal’s
 
 
determination.
15

Penalties for inaccurate or prohibited information

 
 
10
(1)
The Secretary of State may impose a penalty (an “inaccurate
 
 
information penalty”) on a person under this paragraph if the
 
 
Secretary of State considers that—
 
 
(a)
in complying with an eligibility verification notice, the
20
 
person has given the Secretary of State inaccurate
 
 
information, and
 
 
(b)
condition A, B or C is met.
 
 
(2)
Condition A is that the inaccuracy was—
 
 
(a)
deliberate, or
25
 
(b)
due to a failure, without reasonable excuse, by the person
 
 
to take reasonable care.
 
 
(3)
Condition B is that the person—
 
 
(a)
knew of the inaccuracy at the time of giving the
 
 
information,
30
 
(b)
failed to inform the Secretary of State at that time, and
 
 
(c)
has no reasonable excuse for the failure.
 
 
(4)
Condition C is that the person—
 
 
(a)
discovered the inaccuracy some time later, and
 
 
(b)
failed to take reasonable steps to inform the Secretary of
35
 
State, and
 
 
(c)
has no reasonable excuse for the failure.
 
 
(5)
The Secretary of State may impose a penalty (a “prohibited
 
 
information penalty”) under this paragraph if the person, without
 
 
reasonable excuse, gives the Secretary of State information in
40

Page 80

 
contravention of paragraph 1 (4) (transaction information or special
 
 
category data).
 
 
(6)
But the Secretary of State may not impose a penalty under this
 
 
paragraph before giving the person an opportunity to make
 
 
representations about—
5
 
(a)
in the case of an inaccurate information penalty, whether
 
 
or not—
 
 
(i)
the information is inaccurate;
 
 
(ii)
condition A, B or C is met;
 
 
(b)
in the case of a prohibited information penalty, whether
10
 
or not the person has given information in contravention
 
 
of paragraph 1 (4) without any reasonable excuse.
 
 
(7)
The Secretary of State imposes a penalty under this paragraph
 
 
by giving a notice (an “information penalty notice”).
 
 
(8)
An information penalty notice must state—
15
 
(a)
the reason for the penalty,
 
 
(b)
the amount of the penalty, and
 
 
(c)
the period within which it must be paid.
 
 
(9)
A penalty under this paragraph may not exceed £3,000.
 
 
(10)
The Secretary of State may vary or revoke an information penalty
20
 
notice by giving notice to the person to whom it was given.
 

Recovery of penalties

 
 
11
(1)
In England and Wales, a penalty imposed under this Part of this
 
 
Schedule is recoverable—
 
 
(a)
if the county court so orders, as if it were payable under
25
 
an order of that court;
 
 
(b)
if the High Court so orders, as if it were payable under
 
 
an order of that court.
 
 
(2)
In Scotland, a penalty imposed under this Part of this Schedule
 
 
may be enforced in the same manner as an extract registered
30
 
decree arbitral bearing a warrant for execution issued by the
 
 
sheriff court of any sheriffdom in Scotland.
 

Power to change maximum amount of penalties

 
 
12
Regulations may amend the amount for the time being specified
 
 
in paragraph 7 (5) , 8 (4) , 9 (5) or 10 (9) to reflect a change in the
35
 
value of money.
 

Page 81

Part 3

 

Reviews

 
 
13
(1)
A person to whom an eligibility verification notice is given may
 
 
apply to the Secretary of State for a review of the decision to give
 
 
the notice.
5
 
(2)
An application under sub-paragraph (1) must be made within
 
 
the period of 7 days beginning with the day on which the notice
 
 
is given.
 
 
(3)
On a review, the Secretary of State may—
 
 
(a)
revoke the notice,
10
 
(b)
uphold the notice, or
 
 
(c)
vary the notice.
 
 
(4)
After a review has been carried out, the Secretary of State must—
 
 
(a)
notify the person who applied for the review of the
 
 
outcome of the review, and
15
 
(b)
if the outcome was to vary the notice, give the person the
 
 
varied notice.
 
 
(5)
Where an application for a review of an eligibility verification
 
 
notice is made under sub-paragraph (1) —
 
 
(a)
the notice is of no effect until the application is determined
20
 
or withdrawn, and
 
 
(b)
if the notice is upheld or varied, the period for compliance
 
 
(or the first period for compliance in the case of a periodic
 
 
eligibility verification notice) begins with the day on which
 
 
the outcome of the review is notified to the person to
25
 
whom the eligibility verification notice was given.
 

Part 4

 

Appeals

 

Appeals against eligibility verification notices

 
 
14
(1)
A person who is given an eligibility verification notice may appeal
30
 
to the Tribunal against the notice on any of the following
 
 
grounds—
 
 
(a)
the person is not a person to whom an eligibility
 
 
verification notice may be given;
 
 
(b)
the notice is not in accordance with this Schedule;
35
 
(c)
it is unduly onerous to comply with the notice.
 
 
(2)
An appeal under sub-paragraph (1) must be brought within the
 
 
period of 14 days beginning with—
 

Page 82

 
(a)
the day on which the eligibility verification notice was
 
 
given, or
 
 
(b)
if the person seeks a review of the notice under paragraph
 
 
13 , the day on which the person is notified of the outcome
 
 
of the review.
5
 
(3)
On an appeal under sub-paragraph (1) , the Tribunal may—
 
 
(a)
amend the eligibility verification notice,
 
 
(b)
revoke the eligibility verification notice, or
 
 
(c)
dismiss the appeal.
 
 
(4)
Where an appeal under sub-paragraph (1) is brought against an
10
 
eligibility verification notice the notice is of no effect until the
 
 
appeal is determined or withdrawn, unless the Tribunal orders
 
 
otherwise.
 

Appeals against penalty notices

 
 
15
(1)
A person on whom a penalty is imposed under Part 2 of this
15
 
Schedule may appeal to the Tribunal against—
 
 
(a)
the penalty;
 
 
(b)
the amount of the penalty;
 
 
(c)
in the case of a daily rate penalty, the period during which
 
 
the daily amounts are payable.
20
 
(2)
But a person may not appeal against a decision of the Tribunal
 
 
to increase a daily rate penalty under paragraph 9 .
 
 
(3)
An appeal under sub-paragraph (1) may not be brought after the
 
 
end of the period of 30 days beginning with the date on which
 
 
the penalty notice in relation to the penalty being appealed was
25
 
given.
 
 
(4)
On an appeal under sub-paragraph (1) , the Tribunal may—
 
 
(a)
revoke the decision to impose the penalty;
 
 
(b)
amend the amount of the penalty;
 
 
(c)
amend the period within which all or part of the penalty
30
 
is to be paid;
 
 
(d)
dismiss the appeal.
 
 
(5)
If an appeal is brought under sub-paragraph (1) , the penalty
 
 
which is the subject of the appeal is not payable until the appeal
 
 
is determined or withdrawn.
35

Appeals: further provision

 
 
16
(1)
If the Tribunal confirms or varies an eligibility verification notice
 
 
or the imposition of a penalty on an appeal under this Part of
 
 
this Schedule, the person to whom the notice was given, or on
 
 
whom the penalty was imposed, must comply with the notice or
40
 
pay the penalty—
 

Page 83

 
(a)
within such period as may be specified by the Tribunal,
 
 
or
 
 
(b)
if the Tribunal does not specify a period, within such
 
 
period as may be specified by the Secretary of State and
 
 
notified to the person.
5
 
(2)
A decision by the Tribunal on an appeal under this Part of this
 
 
Schedule is final (despite the provisions of sections 11 and 13 of
 
 
the Tribunals, Courts and Enforcement Act 2007).
 

Part 5

 

Code of practice

10

Requirement to issue a code of practice

 
 
17
(1)
The Secretary of State must issue a code of practice about
 
 
eligibility verification notices before giving the first such notice
 
 
under this Schedule.
 
 
(2)
The code of practice must include provision about—
15
 
(a)
the exercise of the power to issue an eligibility verification
 
 
notice;
 
 
(b)
the processing, use and retention of information given in
 
 
response to an eligibility verification notice;
 
 
(c)
the circumstances in which the Secretary of State will
20
 
regard a person as having complied with an eligibility
 
 
verification notice;
 
 
(d)
the imposition of penalties in relation to an eligibility
 
 
verification notice;
 
 
(e)
reviews under paragraph 13 .
25
 
(3)
Before issuing the code of practice, the Secretary of State must
 
 
carry out a public consultation on a draft of the code.
 
 
(4)
The Secretary of State must lay the code of practice before
 
 
Parliament.
 
 
(5)
The requirement in sub-paragraph (3) may be satisfied by public
30
 
consultation carried out before this paragraph comes into force.
 

Code of practice: revisions

 
 
18
(1)
The Secretary of State may from time to time revise and re-issue
 
 
the code of practice issued under paragraph 17 .
 
 
(2)
Paragraph 17 (3) and (4) apply in relation to a re-issue of a code
35
 
of practice as they apply in relation to the issue of the first code
 
 
of practice.
 
 
(3)
But paragraph 17 (3) does not apply if the only changes to be
 
 
made to the code of practice are—
 

Page 84

 
(a)
updates to references to legislation or documents which
 
 
have become out of date, or
 
 
(b)
in the opinion of the Secretary of State, other minor
 
 
corrections.
 

Part 6

5

General provision and interpretation

 

Relevant benefits

 
 
19
(1)
In this Schedule “relevant benefit” means any of the following
 
 
benefits—
 
 
(a)
universal credit;
10
 
(b)
employment and support allowance;
 
 
(c)
state pension credit.
 
