(1) The Social Security Administration Act 1992 is amended as follows.
(2) In Part 3, after section 80 insert—
Further provision about recovery
Further methods of recovery
80A (1) This section applies in relation to—
(a) section 80B (restrictions on use of further methods),
(b) section 80C (and Schedule 3ZA) (recovery from a person’s bank accounts etc), and
(c) section 80D (and Schedule 3ZB) (disqualification from driving).
(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,
other than an amount or a penalty relating to a devolved benefit.
(3) For the purposes of this Part, a benefit is a devolved benefit if functions under this Part are exercisable in relation to the benefit by the Scottish Ministers by virtue of section 53 of the Scotland Act 1998, read with section 32 of the Scotland Act 2016.
(4) References to a “liable person” are to a person liable to pay a recoverable amount.
(5) Nothing in Schedule 3ZA or Schedule 3ZB affects any other method of recovery or enforcement that is available in relation to a recoverable amount.
Restrictions relating to further methods
80B (1) 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 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 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.
(2) The Secretary of State may not—
(a) make a direct deduction order under Schedule 3ZA,
(b) re-start a requirement to make deductions and payments that has been suspended under paragraph 16 of Schedule 3ZA, or
(c) apply for a suspended or immediate DWP disqualification order under Schedule 3ZB,
in respect of a liable person if subsection (3) or (4) applies.
(3) This subsection applies if it is reasonably possible to recover the amount from the liable person by way of deductions from earnings.
(4) This subsection applies if the liable person is entitled to and in receipt of a relevant benefit.
(5) The Secretary of State may not exercise the powers under Schedule 3ZB for the purpose of recovering an amount from a liable person unless satisfied that it is not reasonably possible to recover the amount by way of a direct deduction order under Schedule 3ZA.
(6) Subsections (7) and (8) apply where a liable person becomes entitled to and in receipt of a relevant benefit at a time when—
(a) a direct deduction order under Schedule 3ZA, or
(b) an immediate DWP disqualification order under Schedule 3ZB,
has effect in relation to the liable person.
(7) In a case within subsection (6)(a), the Secretary of State must revoke or suspend the direct deduction order.
(8) In a case within subsection (6)(b)—
(a) the Secretary of State must notify the court that made the immediate DWP disqualification order that the person to whom the order relates has become entitled to and in receipt of a relevant benefit, and
(b) a court officer must make an order (without a hearing) revoking the immediate DWP disqualification order.
(9) In this section—
“court officer” means a member of the staff of the court in question authorised by the court for the purposes of subsection (8)(b);
“deductions from earnings” means deductions from earnings under, or by virtue of, section 71 or 71ZD;
“relevant benefit” means a benefit that is—
administered by the Secretary of State with responsibility for social security, and
recoverable under section 71 or 71ZB.
(3) In section 111 (delay, obstruction etc of inspector), in subsection (1)(b), after “otherwise than” insert “under Schedule 3ZA, Schedule 3B or”.
(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 paragraph 2(2) of Schedule 3ZB;
;
“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 paragraph 1(3) of Schedule 3ZB;
.
(1) The Social Security Administration Act 1992 is amended as follows.
(2) After section 80B (inserted by section 94 of this Act) insert—
Recovery from bank accounts
80C 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.
(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 25(3) of Schedule 3ZA; or
.
(1) The Social Security Administration Act 1992 is amended in accordance with subsections (2) and (3).
(2) After section 80C (inserted by section 95(2) of this Act) insert—
Disqualification from driving
80D Schedule 3ZB makes provision for a liable person to be disqualified from driving while some or all of a recoverable amount remains unrecovered.
(3) After Schedule 3ZA (inserted by section 95(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 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 end of paragraph (a)—
(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
.
(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” insert “paragraph 5 of Schedule 3ZB to the Social Security Administration Act 1992,”.
In the Social Security Administration Act 1992, after section 80D (inserted by section 96 of this Act) insert—
Code of practice
80E (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—
(a) the giving of notices to banks requiring the provision of information under Schedule 3ZA;
(b) the processing (within the meaning of section 3(4) of the Data Protection Act 2018) 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 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.
(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.
In the Social Security Administration Act 1992, after section 80E (inserted by section 97 of this Act) insert—
Rights of audience
80F (1) An officer of the Secretary of State who is authorised by the Secretary 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,
(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.
(1) The Social Security Administration Act 1992 is amended as follows.
(2) In section 71ZE, omit subsection (3).
(3) After section 80F (inserted by section 98 of this Act) insert—
Recovery of costs
80G 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.
In the Social Security Administration Act 1992, after section 80G (inserted by section 99 of this Act) insert—
Recovery: further provision
80H (1) Subsection (2) applies in relation to any provision for the disclosure or obtaining of information made by or under this Part.
(2) The provision does not require or authorise any disclosure of information that is prohibited by any of Parts 1 to 7 or Chapter 1 of Part 9 to the Investigatory Powers Act 2016.
(3) 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
(b) any other restriction on the disclosure of information (however imposed).
