The Public Authorities (Fraud, Error, and Recovery) Act 2025 achieved Royal Assent on Tuesday 2 December 2025. The Act will help to address the significant challenge of public sector fraud and error, which costs the taxpayer billions of pounds annually.

The different measures contained in the Act are due to come into force across different dates between 2026 and 2029.

Whilst the Debt measures contained in the Act commenced in June 2026, the supporting regulations which will further develop the operational framework for the new recovery powers introduced in the Act will not come into force until October. As a result, to date, no direct deduction orders have been issued.

Where a tribunal decision overturns a Universal Credit overpayment, the decision is implemented through established DWP appeals and decision-making processes. Any resulting change to the claimant’s liability is recorded on the relevant systems and shared with Debt Management, enabling recovery action, including deductions from earnings, to be updated or ceased promptly, where appropriate.

The government response to the consultation on Protection against Detriments for Taking Industrial Action, published 23 June 2026, states that the government does not plan to change the common law rules allowing pay deductions for industrial action, including partial performance. This is an area of law continuing to develop in the courts.

The draft Protection Against Detriment (Industrial Action) Regulations 2026, to be made under section 236A Trade Union and Labour Relations (Consolidation) Act 1992, prohibiting the use of detriments to penalise or deter protected industrial action, were laid in Parliament on 24 June 2026 and are consistent with this position.

When a tribunal decision changes a claimant’s benefit entitlement, the decision is implemented through established DWP processes. Where this results in an award overpayment or underpayment, the revised liability is calculated and where appropriate, the relevant information is passed to Debt Management so that any necessary debt recovery adjustments can be completed.

The process in place to prioritise refunds is through a designated inbox, which is monitored daily. If a customer is experiencing financial hardship they should contact DWP Debt Management to discuss their situation, including any follow-up about a potential refund after a successful mandatory reconsideration or appeal dispute.

Workers should be able to enforce their employment rights in a timely manner. As of April 2026, the average time from claim receipt to disposal was 59.6 weeks. Most one- and two-day hearings are currently being listed in 2026, although waiting times for longer hearings vary geographically.

We recognise the significant pressures facing Employment Tribunals and are taking action to increase capacity and reduce waiting times. This includes funding 32,590 sitting days in 2026/27, recruiting additional Employment Judges and operating a virtual region which enables 2,000 sitting days a year to be heard without geographical restriction.

New debt recovery powers agreed by Parliament in the Public Authorities (Fraud, Error and Recovery) Act 2025 are designed to increase fairness and to more effectively and efficiently be able to recover debt from individuals who are not in receipt of benefit or in suitable PAYE employment.

These powers will encourage voluntary repayment as well as ensuring that there is recourse for those who have the means to repay but do not.

Use of these Debt Recovery powers is governed by the published DWP Direct Deduction and Disqualification from Driving Orders Code of Practice, which sets out the strict safeguards that must be followed before any enforcement action is taken.

All DWP debt recovery activity, including through Direct Deduction Order’s or Driving Disqualification only take place once an overpayment decision has been made and communicated to the customer. This communication includes information on mandatory reconsideration and appeal rights.

Deductions from Universal Credit help support customers to manage debts by paying the creditor directly from their benefit, for instance paying rent arrears to ensure the customer does not face eviction. The most effective way to reduce reliance on deductions is to prevent arrears and debt in the first place, including by supporting people to increase their household income through work.

To support those with deductions, on 30 April 2025, the Fair Repayment Rate was implemented. This policy reduced the overall deductions cap from 25% to 15% of a customer’s Universal Credit (UC) standard allowance, enabling approximately 1.2 million UC households to retain more of their award, on average, £420 a year or £35 per month.

DWP is committed to supporting those who may be struggling with their repayment terms. Customers who feel they cannot afford the proposed repayment terms are encouraged to contact the DWP, so we can understand their circumstances and agree an affordable and sustainable repayment plan.

Statistics related to deductions for households on Universal Credit are published. The relevant figures can be found in tables 6 and 7 of the Universal Credit deductions statistics March 2025 to February 2026, supplementary data tables here: Universal Credit quarterly statistics, 29 April 2013 to 12 February 2026 - GOV.UK

A narrative supporting the published deductions statistics is also available at Universal Credit deductions statistics March 2025 to February 2026 - GOV.UK

Information on the number of households subjected to the Removal of the Spare Room Subsidy (RSRS) and average RSRS amount is available on Stat-Xplore via the Housing Benefit and Universal Credit official statistics.

The Department has considered the potential fiscal impacts of the decision to reduce the maximum Universal Credit deduction rate.

(a) No separate assessment has identified an impact on public sector net borrowing, as any effects are already reflected in the Government’s existing fiscal forecasts.

(b) and c) Please see paragraph 5.134 on page 138 in this link for published information:

https://assets.publishing.service.gov.uk/media/672b9695fbd69e1861921c63/Autumn_Budget_2024_Accessible.pdf

(d) No additional impact has been quantified on Annually Managed Expenditure.
(e) No additional impact has been quantified on Total Managed Expenditure.

The Fair Repayment Rate was announced in the 2024 Autumn Budget, and reduced deductions from Universal Credit from 25% to 15%. This measure helped around 1.2 million Universal Credit households with deductions retain more of their Universal Credit award, on average £420 a year, supporting the Government’s wider objectives to raise living standards, reduce poverty, and respond to ongoing cost‑of‑living pressures.