 
(2)
Regulations may amend this paragraph so as to add, or remove,
 
 
types of benefit to, or from, the definition of “relevant benefit”.
 
 
(3)
Regulations under sub-paragraph (2) may add a type of benefit
15
 
only to the extent that the benefit is administered by, or on behalf
 
 
of, the Secretary of State.
 

Accounts

 
 
20
(1)
In this Schedule “relevant account” means a personal account
 
 
which operates as—
20
 
(a)
a current account,
 
 
(b)
a savings account, or
 
 
(c)
an investment account,
 
 
including such an account which operates by reference to
 
 
electronic money.
25
 
(2)
For the purposes of sub-paragraph (1) —
 
 
(a)
“personal account” means an account held by one or more
 
 
individuals other than an account that is provided for
 
 
purposes relating to a trade, business or profession;
 
 
(b)
a current account includes any account—
30
 
(i)
in which individuals can hold, and from which
 
 
individuals can withdraw, money, and
 
 
(ii)
which is designed to allow the holder’s money to
 
 
be used for executing transactions with third
 
 
parties,
35
 
but does not include credit card accounts or current
 
 
account mortgages;
 
 
(c)
“electronic money” has the meaning it has in the Electronic
 
 
Money Regulations 2011 (S.I. 2011/99) (see regulation
 
 
2(1)).
40

Page 85

 
(3)
In this Schedule a reference to a person holding an account
 
 
includes a reference to—
 
 
(a)
a person holding an account jointly with one or more
 
 
other persons, and
 
 
(b)
an account being, in any way, in the person’s name,
5
 
and “holder” is to be read accordingly.
 
 
(4)
Sub-paragraphs (5) to (8) apply for the purposes of this Schedule
 
 
where an eligibility verification notice is given to a body corporate
 
 
(“P”).
 
 
(5)
The reference in paragraph 1 (2) (a) to P providing an account
10
 
includes a reference to another person in the same group as P
 
 
providing an account if the condition in sub-paragraph (6) is met.
 
 
(6)
The condition is that P—
 
 
(a)
is able to identify accounts provided by the other person
 
 
that are within paragraph 1 (2) (b) , and
15
 
(b)
is able to obtain the information about those accounts
 
 
mentioned in paragraph 1 (3) .
 
 
(7)
For the purposes of sub-paragraph (5) , two persons are in the
 
 
same group if both are bodies corporate and—
 
 
(a)
one of them is a subsidiary of the other, or
20
 
(b)
both of them are subsidiaries of the same body corporate.
 
 
(8)
In sub-paragraph (7) , “subsidiary” has the meaning given by
 
 
section 1159 of the Companies Act 2006.
 

Service

 
 
21
In this Schedule, references to giving a notice or other document
25
 
(however expressed) include sending the notice or document by
 
 
post.
 

General interpretation

 
 
22
In this Schedule—
 
 
“benefit” means—
30
 
(a)
any relevant social security benefit as defined in
 
 
section 121DA(7), other than a state pension, and
 
 
(b)
any payment mentioned in subsection (2)(d) of
 
 
section 2 of the Employment and Training Act
 
 
1973, under arrangements made under that section;
35
 
“daily rate penalty” means a penalty imposed under
 
 
paragraph 8 (1) ;
 
 
“the data protection legislation” has the same meaning as in
 
 
the Data Protection Act 2018 (see section 3(9) of that Act);
 

Page 86

 
“eligibility indicators” has the meaning given in paragraph
 
 
1 (2) (b) (ii) (and see paragraph 3 for conditions that
 
 
eligibility indicators must meet);
 
 
“eligibility verification notice” has the meaning given in
 
 
paragraph 1 (1) ;
5
 
“fixed penalty” means a penalty imposed under paragraph
 
 
7 (1) ;
 
 
“incorrect payment” , in relation to a benefit, has the meaning
 
 
given in paragraph 1 (8) ;
 
 
“notice” means notice in writing (and “notify” is to be read
10
 
accordingly);
 
 
“periodic eligibility verification notice” has the meaning
 
 
given in paragraph 4 (4) ;
 
 
“personal data” has the same meaning as in the Data
 
 
Protection Act 2018 (see section 3(2) of that Act);
15
 
“processing” , in relation to information, has the same
 
 
meaning as in the Data Protection Act 2018 (see section
 
 
3(4) of that Act);
 
 
“special category data” means the types of personal data the
 
 
processing of which is prohibited (to any extent) from
20
 
time to time under Article 9 of Regulation (EU) 2016/679
 
 
of the European Parliament and of the Council of 27 April
 
 
2016 on the protection of natural persons with regard to
 
 
the processing of personal data and on the free movement
 
 
of such data, and repealing Directive 95/46/EC (General
25
 
Data Protection Regulation);
 
 
“specified” means specified or described in an eligibility
 
 
verification notice, unless the context requires otherwise;
 
 
“state pension” means—
 
 
(a)
a state pension under Part 1 of the Pensions Act
30
 
2014;
 
 
(b)
a retirement pension, including a Graduated
 
 
Retirement Benefit, under Part 2 or 3 of the Social
 
 
Security Contributions and Benefits Act 1992;
 
 
(c)
a shared additional pension under Part 2 of that
35
 
Act;
 
 
“transaction information” , in relation to an account, means
 
 
information which—
 
 
(a)
may enable the identification of the subject matter
 
 
or the amount of a transaction completed through
40
 
the account, or
 
 
(b)
may enable the identification of a party to such a
 
 
transaction who is not a holder of the account,
 
 
but does not include information which relates to the
 
 
payment of a relevant benefit into the account;
45
 
“the Tribunal” means the First-tier Tribunal.
 

Page 87

Relationship with other powers

 
 
23
Nothing in this Schedule limits the powers conferred on the
 
 
Secretary of State by sections 109B and 109BZA (powers to require
 
 
information).”
 

Part 2

5

Proceeds of Crime Act 2002

 
 
2
(1)
The Proceeds of Crime Act 2002 is amended as follows.
 
 
(2)
In section 330 (failure to disclose: regulated sector), after subsection (7D)
 
 
insert—
 
 
“(7E)
Nor does a person commit an offence under this section if—
10
 
(a)
the information or other matter mentioned in subsection (3)
 
 
consists of or includes information that was obtained only
 
 
in consequence of complying with an eligibility verification
 
 
notice given to the person under paragraph 1 (1) of Schedule
 
 
3B to the Social Security Administration Act 1992, and
15
 
(b)
but for the information so obtained the person would not
 
 
know or suspect, or have reasonable grounds for knowing
 
 
or suspecting, that another person is engaged in money
 
 
laundering.”
 
 
(3)
In section 331 (failure to disclose: nominated officers in the regulated sector),
20
 
after subsection (6B) insert—
 
 
“(6C)
Nor does a person commit an offence under this section if—
 
 
(a)
the information or other matter mentioned in subsection (3)
 
 
consists of or includes information that was obtained only
 
 
in consequence of complying with an eligibility verification
25
 
notice given to the person under paragraph 1 (1) of Schedule
 
 
3B to the Social Security Administration Act 1992, and
 
 
(b)
but for the information so obtained the person would not
 
 
know or suspect, or have reasonable grounds for knowing
 
 
or suspecting, that another person is engaged in money
30
 
laundering.”
 

Page 88

 
Schedule 4
Sections 76 and 77
 

Social security fraud: search and seizure powers etc

 
 
1
The Schedule to be inserted in the Social Security Administration Act 1992
 
 
after Schedule 3ZB (inserted by section 91 (3) of this Act) is—
 
 
“Schedule 3ZC
Section 109D
5

Entry, search and seizure etc: England and Wales

 

Introduction

 
 
1
This Schedule contains modifications of the provisions of the
 
 
Police and Criminal Evidence Act 1984 mentioned in section
 
 
109D (4) for the purposes of their application to authorised
10
 
investigators in accordance with section 109D (3) .
 

General modifications

 
 
2
(1)
Each reference to a constable (however expressed) is to be read
 
 
as including a reference to an authorised investigator.
 
 
(2)
Each reference to an offence is to be read as a reference to a DWP
15
 
offence, except for the reference to an offence in section 21(8)(b).
 
 
(3)
Each reference to a criminal investigation is to be read as a
 
 
reference to a criminal investigation in connection with a DWP
 
 
offence.
 

Specific modifications

20
 
3
(1)
Section 15 (search warrants: safeguards) is to be read as if—
 
 
(a)
in subsection (2)(c), for “articles or persons” there were
 
 
substituted “material”;
 
 
(b)
in subsection (6)(b), for “articles or persons” there were
 
 
substituted “material”.
25
 
(2)
Section 16 (execution of warrants) is to be read as if—
 
 
(a)
in subsections (3A) and (3B), for the words “a police officer
 
 
of at least the rank of inspector”, in each case, there were
 
 
substituted “an authorised investigator of at least the grade
 
 
of senior executive officer”;
30
 
(b)
in subsection (5)(a), the words “, if not in uniform,” were
 
 
omitted;
 
 
(c)
in subsection (9)(a), for the words “articles or persons
 
 
sought were” there were substituted “material sought
 
 
was”.
35

Page 89

 
(3)
Section 21 (access and copying) is to be read as if, in subsection
 
 
(3)(b), the reference to the police were a reference to an authorised
 
 
investigator.
 
