Good morning

The Public Authorities (Fraud, Error, and Recovery) Act 2025 received Royal Assent on 2nd December 2025 and represents the latest phase in the Government’s plan to implement a range of measures to strengthen the integrity of the social security system, prevent overpayments, minimise fraud and ensure that when overpayments occur, they are recovered as robustly and effectively as possible. The overarching goal is to save £1.5 billion by 2030, as part of a broader initiative to secure £14.6 billion in savings from fraud, error, and debt activity by 2031.

Key Measures Introduced by the Legislation

  • Enhanced powers allowing DWP to investigate suspected fraud and identify overpayments, including new access to bank data and modern analytical tools.
  • Making direct deductions from bank accounts for fraudsters and debtors makes it easier to recover money more quickly and effectively.
  • Further deployment of up to 3,000 additional staff to bolster investigative and analytical capacity within the DWP.
  • Extension of the “Targeted Case Review” by its in-house “Enhanced Review Team”, of new claims and existing awards, which is expected to save an additional £1.2 billion in 2030-31 by identifying and correcting incorrect payments, creating and recovering overpayments.

Universal Credit Claimants will be targeted

Universal Credit claimants will face increased scrutiny as part of the Government’s drive to minimise fraud and error across the welfare system. The DWP’s enhanced powers, combined with the appointment of 3000 new staff, will result in more frequent and rigorous checks on new claims and ongoing awards, including increased access to third-party data sources to verify information provided by claimants. The Targeted Case Review will focus specifically on Universal Credit “high-risk” cases, in the hope of identifying and correcting inaccuracies, and ensuring payments are legitimately made. Those found to have received overpayments, whether through error or deliberate misrepresentation, may ultimately face penalty sanctions, direct deductions from their ongoing award or, where that’s not possible, through bank account attachments.

How Can Claimants Avoid Overpayments?

  • Promptly update the DWP about any changes in personal circumstances, such as changes in income, employment status, living arrangements, or household composition. The most effective way is via the UC journal dropdown box facility.
  • Carefully review all correspondence from the DWP and respond quickly to requests for information or evidence. Failure to do so can result in benefit suspensions and terminations.
  • Keep accurate records of all communications and documents submitted in support of a claim and regularly check UC journals for “To-do” requests for information.
  • Seek advice from CAB or local welfare benefit support services if unsure about reporting requirements or eligibility.

By remaining vigilant and transparent, Universal Credit claimants can help prevent overpayments and avoid the risk of having to repay funds or face financial penalties under the new legislation.

What can landlords do to assist tenants?

Landlords providing accommodation to benefit reliant tenants should be able and willing to assist, especially those tenants who are disabled or unlikely to engage directly with DWP. Tenants, in those situations, can provide explicit consent by posting on their journal or, along with the landlord, make a call to DWP or visit the local Job Centre. Making that kind of investment is likely to minimise the potential losses to both tenants and landlords.

Will the new legislation adversely affect landlords?

Almost certainly, if you accommodate benefit-dependent tenants. We already know, Universal Credit overpayments represent a four-fold increase in the numbers of their Housing Benefit equivalent.

Unlike Housing Benefit, all overpayments are recoverable, and the default position is to pursue recovery, initially, against the person or organisation that received payment of the “housing costs” element. If Direct Payments were being made during the period of the overpayment, that means the landlord, although there are limited grounds to challenge.

Unlike housing benefit, DWP will commence recovery through its Debt Management Team, usually one month after the decision to recover has been made. It has made clear that, unlike councils administering housing benefit, it has no plans to suppress recovery, even when Mandatory Reconsiderations and appeals have been lodged.

When a change of address by the tenant results in an overpayment, the default is to pursue the landlord, not the person who caused the overpayment, usually the tenant in past HB cases. If a tenant moves out of your property a day or so before the end of their benefit assessment period, the DWP will again pursue the landlord if you have received payment for the period in question.

If DWP itself causes the overpayment, it’s still recoverable, albeit, more likely from the tenant, but by making punitive deductions to the monthly Direct Payments you receive, which, in turn, can cause rent arrears if the tenant doesn’t pay the shortfall.

If new claim decisions are delayed or existing awards are suspended for weeks or months on end, as currently is happening, arrears will inevitably accrue. In the case of affected awards, any direct payments currently in operation will be similarly stopped, causing the need for later reapplications to ensure reinstatement.

Is there anything tenants and landlords can do to mitigate some of these potential problems?

The short answer is, yes, there are things you can do. Firstly, tenants should seek help locally from CAB and Welfare Benefit advice agencies, who operate by appointment and are free of charge. Landlords can also greatly assist by helping your tenants and your organisation challenge decisions promptly and effectively.

I’m proposing to run courses in-house and via Zoom/Teams during 2026. More details on this will follow, but if you’re interested in learning more beforehand, phone 07733 080 389 or email bill@ucadvice.co.uk   

Regards

Bill Irvine

UC Advice & Advocacy Ltd

Phone 07733 080 389