 
(4)
Section 22 (retention) is to be read as if—
 
 
(a)
for subsection (1), there were substituted—
5
 
“(1)
Subject to subsection (4), anything which has
 
 
been—
 
 
(a)
seized by an authorised investigator,
 
 
(b)
taken away by an authorised investigator
 
 
following a requirement made by virtue of
10
 
section 19 or 20, or
 
 
(c)
seized or taken away by another person
 
 
under any enactment and accepted by an
 
 
authorised investigator,
 
 
may be retained so long as is necessary in all the
15
 
circumstances.”;
 
 
(b)
after subsection (2) there were inserted—
 
 
“(2A)
Nothing in subsection (1) or (2) prevents anything
 
 
lawfully seized by an authorised investigator from
 
 
being accepted and retained by a constable.”;
20
 
(c)
for subsection (5) there were substituted—
 
 
“(5)
Nothing in this section affects any power of a court
 
 
to make an order under section 109G of the Social
 
 
Security Administration Act 1992.”;
 
 
(d)
subsection (6) were omitted.
25
 
(5)
Schedule 1 (special procedure) is to be read as if—
 
 
(a)
references to “special procedure material” did not include
 
 
special procedure material within section 14(1)(b)
 
 
(journalistic material, other than excluded material);
 
 
(b)
references to “excluded material” did not include excluded
30
 
material within—
 
 
(i)
section 11(1)(b) (human tissue etc), or
 
 
(ii)
section 11(1)(c) (certain journalistic material);
 
 
(c)
in paragraph 2(a)(ii), for the words “and does not also
 
 
include excluded material” there were substituted “, or
35
 
consists of or includes excluded material,”;
 
 
(d)
paragraph 3 (second set of access conditions) were
 
 
omitted.
 

Page 90

 
2
The Schedule to be inserted in the Social Security Administration Act 1992
 
 
after Schedule 3ZC (inserted by section 76 (3) of this Schedule) is—
 
 
“Schedule 3ZD
Section 109E
 

Entry, search and seizure etc: Scotland

 

Part 1

5

Normal material

 

Warrants for entry, search and seizure etc

 
 
1
(1)
Where, on an application by an authorised investigator, a sheriff
 
 
is satisfied that the condition in sub-paragraph (3) is met, the
 
 
sheriff may grant a specific premises warrant.
10
 
(2)
A specific premises warrant is a warrant to exercise the powers
 
 
described in paragraph 2 in relation to premises specified in the
 
 
application.
 
 
(3)
The condition in this sub-paragraph is that there are reasonable
 
 
grounds for believing—
15
 
(a)
that a DWP offence which is an indictable offence has
 
 
been committed,
 
 
(b)
there is material on premises to which the application
 
 
relates which is likely to be of substantial value (whether
 
 
by itself or with other material) to the investigation of the
20
 
offence,
 
 
(c)
the material is likely to be relevant evidence,
 
 
(d)
the material does not consist of or include items subject
 
 
to legal privilege, excluded material or special procedure
 
 
material, and
25
 
(e)
any of the following applies—
 
 
(i)
it is not practicable to communicate with a person
 
 
entitled to grant entry to the premises;
 
 
(ii)
it is not practicable to communicate with a person
 
 
entitled to grant access to the material (if different
30
 
from the person entitled to grant entry);
 
 
(iii)
entry to the premises will not be granted unless a
 
 
warrant is produced;
 
 
(iv)
the purpose of a search may be frustrated or
 
 
seriously prejudiced unless an authorised
35
 
investigator arriving at the premises can secure
 
 
immediate access to them.
 
 
(4)
The power to issue a warrant under paragraph 1 is in addition
 
 
to any other power to issue a warrant in relation to entry to or
 
 
search of premises.
40

Page 91

Powers exercisable under a warrant

 
 
2
(1)
The powers granted by a warrant under paragraph 1 are powers
 
 
to—
 
 
(a)
enter the premises;
 
 
(b)
search the premises;
5
 
(c)
examine any document, equipment or other item or
 
 
material on the premises (including by operating a
 
 
computer or other device in order to gain access to
 
 
information);
 
 
(d)
seize any document, equipment or other item or material
10
 
on the premises and remove it;
 
 
(e)
take a copy of or otherwise record (in any form) a
 
 
document, equipment or other item or material on the
 
 
premises, or any information contained in or accessible
 
 
by means of any such document, equipment, item or
15
 
material;
 
 
(f)
require any person on the premises to provide information
 
 
or assistance for the purpose of—
 
 
(i)
enabling or facilitating the exercise of the powers
 
 
described in paragraphs (a) to (e) , or
20
 
(ii)
allowing anything inspected, seized or recorded
 
 
in the exercise of those powers to be better
 
 
understood.
 
 
(2)
A person may exercise those powers only so far as the person
 
 
considers it necessary to do so for the purposes of investigating
25
 
a DWP offence.
 
 
(3)
A person may not exercise the power to seize and remove an
 
 
item unless the person considers that exercising the power to take
 
 
a copy or record it would be insufficient.
 
 
(4)
A person may not exercise the power to seize and remove an
30
 
item subject to legal privilege, excluded material or special
 
 
procedure material.
 
 
(5)
The powers granted by a warrant under paragraph 1 may be
 
 
subject to conditions or limitations.
 

Execution of warrants

35
 
3
(1)
A warrant under paragraph 1 may be executed by any authorised
 
 
investigator.
 
 
(2)
An authorised investigator may take other persons, equipment
 
 
and materials onto the premises for the purposes of assisting in
 
 
the exercise of the powers granted by the warrant.
40

Page 92

 
(3)
A person so taken onto the premises may also exercise the powers
 
 
granted by the warrant if the person is in the company, and under
 
 
the supervision, of an authorised investigator.
 
 
(4)
The powers granted by a warrant under paragraph 1 may be
 
 
exercised—
5
 
(a)
only at a reasonable hour, unless it appears to the
 
 
investigator executing the warrant that the purpose of a
 
 
search may be frustrated on an entry at a reasonable hour,
 
 
and
 
 
(b)
only within the period of three months beginning with
10
 
the day on which it is issued.
 
 
(5)
When premises are entered in reliance on a warrant under
 
 
paragraph 1 , the authorised investigator executing the warrant—
 
 
(a)
must give a copy of the warrant to any person appearing
 
 
to be in charge of the premises at the earliest opportunity
15
 
(if possible before entering the premises);
 
 
(b)
if no such copy is given during the period of entry on the
 
 
premises, must leave a copy of the warrant in a prominent
 
 
place on the premises;
 
 
(c)
must produce, on request by any person appearing to be
20
 
in charge of the premises, proof of the person’s identity
 
 
and status as an authorised investigator;
 
 
(d)
if no person appearing to be in charge of the premises is
 
 
present when the person executing the warrant is on the
 
 
premises, must leave the premises as effectively secured
25
 
against trespassers as that person found them.
 
 
(6)
A person exercising powers granted by a warrant under
 
 
paragraph 1 may use reasonable force if necessary, except to
 
 
enforce the requirement described in paragraph 2 (1) (f) .
 

Seizure of items

30
 
4
(1)
This section applies where a person exercises the power of seizure
 
 
and removal described in paragraph 2 (1) (d) .
 
 
(2)
The person must, on request by any person appearing to be in
 
 
charge of the premises—
 
 
(a)
give a receipt for the thing seized, and
35
 
(b)
in the case of a document readily capable of being copied,
 
 
give a copy of it.
 
 
(3)
The thing seized may be retained in the possession of the
 
 
Secretary of State for so long as the Secretary of State considers
 
 
necessary for the purposes of investigating any DWP offence
40
 
(irrespective of the purpose for which it was initially obtained).
 
 
(4)
For any such purpose, a person acting on behalf of the Secretary
 
 
of State may—
 

Page 93

 
(a)
examine the thing seized (using reasonable force if
 
 
necessary), and
 
 
(b)
record (in whatever form) any information obtained from
 
 
the thing seized.
 
 
(5)
Sub-paragraph (6) applies where—
5
 
(a)
an item has been seized and removed, and
 
 
(b)
a person who had custody or control of the item before
 
 
it was seized, or a person acting on behalf of such a
 
 
person, requests access to it.
 
 
(6)
An authorised investigator must give the person access to the
10
 
item under the investigator’s supervision, unless the investigator
 
 
has reasonable grounds for believing that doing so would
 
 
prejudice—
 
 
(a)
an investigation of a DWP offence, or
 
 
(b)
criminal proceedings relating to a DWP offence.
15

Return of warrant etc

 
 
5
(1)
If a warrant under paragraph 1 is executed, the person who
 
 
executed it must return it to the court from which it was issued
 
 
as soon as reasonably practicable with an endorsement
 
 
summarising the exercise of the powers in paragraph 2 .
20
 
(2)
If a warrant under paragraph 1 is not executed, the Secretary of
 
 
State must return it to the court from which it was issued as soon
 
 
as reasonably practicable with an endorsement stating that it was
 
 
not executed.
 
 
(3)
A warrant must be retained for 12 months by the court to which
25
 
it is returned.
 

Authorised investigators

 
 
6
(1)
In this Schedule, an authorised investigator is an individual who
 
 
is authorised by the Secretary of State to exercise the powers
 
 
conferred by this Schedule.
30
 
(2)
An individual may be authorised as an authorised investigator
 
 
only if the individual—
 
 
(a)
is an official of a government department,
 
 
(b)
is a higher executive officer, or
 
 
(c)
has a grade that is equivalent to, or higher than, that of
35
 
a higher executive officer.
 

Page 94

Part 2

 

Special procedure

 

Production orders

 
 
7
(1)
Where, on an application by an authorised investigator, a sheriff
 
 
is satisfied that the condition in sub-paragraph (4) is met, the
5
 
sheriff may grant a production order.
 
 
(2)
A production order is an order requiring the person who appears
 
 
to the sheriff to be in possession of material specified in the
 
 
application to—
 
 
(a)
give the material to an authorised investigator, or
10
 
(b)
give an authorised investigator access to the material.
 
 
(3)
A person must comply with a production order within—
 
 
(a)
the period of 7 days beginning with the day on which the
 
 
order is made, or
 
 
(b)
such longer period as may be specified in the order.
15
 
(4)
The condition in this sub-paragraph is that there are reasonable
 
 
grounds for believing that—
 
 
(a)
a DWP offence which is an indictable offence has been
 
 
committed,
 
 
(b)
material which is specified in the application is likely to
20
 
be of substantial value (whether by itself or with other
 
 
material) to the investigation of the offence,
 
 
(c)
the material consists of or includes—
 
 
(i)
personal records, or
 
 
(ii)
confidential professional material,
25
 
(d)
the material is likely to be relevant evidence,
 
 
(e)
other methods of obtaining the material—
 
 
(i)
have been tried without success, or
 
 
(ii)
have not been tried because it appeared that they
 
 
were bound to fail, and
30
 
(f)
it is in the public interest that the material should be given,
 
 
or that access to it should be given, having regard to—
 
 
(i)
the benefit likely to accrue to the investigation if
 
 
the material is obtained, and
 
 
(ii)
the circumstances under which the person in
35
 
possession of the material holds it.
 
 
(5)
Where the material consists of information stored in an electronic
 
 
form—
 
 
(a)
a production order under sub-paragraph (2) (a) , requires
 
 
the material to be given in a form in which—
40
 
(i)
it can be taken away, and
 

Page 95

 
(ii)
in which it is visible and legible or from which it
 
 
can readily be produced in a visible and legible
 
 
form, and
 
 
(b)
a production order under sub-paragraph (2) (b) , requires
 
 
an authorised investigator to be given access to the
5
 
material in a form in which it is visible and legible.
 
 
(6)
Paragraph 4 applies in relation to material given to an authorised
 
 
investigator under a production order as it applies to material
 
 
seized and removed under the power described in paragraph
 
 
2 (1) (d) .
10

Warrants

 
 
8
(1)
On an application by an authorised investigator, a sheriff may
 
 
grant a specific premises warrant within the meaning of paragraph
 
 
1 (2) where the sheriff is satisfied that—
 
 
(a)
a production order could be issued in relation to material
15
 
(see paragraph 7 (4) ), and
 
 
(b)
sub-paragraphs (2) and (3) of this paragraph apply.
 
 
(2)
This sub-paragraph applies where there are reasonable grounds
 
 
for believing that the material is on the premises specified or
 
 
described in the application.
20
 
(3)
This sub-paragraph applies where any of the following apply—
 
 
(a)
it is not practicable to communicate with a person entitled
 
 
to grant entry to the premises;
 
 
(b)
it is not practicable to communicate with a person entitled
 
 
to grant access to the material (if different from the person
25
 
entitled to grant entry);
 
 
(c)
a production order relating to the material has not been
 
 
complied with;
 
 
(d)
entry to the premises will not be granted unless a warrant
 
 
is produced;
30
 
(e)
the purpose of a search may be frustrated or seriously
 
 
prejudiced unless an authorised investigator arriving at
 
 
the premises can secure immediate access to them;
 
 
(f)
the material contains information disclosure of which, in
 
 
the absence of a warrant, would be a breach of a restriction
35
 
on disclosure, or an obligation of secrecy, contained in
 
 
any enactment whenever passed.
 
 
(4)
The provisions of Part 1 of this Schedule that apply in relation
 
 
to a specific premises warrant apply to a specific premises warrant
 
 
under this paragraph as if, at the end of paragraph 2 (4) , there
40
 
were inserted “other than confidential professional material or
 
 
personal records”.
 

Page 96

Part 3

 

General

 

Procedural rules

 
 
9
(1)
Provision may be made in rules of court about proceedings under
 
 
this Schedule.
5
 
(2)
Rules of court are, without prejudice to section 305 of the Criminal
 
 
Procedure (Scotland) Act 1995, to be made by Act of Adjournal.
 

Interpretation

 
 
10
For the purposes of this Schedule—
 
 
“authorised investigators” has the meaning given in
10
 
paragraph 6 ;
 
 
“confidential professional material” means material to which
 
 
section 14(2) of the Police and Criminal Evidence Act 1984
 
 
applies;
 
 
“excluded material” has the meaning given by section 11 of
15
 
that Act (and see sections 12 and 13 of that Act);
 
 
“items subject to legal privilege” has the meaning given by
 
 
section 10 of that Act;
 
 
“personal records” means personal records within the
 
 
meaning of “excluded information” given by section 11(1)
20
 
of that Act;
 
 
“premises” includes—
 
 
(a)
a vehicle or vessel,
 
 
(b)
a tent or moveable structure, and
 
 
(c)
any other place;
25
 
“relevant evidence” , in relation to an offence, means anything
 
 
that would be admissible in evidence at a trial for the
 
 
offence;
 
 
“special procedure material” has the meaning given by
 
 
section 14 of the Police and Criminal Evidence Act 1984.”
30

Page 97

 
Schedule 5
Section 90
 

Recovery from bank accounts etc

 
 
The Schedule to be inserted in the Social Security Administration Act 1992 after
 
 
Schedule 3 is—
 
 
“Schedule 3ZA
Section 80B
5

Recovery of amounts from bank accounts etc

 

Part 1

 

deductions from accounts

 

Direct deduction orders

 
 
1
(1)
Where an amount is recoverable from a liable person who holds an account
10
 
with a bank, the Secretary of State may make an order (a “direct deduction
 
 
order”) in respect of that account.
 
 
(2)
A direct deduction order must be given to the bank with which the account
 
 
is held.
 
 
(3)
A direct deduction order may be—
15
 
(a)
a regular direct deduction order;
 
 
(b)
a lump sum direct deduction order.
 
 
(4)
A regular direct deduction order is an order requiring the bank—
 
 
(a)
to make regular deductions from the liable person’s account, and
 
 
(b)
to pay the amounts deducted to the Secretary of State.
20
 
(5)
A lump sum direct deduction order is an order requiring the bank—
 
 
(a)
to deduct from the liable person’s account an amount specified in
 
 
the order, and
 
 
(b)
to pay that amount to the Secretary of State.
 
 
(6)
The Secretary of State may give a regular direct deduction order and a
25
 
lump sum direct deduction order in respect of the same account.
 
 
(7)
The Secretary of State must give a copy of a direct deduction order to—
 
 
(a)
the liable person, and
 
 
(b)
in the case of a joint account, each of the other account holders.
 
 
(8)
Paragraphs 3 to 5 set out steps that the Secretary of State must take before
30
 
making a direct deduction order.
 

Accounts which may be the subject of a direct deduction order

 
 
2
(1)
The Secretary of State may make a direct deduction order in respect of any
 
 
account which—
 
 
(a)
is held by a liable person, and
35

Page 98

 
(b)
contains an amount in which the Secretary of State considers the
 
 
liable person has a beneficial interest.
 
 
(2)
The Secretary of State may make a direct deduction order in respect of a
 
 
joint account only if the liable person does not hold a sole account in respect
 
 
of which a direct deduction order may be made which would be likely to
5
 
result in the recovery of the recoverable amount within a reasonable period
 
 
of time.
 
 
(3)
But sub-paragraph (2) does not apply if all the holders of a joint account
 
 
are liable persons in relation to the same recoverable amount.
 

Requirement for banks to provide information

10
 
3
(1)
Before the Secretary of State makes a direct deduction order in respect of
 
 
a liable person’s account, the Secretary of State must obtain and consider
 
 
bank statements for the account covering a period of at least three months.
 
 
(2)
To obtain the statements, the Secretary of State must give the bank with
 
 
which the Secretary of State believes the liable person holds the account a
15
 
notice (an “account information notice”) requiring the bank to give the
 
 
Secretary of State statements for the account covering—
 
 
(a)
the three months immediately before the notice is given, or
 
 
(b)
such longer period, ending immediately before the notice is given,
 
 
as may be specified in the notice.
20
 
(3)
An account information notice must—
 
 
(a)
contain the name of the liable person, and
 
 
(b)
identify the account (for example, by number and sort code).
 
 
(4)
The Secretary of State may give an account information notice relating to
 
 
an account only for the purpose of determining whether to make a direct
25
 
deduction order in respect of the account.
 
 
(5)
At any time, for the purposes of determining whether to make a direct
 
 
deduction order in relation to a liable person, the Secretary of State may
 
 
give a notice (“a general information notice”) to a bank requiring the bank
 
 
to—
30
 
(a)
identify every account that the liable person holds with the bank,
 
 
(b)
for each identified account, give the Secretary of State the following
 
 
information—
 
 
(i)
a description of the type of account,
 
 
(ii)
identifiers for the account,
35
 
(iii)
if the account is a sole account, the balance of the account
 
 
at the date that it is identified, and
 
 
(iv)
if the account is a joint account, the name of each other
 
 
account holder, and
 
 
(c)
give the Secretary of State—
40
 
(i)
the correspondence address that the bank holds for the liable
 
 
person, and
 

Page 99

 
(ii)
in the case of a joint account, the correspondence address
 
 
that the bank holds for each other account holder.
 
 
(6)
The Secretary of State may give—
 
 
(a)
more than one account information notice, or general information
 
 
notice, in relation to the same recoverable amount;
5
 
(b)
more than one account information notice in respect of the same
 
 
account.
 
 
(7)
A notice under this paragraph must—
 
 
(a)
set out how and when the bank must comply with the notice, and
 
 
(b)
explain that the bank may be liable to a penalty under paragraph
10
 
20 if it fails to do so without reasonable excuse.
 
 
(8)
The bank must comply with a notice given under this paragraph.
 
 
(9)
A bank that is given an account information notice, or a general information
 
 
notice, must not notify any of the following people that the notice has been
 
 
given—
15
 
(a)
the liable person;
 
 
(b)
any other holder of the account in respect of which an account
 
 
information notice is given;
 
 
(c)
any other holder of an account identified in accordance with a
 
 
general information notice.
20
 
(10)
Information given to the Secretary of State in response to a notice under
 
 
this paragraph may be used by the Secretary of State for purposes connected
 
 
with the Secretary of State’s functions under this Part of this Act, but not
 
 
for any other purpose.
 

Joint accounts

25
 
4
(1)
Before making a direct deduction order in respect of a joint account, the
 
 
Secretary of State must make an assessment of the liable person’s beneficial
 
 
interest in the amounts which are or may be in the account from time to
 
 
time.
 
 
(2)
The Secretary of State must presume that the liable person’s beneficial
30
 
interest entitles them to the following share in any amounts which are or
 
 
may be in the account from time to time—
 
 
1 N
 
 
where “N” is the number of account holders.
 
 
(3)
But the presumption does not apply where the Secretary of State has reason
35
 
to believe that the liable person’s beneficial interest is different from the
 
 
presumed share.
 
 
(4)
In making an assessment under sub-paragraph (1) , the Secretary of State
 
 
must have regard to—
 

Page 100

 
(a)
the bank statements obtained for the account under paragraph 3
 
 
, and
 
 
(b)
any responses to a notice under paragraph 5 .
 

Further requirements before making a direct deduction order

 
 
5
(1)
Before making a direct deduction order, the Secretary of State must give
5
 
the liable person, and, in the case of a joint account, each of the other
 
 
account holders, a notice—
 
 
(a)
identifying the account that would be subject to the proposed order,
 
 
(b)
stating the amount that would be recoverable under the proposed
 
 
order,
10
 
(c)
setting out the terms of the proposed order,
 
 
(d)
if the account is a joint account, setting out the Secretary of State’s
 
 
duty to make an assessment as to the liable person’s beneficial
 
 
interest and the presumption that applies (see paragraph 4 ), and
 
 
(e)
identifying, for the benefit of the liable person, the recoverable
15
 
amount to which the order relates.
 
 
(2)
The notice must invite the liable person and, in the case of a joint account,
 
 
each other account holder—
 
 
(a)
to make representations about the terms of the proposed order, and
 
 
(b)
in the case of a joint account, to make representations about the
20
 
liable person’s beneficial interest in amounts in the account.
 
 
(3)
The notice must set out the means by which, and the period within which,
 
 
representations may be made.
 
 
(4)
The period must be a period of at least one month beginning with the day
 
 
after the day on which the notice is given.
25
 
(5)
The Secretary of State must—
 
 
(a)
consider representations made in accordance with the notice, and
 
 
(b)
in light of those representations —
 
 
(i)
in the case of a joint account, make the assessment required
 
 
under paragraph 4 (1) , and
30
 
(ii)
in any case, decide whether, and in what terms, to make a
 
 
direct deduction in respect of the account.
 
 
(6)
A notice under sub-paragraph (1) may be given to the bank, including
 
 
before it is given to the persons to whom it is required to be given under
 
 
that sub-paragraph (and for the effect of giving the notice to the bank see
35
 
paragraph 11 (restrictions on accounts)).
 
 
(7)
Where a notice is given to the bank before it is given to the person to whom
 
 
it is required to be given, in reliance on sub-paragraph (6) , the notice must
 
 
be given to the other persons as soon as reasonably practicable after being
 
 
given to the bank.
40
 
(8)
If, following the giving of a notice under this paragraph, the Secretary of
 
 
State decides not to make a direct deduction order, the Secretary of State
 

Page 101

 
must, as soon as reasonably practicable, notify every person given a notice
 
 
under sub-paragraph (1) of the decision.
 

Amounts of deductions

 
 
6
(1)
The Secretary of State may make a direct deduction order only if satisfied
 
 
on the basis of information received by virtue of paragraphs 3 and 5 that
5
 
the terms of the order—
 
 
(a)
will not cause the liable person, any other account holder, or any
 
 
person within sub-paragraph (2) to suffer hardship in meeting
 
 
essential living expenses, and
 
 
(b)
are otherwise fair in all the circumstances.
10
 
(2)
A person is within this subsection if—
 
 
(a)
they live with the liable person, or any other account holder, for
 
 
some or all of the time, or
 
 
(b)
they are financially dependent on the liable person or any other
 
 
account holder.
15
 
(3)
The total amount of deductions to be made under a regular direct deduction
 
 
order in relation to any period of one month must not exceed 40% of the
 
 
amounts credited to the account in the relevant period.
 
 
(4)
The “relevant period” is the period of three months mentioned in paragraph
 
 
3 (2) (a) (and if more than one notice is given under paragraph 3 in relation
20
 
to the same direct deduction order, the reference in paragraph 3 (2) (a) to
 
 
“the notice” is to be read as a reference to the most recent of those notices).
 
 
(5)
The Secretary of State must ensure that the amount to be deducted and
 
 
paid to the Secretary of State under a direct deduction order does not
 
 
exceed the recoverable amount to which the order relates.
25

Content and effect of direct deduction orders

 
 
7
(1)
A regular direct deduction order must specify—
 
 
(a)
the amounts, or a method for calculating the amounts, to be
 
 
deducted (see paragraph 6 ),
 
 
(b)
when those amounts are to be deducted and paid to the Secretary
30
 
of State, and
 
 
(c)
the penalties that may be imposed for a failure to comply (see
 
 
paragraph 20 ).
 
 
(2)
A regular direct deduction order may specify different amounts, or different
 
 
methods for calculating the amounts, to be deducted at different times.
35
 
(3)
A lump sum direct deduction order must specify—
 
 
(a)
the amount, or method for calculating the amount, to be deducted,
 
 
(b)
when the amount is to be deducted and paid to the Secretary of
 
 
State, and
 
 
(c)
the penalties that may be imposed for a failure to comply (see
40
 
paragraph 20 ).
 

Page 102

 
(4)
A direct deduction order may not require an amount to be deducted from
 
 
a person’s bank account before the end of the period of one month
 
 
beginning with the day after the day on which the Secretary of State
 
 
complies with paragraph 1 (7) .
 
 
(5)
A bank must comply with a direct deduction order.
5

Bank’s administrative costs

 
 
8
(1)
A direct deduction order may include provision for the bank to deduct
 
 
from the liable person’s account an amount specified in, or calculated in
 
 
accordance with, the order, for the purposes of meeting costs reasonably
 
 
incurred by the bank in complying with the order.
10
 
(2)
A bank may deduct the costs to which they are entitled under a direct
 
 
deduction order immediately prior to making the deduction which is to
 
 
be paid to the Secretary of State under the order.
 
 
(3)
In complying with paragraph 6 (1) and (3) in relation to a direct deduction
 
 
order the Secretary of State must take account of any deductions to be
15
 
made under the order by virtue of sub-paragraph (1) .
 

Insufficient funds

 
 
9
(1)
Where the amount in an account is lower than the amount to be deducted
 
 
in accordance with a lump sum direct deduction order at the time that the
 
 
bank is (apart from this sub-paragraph) required to make the deduction—
20
 
(a)
no deduction is to be made, and
 
 
(b)
the bank must notify the Secretary of State as soon as possible.
 
 
(2)
Where the amount in an account is lower than the amount to be deducted
 
 
in accordance with a regular direct deduction order at the time that the
 
 
bank is (apart from this sub-paragraph) required to make the deduction—
25
 
(a)
the order is to be read as requiring the deduction and payment to
 
 
the Secretary of State to take place on the same day the following
 
 
week, and
 
 
(b)
if, on that day, the amount in the account is lower than the amount
 
 
to be deducted in accordance with the order—
30
 
(i)
no deduction is to be made, and
 
 
(ii)
the bank must notify the Secretary of State as soon as
 
 
possible.
 
 
(3)
References in this paragraph to the amount to be deducted in accordance
 
 
with a direct deduction order include any amounts to be deducted in respect
35
 
of a bank’s costs by virtue of provision under paragraph 8 (1) .
 

Non-working days

 
 
10
(1)
If (apart from this paragraph) a bank would be required to make a
 
 
deduction and payment under a direct deduction order on a day that is
 

Page 103

 
not a working day, the obligation to make the deduction and payment
 
 
applies in relation to the next working day after that day.
 
 
(2)
In this paragraph, “working day” means any day other than—
 
 
(a)
Saturday or Sunday, or
 
 
(b)
a day which is a bank holiday under the Banking and Financial
5
 
Dealings Act 1971 in any part of the United Kingdom.
 

Restrictions on accounts

 
 
11
(1)
Where a notice under paragraph 5 (a “first notice”), or a direct deduction
 
 
order under paragraph 1 , is given to a bank in relation to a liable person’s
 
 
account, the bank must—
10
 
(a)
ensure that the account is not closed at the request of an account
 
 
holder, and
 
 
(b)
if the notice relates to a proposed lump sum direct deduction order,
 
 
or the order is a lump sum direct deduction order—
 
 
(i)
secure that no transaction takes place (except for any
15
 
deduction under the order) which would result in the
 
 
amount in the account falling below the specified amount
 
 
or, if the amount in the account is already below that
 
 
amount, falling any further, or
 
 
(ii)
take the action set out in sub-paragraph (2) .
20
 
(2)
The action is to—
 
 
(a)
transfer the specified amount, or the amount in the account if that
 
 
is less than the specified amount, from the account into a different
 
 
account (a “hold account”) created by the bank for the sole purpose
 
 
of holding that transferred amount, and
25
 
(b)
secure that no transaction takes place (except for any deduction
 
 
under the order) which would result in the amount in the hold
 
 
account falling below the amount transferred.
 
 
(3)
Where a bank takes the action set out in sub-paragraph (2) in relation to
 
 
a lump sum direct deduction order, the order is to be read as if it required
30
 
deductions to be made from the hold account.
 
 
(4)
A bank must ensure that taking the action set out in sub-paragraph (2)
 
 
does not cause any disadvantage to the liable person, and in the case of a
 
 
joint account, any other account holder, that the liable person, and any
 
 
other account holder, would not have experienced if the bank had instead
35
 
acted in accordance with sub-paragraph (1) (b) (i) .
 
 
(5)
The requirements in sub-paragraph (1) cease to apply when—
 
 
(a)
in relation to a first notice, a notice is given to the bank under
 
 
paragraph 5 (8) (notice of decision not to make a direct deduction
 
 
order) or a direct deduction order is given to the bank under
40
 
paragraph 1 ;
 
 
(b)
in relation to a direct deduction order—
 
 
(i)
all the deductions under the order have been made, or
 

Page 104

 
(ii)
the order is revoked.
 
 
(6)
In this paragraph, “specified” means specified in, or calculated in accordance
 
 
with, a first notice or direct deduction order.
 

Applications to vary

 
 
12
(1)
Any holder of an account to which a direct deduction order applies may
5
 
apply to the Secretary of State to vary the order.
 
 
(2)
The Secretary of State must give any other holders of the account an
 
 
opportunity to make representations in relation to the application.
 
 
(3)
The Secretary of State must notify the applicant and any other account
 
 
holders of the Secretary of State’s decision on the application.
10

Variation

 
 
13
(1)
The Secretary of State may vary a direct deduction order (whether after an
 
 
application by an account holder or otherwise).
 
 
(2)
The provisions in this paragraph apply in relation to any variation of a
 
 
direct deduction order, including one that results from a review under
15
 
paragraph 18 .
 
 
(3)
Where the Secretary of State proposes to vary a direct deduction order
 
 
other than under sub-paragraph (7) , the Secretary of State must give—
 
 
(a)
the liable person, and
 
 
(b)
in the case of a joint account, each of the other account holders,
20
 
an opportunity to make representations about the proposed variation.
 
 
(4)
The Secretary of State may comply with sub-paragraph (3) at the same time
 
 
as complying with paragraph 12 (2) .
 
 
(5)
A variation to a direct deduction order takes effect when the Secretary of
 
 
State gives the varied order to the bank or, if later, in accordance with the
25
 
terms of the order as varied.
 
 
(6)
The Secretary of State must give a copy of the varied order to the liable
 
 
person and, in the case of a joint account holder, each other account holder.
 
 
(7)
The Secretary of State may vary a direct deduction order so that the order
 
 
applies to another account held by the liable person (including an account
30
 
administered by a different bank) only if—
 
 
(a)
the variation is requested by the liable person, and
 
 
(b)
if the other account is a joint account, each of the other account
 
 
holders consents.
 
 
(8)
Where a direct deduction order is varied under sub-paragraph (7) —
35
 
(a)
if the order is varied so that it applies to an account administered
 
 
by another bank—
 
 
(i)
the reference in sub-paragraph (5) to “the bank” is to the
 
 
bank which administers that account,
 

Page 105

 
(ii)
paragraph 7 (5) applies to the order as varied as it applied
 
 
to the original order, and
 
 
(iii)
the Secretary of State must notify the bank given the original
 
 
order of the effect of the variation, and
 
 
(b)
if the order is varied so that it applies to a joint account—
5
 
(i)
the requirement in sub-paragraph (6) is to give a copy of
 
 
the order to each other holder of that joint account, and
 
 
(ii)
if the original order applied to a joint account, the Secretary
 
 
of State must notify each other holder of that joint account
 
 
of the effect of the variation.
10
 
(9)
The steps set out in paragraphs 3 to 5 do not apply to a decision to vary
 
 
a direct deduction order.
 

Revocation of direct deduction order

 
 
14
(1)
The Secretary of State may revoke a direct deduction order.
 
 
(2)
The Secretary of State must revoke a direct deduction order as soon as
15
 
reasonably practicable after becoming aware that—
 
 
(a)
the recoverable amount has been recovered, or
 
 
(b)
the liable person to whom the order relates has died.
 
 
(3)
Where the Secretary of State revokes a direct deduction order, the Secretary
 
 
of State must give a notice of the revocation to—
20
 
(a)
the bank to which the order was given,
 
 
(b)
the liable person (apart from in a case within sub-paragraph (2) (b) ),
 
 
and
 
 
(c)
in the case of a joint account, each of the other account holders.
 

Further information notices

25
 
15
(1)
For the purposes of determining whether to revoke or vary a direct
 
 
deduction order, the Secretary of State may give a bank a notice (a “further
 
 
information notice”) requiring the bank—
 
 
(a)
to give the Secretary of State statements for an account held by the
 
 
liable person covering—
30
 
(i)
the three months immediately before the notice was given,
 
 
or
 
 
(ii)
such longer period, ending immediately before the notice
 
 
was given, as may be specified in the notice;
 
 
(b)
to take the steps set out in paragraphs (a) to (c) of paragraph 3 (5) .
35
 
(2)
Sub-paragraphs (6) , (7) and (10) of paragraph 3 apply in relation to a further
 
 
information notice as they apply in relation to a notice under that paragraph.
 
 
(3)
Before giving a further information notice to a bank requiring statements
 
 
to be given in respect of a joint account, the Secretary of State must notify
 
 
each account holder other than the liable person—
40
 
(a)
that the notice will be given, and
 

Page 106

 
(b)
of the effect of the notice.
 
 
(4)
A further information notice may be given to the bank before, at the same
 
 
time as or after the Secretary of State complies with paragraph 13 (3) .
 

Suspending of direct deduction orders

 
 
16
(1)
The Secretary of State may suspend and re-start the requirement to make
5
 
deductions and payments under a regular direct deduction order at any
 
 
time by notifying the bank to which the order was given.
 
 
(2)
The Secretary of State must notify the liable person and, in the case of a
 
 
joint account, each other account holder, if the requirement is suspended
 
 
or re-started under this paragraph.
10

Cessation on death of liable person

 
 
17
A bank ceases to be subject to a direct deduction order on becoming aware
 
 
of the liable person’s death.
 

Reviews

 
 
18
(1)
This paragraph applies where the Secretary of State—
15
 
(a)
makes a direct deduction order,
 
 
(b)
varies a direct deduction order, or
 
 
(c)
decides not to vary a direct deduction order in response to an
 
 
application under paragraph 12 .
 
 
(2)
Any of the following persons (“relevant persons”) may apply to the
20
 
Secretary of State for a review of the decision to make, to vary or not to
 
 
vary the order—
 
 
(a)
the liable person to whom the order relates, and
 
 
(b)
in the case of a joint account, any other account holder.
 
 
(3)
An application under sub-paragraph (2) must be made before the end of
25
 
the period of one month beginning with the day after the day on which
 
 
the applicant was—
 
 
(a)
given a copy of the order or the order as varied, or
 
 
(b)
notified of the decision not to vary the order.
 
 
(4)
An application for a review under this paragraph may not be made on, or
30
 
include, any ground relating to the existence or amount of a recoverable
 
 
amount (unless the amount is said to be incorrectly stated in the order).
 
 
(5)
On a review, the Secretary of State may—
 
 
(a)
uphold the decision,
 
 
(b)
vary the order, or
35
 
(c)
revoke the order.
 
 
(6)
After a review has been carried out, the Secretary of State must—
 

Page 107

 
(a)
notify the applicant and other relevant persons of the outcome of
 
 
the review, and
 
 
(b)
if the outcome was to vary the order, give—
 
 
(i)
the order as varied to the bank which was given the original
 
 
order, and
5
 
(ii)
a copy of the varied order to the liable person and, in the
 
 
case of a joint account, each other account holder.
 
 
(7)
See paragraph 13 for provisions about varying a direct deduction order.
 

Appeals

 
 
19
(1)
A relevant person may appeal to the First-tier Tribunal against—
10
 
(a)
the making of a direct deduction order,
 
 
(b)
the variation of a direct deduction order, or
 
 
(c)
a refusal to vary a direct deduction order after a request by a
 
 
relevant person.
 
 
(2)
A relevant person may not appeal under sub-paragraph (1) in relation to
15
 
a matter within paragraph (a) , (b) or (c) of that sub-paragraph unless they—
 
 
(a)
made representations in accordance with paragraph 5 , 12 or 13 (or,
 
 
in relation to a variation of a direct deduction order, requested the
 
 
variation), or
 
 
(b)
sought a review under paragraph 18 ,
20
 
in relation to the matter.
 
 
(3)
Sub-paragraph (2) does not apply where a direct deduction order is varied
 
 
on a review under paragraph 18 .
 
 
(4)
An appeal under sub-paragraph (1) must be brought within the period of
 
 
one month beginning with the day after the day on which the appellant
25
 
was—
 
 
(a)
given a copy of the direct deduction order, or the varied deduction
 
 
order, in a case within sub-paragraph (1) (a) or (b) , or
 
 
(b)
notified under sub-paragraph (3) or, where a review was sought,
 
 
paragraph 18 (6) , in a case within sub-paragraph (1) (c) .
30
 
(5)
An appeal under sub-paragraph (1) may not be made on, or include, any
 
 
ground relating to the existence or amount of a recoverable amount (unless
 
 
the amount is said to be incorrectly stated in the order).
 
 
(6)
Where a relevant person appeals under this paragraph in relation to a
 
 
direct deduction order, the First-tier Tribunal may suspend the requirement
35
 
on the bank to which the order has been given to give effect to the order
 
 
for some or all of the time until the appeal (including any onward appeal)
 
 
is withdrawn, abandoned or finally determined.
 
 
(7)
On an appeal under sub-paragraph (1) , the First-tier Tribunal may—
 
 
(a)
amend the direct deduction order;
40
 
(b)
revoke the direct deduction order;
 

Page 108

 
(c)
dismiss the appeal.
 
 
(8)
In this paragraph, “relevant person” has the meaning that it has in
 
 
paragraph 18 .
 

Part 2

 

Penalties

5

Penalties for failure to comply

 
 
20
(1)
If the Secretary of State has reasonable grounds to believe that a bank—
 
 
(a)
has failed to comply with a requirement imposed by or under this
 
 
Schedule, and
 
 
(b)
has no reasonable excuse for the failure,
10
 
the Secretary of State may impose on the bank a penalty of £500.
 
 
(2)
The Secretary of State may not impose a penalty before giving the bank
 
 
an opportunity to make representations about their compliance.
 
 
(3)
The Secretary of State imposes a penalty by giving the bank a notice of the
 
 
penalty (a “penalty notice”).
15
 
(4)
A penalty notice must state—
 
 
(a)
the amount of the penalty,
 
 
(b)
the period within which it must be paid, and
 
 
(c)
the bank’s right to appeal against the penalty.
 
 
(5)
The Secretary of State may vary or revoke a penalty notice by giving a
20
 
notice to that effect to the bank.
 

Recovery of penalties

 
 
21
(1)
In England and Wales, a penalty imposed under this Part of this Schedule
 
 
is recoverable—
 
 
(a)
if the county court so orders, as if it were payable under an order
25
 
of that court;
 
 
(b)
if the High Court so orders, as if it were payable under an order
 
 
of that court.
 
 
(2)
In Scotland, a penalty imposed under this Part of this Schedule may be
 
 
enforced in the same manner as an extract registered decree arbitral bearing
30
 
a warrant for execution issued by the sheriff court of any sheriffdom in
 
 
Scotland.
 

Appeal against a penalty notice

 
 
22
(1)
A bank on which a penalty is imposed under paragraph 20 may appeal to
 
 
the First-tier Tribunal against the imposition of the penalty.
35

Page 109

 
(2)
An appeal under sub-paragraph (1) may not be brought after the end of
 
 
the period of one month beginning with the date on which the penalty
 
 
notice in relation to the penalty being appealed was given.
 
 
(3)
On an appeal under sub-paragraph (1) the Tribunal may confirm or quash
 
 
the decision to impose the penalty.
5
 
(4)
If an appeal is brought under sub-paragraph (1) , the penalty which is the
 
 
subject of the appeal is not payable until the appeal (including any onward
 
 
appeal) is determined or withdrawn.
 

Part 3

 

General

10

Interpretation

 
 
23
(1)
In this Schedule—
 
 
“bank” means a person who is authorised—
 
 
(a)
to accept deposits, or
 
 
(b)
to issue electronic money;
15
 
“direct deduction order” means a regular direct deduction order or a
 
 
lump sum direct deduction order;
 
 
“joint account” means an account held by more than one person;
 
 
“lump sum direct deduction order” has the meaning given by
 
 
paragraph 1 (5) ;
20
 
“regular direct deduction order” has the meaning given by paragraph
 
 
1 (4) ;
 
 
“sole account” means an account held by one person.
 
 
(2)
For the purposes of paragraph (a) in the definition of “bank” in
 
 
sub-paragraph (1) —
25
 
(a)
the reference to accepting deposits is to carrying on the regulated
 
 
activity of accepting deposits for the purposes of the Financial
 
 
Services and Markets Act 2000 (see section 22 of that Act and article
 
 
5 of the Financial Services and Markets Act 2000 (Regulated
 
 
Activities) Order 2001 (S.I. 2001/544)), and
30
 
(b)
a person is authorised to accept deposits if they are an authorised
 
 
person or an exempt person in relation to the carrying on of that
 
 
activity for the purposes of the Financial Services and Markets Act
 
 
2000.
 
 
(3)
For the purposes of paragraph (b) in the definition of “bank” in
35
 
sub-paragraph (1) , a person is authorised to issue electronic money if—
 
 
(a)
the person is an electronic money institution, and
 
 
(b)
the person is authorised or registered under Part 2 of the Electronic
 
 
Money Regulations 2011 (S.I. 2011/99) in relation to carrying on the
 
 
activity of issuing electronic money.
40

Page 110

 
(4)
In sub-paragraph (3) , “electronic money” and “electronic money institution”
 
 
have the meanings given by regulation 2(1) of those Regulations (and
 
 
references to the issue of electronic money are to be construed in accordance
 
 
with those Regulations).
 
 
(5)
In this Schedule, references to an amount in an account are to an amount
5
 
standing to the credit of the account.
 
 
(6)
In this Schedule, references to a person holding an account include
 
 
references to—
 
 
(a)
a person holding an account jointly with one or more other persons,
 
 
(b)
a person being a signatory, or one of the signatories, to an account,
10
 
and
 
 
(c)
an account being, in any other way, in the person’s name,
 
 
and “holder” is to be read accordingly.
 

Regulations

 
 
24
(1)
Regulations may make further provision about direct deduction orders.
15
 
(2)
Regulations under this paragraph may, among other things, make
 
 
provision—
 
 
(a)
about how notices and orders are to be given by the Secretary of
 
 
State under this Schedule;
 
 
(b)
about how notices and information are to be given to the Secretary
20
 
of State under this Schedule;
 
 
(c)
about the calculation of amounts to be deducted, including—
 
 
(i)
about establishing whether deductions would cause a person
 
 
to suffer hardship in meeting essential living expenses, and
 
 
(ii)
about amounts which are, or are not, to be taken into account
25
 
in calculating the amounts credited to an account for the
 
 
purposes of paragraph 6 (3) ;
 
 
(d)
setting a maximum percentage that is less than 40% for the purposes
 
 
of paragraph 6 (3) in some or all cases;
 
 
(e)
amending the amount for the time being specified in paragraph
30
 
20 (1) to reflect a change in the value of money;
 
 
(f)
about the duties of banks in relation to direct deduction orders,
 
 
including before a direct deduction order is made;
 
 
(g)
about costs which a bank may recover by virtue of paragraph 8 or
 
 
from the Secretary of State;
35
 
(h)
about the interaction between direct deduction orders under this
 
 
Schedule and similar orders under any other enactment.
 
 
(3)
Regulations under this paragraph may, among other things, apply this
 
 
Schedule, as it applies to banks, to other types of person who provide
 
 
financial products or services (including products or services that operate
40
 
by reference to cryptoassets or any similar product or service).
 

Page 111

 
(4)
In sub-paragraph (3) , “cryptoasset” has the meaning given in section 84A
 
 
of the Proceeds of Crime Act 2002.
 
 
(5)
Before making relevant regulations in reliance on sub-paragraph (2) (a) , (b) ,
 
 
(f) or (g) , the Secretary of State must consult—
 
 
(a)
persons who appear to the Secretary of State to represent the
5
 
interests of banks, and
 
 
(b)
such other persons (if any) as the Secretary of State considers
 
 
appropriate.
 
 
(6)
Before making relevant regulations in reliance on sub-paragraph (3) , the
 
 
Secretary of State must consult—
10
 
(a)
persons who appear to the Secretary of State to represent the
 
 
interests of persons to whom provisions about direct deduction
 
 
orders would be applied by the regulations, and
 
 
(b)
such other persons (if any) as the Secretary of State considers
 
 
appropriate.
15
 
(7)
In this paragraph, “relevant regulations” means—
 
 
(a)
the first regulations made in reliance on the provisions in question,
 
 
and
 
 
(b)
any subsequent regulations made in reliance on those provisions
 
 
which—
20
 
(i)
impose new duties on banks, or
 
 
(ii)
make changes to existing duties or provisions which, in the
 
 
opinion of the Secretary of State, are more than minor.”
 
 
Schedule 6
Section 91
 

Disqualification from driving

25
 
The Schedule to be inserted in the Social Security Administration Act 1992 after
 
 
Schedule 3ZA (inserted by section 90 (3) of this Act) is—
 
 
“Schedule 3ZB
Section 80C
 

Disqualification from driving

 

Suspended DWP disqualification orders

30
 
1
(1)
This Schedule applies where—
 
 
(a)
the Secretary of State has sought to recover a recoverable amount
 
 
from a liable person, and
 
 
(b)
some or all of the amount has not been recovered.
 
 
(2)
Where the amount still to be recovered is at least £1,000, the Secretary of
35
 
State may apply to the court for a suspended DWP disqualification order
 
 
(but see sub-paragraph (7) ).
 

Page 112

 
(3)
A suspended DWP disqualification order is an order—
 
 
(a)
setting out terms of repayment with which the liable person must
 
 
comply, and
 
 
(b)
stating that the liable person may be subject to an immediate DWP
 
 
disqualification order if the person fails to comply with the terms
5
 
of repayment.
 
 
(4)
Subject to sub-paragraph (6) , the court must make a suspended DWP
 
 
disqualification order if the court is satisfied, on the balance of probabilities,
 
 
that the liable person has, without reasonable excuse, not paid the
 
 
recoverable amount.
10
 
(5)
The terms of repayment must include terms for the payment of any costs
 
 
awarded by the court to the Secretary of State relating to the order.
 
 
(6)
The court may not make a suspended DWP disqualification order if the
 
 
court considers that the liable person—
 
 
(a)
needs a driving licence to earn a living, or
15
 
(b)
has another essential need for a driving licence.
 
 
(7)
The Secretary of State may apply for a second or subsequent suspended
 
 
DWP disqualification order in relation to a recoverable amount even if the
 
 
amount still to be recovered has fallen to less than £1,000.
 
 
(8)
A suspended DWP disqualification order ceases to have effect when—
20
 
(a)
revoked under paragraph 4 , or
 
 
(b)
the Secretary of State has recovered the whole of the recoverable
 
 
amount and the costs mentioned in sub-paragraph (5) from the
 
 
liable person.
 
 
(9)
Before determining an application under this paragraph the court must
25
 
give the Secretary of State and the liable person an opportunity to be heard.
 
 
(10)
In this Schedule—
 
 
“the court” means—
 
 
(a)
in England and Wales, a magistrates’ court, and
 
 
(b)
in Scotland, a sheriff or a summary sheriff;
30
 
“driving licence” means a licence to drive a motor vehicle granted
 
 
under Part 3 of the Road Traffic Act 1988.
 

Immediate DWP disqualification orders

 
 
2
(1)
Subject to sub-paragraph (6) , if a liable person fails to comply with terms
 
 
of repayment in a suspended DWP disqualification order, the Secretary of
35
 
State may apply to the court for an immediate DWP disqualification order.
 
 
(2)
An immediate DWP disqualification order is an order—
 
 
(a)
setting out terms of repayment with which the liable person must
 
 
comply, and
 

Page 113

 
(b)
disqualifying the liable person from holding or obtaining a driving
 
 
licence for such period as the court considers likely to result in the
 
 
person paying the recoverable amount to the Secretary of State
 
 
(3)
Subject to sub-paragraph (5) , if the court is satisfied on the balance of
 
 
probabilities that the liable person has failed, without reasonable excuse,
5
 
to comply with terms of repayment in a suspended DWP disqualification
 
 
order, the court must make an immediate DWP disqualification order on
 
 
an application under sub-paragraph (1) .
 
 
(4)
The period mentioned in sub-paragraph (2) (b) may not be longer than 2
 
 
years beginning with the day on which the order is made.
10
 
(5)
The court may not make an immediate DWP disqualification order if the
 
 
court is of the opinion that the liable person—
 
 
(a)
needs a driving licence to earn a living, or
 
 
(b)
has another essential need for a driving licence.
 
 
(6)
Where the terms of repayment provide for repayment in instalments, the
15
 
failure to pay a single instalment is not to be regarded as a failure to comply
 
 
with the terms unless the liable person fails to repay the entire recoverable
 
 
amount by the time the final instalment is due.
 
 
(7)
The Secretary of State may apply for more than one immediate DWP
 
 
disqualification order in relation to the same suspended DWP
20
 
disqualification order.
 
 
(8)
Before determining an application under this paragraph the court must
 
 
give the Secretary of State and the liable person an opportunity to be heard.
 

Terms of repayment

 
 
3
The court must be satisfied that the terms of repayment set out in a
25
 
suspended or immediate DWP disqualification order are ones with which
 
 
the liable person has the means to comply.
 

Variation and revocation of orders

 
 
4
(1)
On an application by the liable person or the Secretary of State, the court
 
 
may, where some of the recoverable amount to which a suspended or
30
 
immediate DWP disqualification order relates has been recovered, make
 
 
an order varying, or revoking, a suspended or immediate DWP
 
 
disqualification order.
 
 
(2)
But the court may revoke a suspended or immediate DWP disqualification
 
 
order in reliance on sub-paragraph (1) only where the court considers that
35
 
revoking the order will increase the likelihood of the remainder of the
 
 
recoverable amount being recovered.
 
 
(3)
When considering an application under sub-paragraph (1) , the court must
 
 
invite representations from—
 
 
(a)
the Secretary of State, where the application was made by the liable
40
 
person, and
 

Page 114

 
(b)
the liable person, where the application was made by the Secretary
 
 
of State,
 
 
or give both the Secretary of State and the liable person an opportunity to
 
 
be heard.
 
 
(4)
The court may vary or revoke a suspended or immediate DWP
5
 
disqualification order on an application from the liable person where—
 
 
(a)
the order was made without the liable person being heard despite
 
 
being given an opportunity to be heard under paragraph 1 (9) , and
 
 
(b)
the court considers that the liable person had a good reason for not
 
 
taking advantage of the opportunity to be heard.
10
 
(5)
An application under sub-paragraph (4) must be made within the period
 
 
of 21 days beginning with the day after the day on which the liable person
 
 
is given notice that the order has been made.
 
 
(6)
Before determining an application under this paragraph, the court must
 
 
give the Secretary of State and the liable person an opportunity to be heard.
15
 
(7)
Where the Secretary of State has recovered the whole of the recoverable
 
 
amount and the costs mentioned in paragraph 1 (5) from a liable person
 
 
subject to an immediate DWP disqualification order—
 
 
(a)
the Secretary of State must notify the court, and
 
 
(b)
a court officer must make an order (without a hearing) revoking
20
 
the immediate DWP disqualification order.
 
 
(8)
In this paragraph, references to varying a suspended or immediate DWP
 
 
disqualification order includes varying the terms of repayment set out in
 
 
the order.
 
 
(9)
In sub-paragraph (7) (b) , “court officer” means a member of the staff of the
25
 
court authorised by the court for the purposes of that sub-paragraph.
 

Holding of driving licence for period of disqualification

 
 
5
Where the court makes an immediate DWP disqualification order, the
 
 
court—
 
 
(a)
may require the liable person to whom the order relates to give to
30
 
the court by, or on, a specified date any driving licence which the
 
 
liable person holds, and
 
 
(b)
must transfer each driving licence received in accordance with
 
 
paragraph (a) to the Secretary of State.
 

Appeals

35
 
6
(1)
The liable person or the Secretary of State may appeal to the appropriate
 
 
appellate court on a point of law against—
 
 
(a)
a decision to, or not to, make, vary or revoke a DWP disqualification
 
 
order;
 
 
(b)
the terms of a DWP disqualification order.
40

Page 115

 
(2)
An appeal under this paragraph must be made within the period of 21
 
 
days beginning with the day after the day on which notice of the decision
 
 
to which it relates is given.
 
 
(3)
On an appeal under this paragraph, the appropriate appellate court may—
 
 
(a)
where the appeal relates to a DWP disqualification order that has
5
 
been made—
 
 
(i)
dismiss the appeal,
 
 
(ii)
vary the order in any way that would have been available
 
 
to the court that made it, or
 
 
(iii)
revoke the order, or
10
 
(b)
where the appeal is against a decision not to make a DWP
 
 
disqualification order—
 
 
(i)
dismiss the appeal, or
 
 
(ii)
make a DWP disqualification order that the court could have
 
 
made.
15
 
(4)
In this Schedule, the “appropriate appellate court” means—
 
 
(a)
in England and Wales, the Crown Court, and
 
 
(b)
in Scotland, the Sheriff Appeal Court.
 

DWP disqualification orders: further provision

 
 
7
(1)
A court must give the Secretary of State and the liable person notice if—
20
 
(a)
it makes or refuses to make a suspended or immediate DWP
 
 
disqualification order,
 
 
(b)
it makes or refuses to make an order under paragraph 4 , or
 
 
(c)
it allows an appeal against a suspended or immediate DWP
 
 
disqualification order.
25
 
(2)
Notice under this paragraph is to be given to the Secretary of State in such
 
 
manner and to such addresses, and to contain such particulars, as the
 
 
Secretary of State may require.
 
 
(3)
The court may grant permission for an application or an appeal after the
 
 
periods mentioned in paragraphs 4 (5) and 6 (2) (as the case may be) where
30
 
satisfied that there is a compelling reason to do so.
 
 
(4)
Regulations may make provision for the purposes of enabling the court to
 
 
assess the matters mentioned in paragraphs 1 (6) , 2 (5) and 3 .
 
 
(5)
In this paragraph, the reference to “a court” is to “the court” and “the
 
 
appropriate appellate court”.
35

Information sharing

 
 
8
A public authority that holds information about a liable person’s driving
 
 
licence may, on a request by the Secretary of State, disclose that information
 
 
to the Secretary of State for the purpose of facilitating the exercise of the
 
 
Secretary of State’s functions under this Schedule.
40

Page 116

Northern Ireland licences

 
 
9
(1)
Section 109(1) of the Road Traffic Act 1988 (Northern Ireland licences) has
 
 
effect subject to any provision made by or under this Schedule.
 
 
(2)
For the purposes of that section, the reference in paragraph 2 (2) (b) to
 
 
disqualifying a person from holding or obtaining a driving licence is to be
5
 
read as a reference to disqualifying a person from driving any vehicle
 
 
under Part 3 of the 1988 Act.”
 
Amendments

No amendments available.