(4) In this Part, references to giving a notice or other document (however expressed) include sending the notice or document by post.
(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” 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 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 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 a non-benefit payment for themselves or another person, they—
(a) make a statement or representation which they know to be false, or
(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—
(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 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.
(4) In section 121DA(5) (interpretation of Part 6), at the appropriate place insert—
“non-benefit payment” means a prescribed payment which—
is not a payment of a relevant social security benefit, and
is made by the Secretary of State with responsibility for social security for the purposes of providing financial assistance to a person, whether directly or indirectly.
102 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).
(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
(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
(b) if P sought a review of the notice within the time allowed, the review has taken place, and—
(i) the period mentioned in section 71ZK(6)(a) for P to appeal against 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 or finally determined.
(3) In subsection (2)(a), after “above” insert “, or in relation to the overpayment notice referred to in subsection (1B),”.
(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 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”.
103 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)—
(a) in paragraph (a)—
(i) omit the words from “section 115A” to “or”, and
(ii) for the words “the corresponding provision for Northern Ireland” substitute “penalty as alternative to prosecution in Northern Ireland”, 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
(b) in subsection (3) omit the words “the Social Security Act 1998 or”.
(1) The following provisions of this Act have effect as if they were pre-commencement enactments for the purposes of section 53 of the Scotland Act 1998, read with section 32 of the Scotland Act 2016—
(a) sections 76 and 77;
(b) section 99, so far as relating to an amount that is recoverable by the Scottish Ministers under Part 3 of the Social Security Administration Act 1992;
(c) section 100.
(2) Accordingly, an individual who for the time being has the Scottish Ministers’ authorisation for the purposes of Part 6 of the Social Security Administration Act 1992, in accordance with section 109A of that Act as amended by section 76 of this Act, has the functions conferred by sections 109B to 109C of that Act, as amended or, in the case of section 109BZA, as inserted, by section 76 of this Act.
(1) Subject to subsection (2), any function conferred by a provision of this Act (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 public authority on which the function is conferred) was entitled to recover before the provision comes into force.
(2) Subsection (1)(a) does not apply in relation to the amendments made by—
(a) section 101 (offences: non-benefit payments), and
(b) section 102 (penalty as alternative to prosecution: extension to non-benefit payments).
(3) Subsection (4) applies in relation to an action—
(a) for an amount that a relevant 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 12 years from the date on which the cause of action accrues would otherwise have applied.
(4) The time limit for bringing the action is 12 years beginning with the day on which the relevant public authority discovers the fraud or could with reasonable diligence discover it (whether that day is before, on or after the day on which this section comes into force).
(5) For the purposes of subsections (3) and (4)—
(a) a “relevant public authority” is a person who—
(i) exercises functions of a public nature, and
(ii) is not a devolved Scottish 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.
(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)—
(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 Recovery) Act 2025,
.
(8) In the Prescription and Limitation (Scotland) Act 1973, in Schedule 1 (obligations affected by prescriptive periods of 5 years under section 6), in paragraph 2(fb)(i), at the end insert “, including as amended by the Public Authorities (Fraud, Error and Recovery) Act 2025”.
(1) The Secretary of State or the Minister may by regulations make provision that is consequential on this Act.
(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.
(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 subject to annulment in pursuance of a resolution of either House of Parliament.
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 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.
(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.
(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—
(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 or different areas.
(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.
(6) Regulations under this section are to be made by statutory instrument.
Schedule 1 Fraud against public authorities: Police and Criminal Evidence Act 1984 powers
Section 7
Introduction
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 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 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 “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 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 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 officer, or has a grade equivalent to that of a higher executive officer, who has been authorised in writing 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 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—
(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 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) Subsection (2B) applies where an authorised investigator—
(a) has seized something or taken something away following a requirement made by virtue of section 19 or 20 on the basis that it is evidence of an offence, and
(b) considers that the thing may be evidence that is relevant to an investigation of an offence (whether or not the offence mentioned in paragraph (a)) in relation to which another person has functions.
(2B) Where this subsection applies—
(a) an authorised investigator may transfer the thing to that person,
(b) where that person considers that the thing may be evidence that is relevant to an investigation in relation to which that person has functions, that person may accept and retain the thing, and
(c) any provision of an enactment that applies to anything seized or taken away by that person applies to the thing as if it had been seized or taken away by that person for the purposes of the investigation of the relevant offence.
(2C) In subsection (2B)(c), “enactment” includes an enactment contained in subordinate legislation within the meaning of the Interpretation Act 1978.
;
(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, Error and Recovery) Act 2025.
;
(d) subsection (6) were omitted.
(5) Schedule 1 (special procedure) is to be read as if—
(a) in paragraph 1, for “one or other of the sets of access conditions” there were substituted “the first set of access conditions”;
(b) in paragraph 2(a)(ii), for “and does not also include excluded material” there were substituted “, or consists of or includes excluded material,”;
(c) paragraph 3 (second set of access conditions) were omitted;
(d) in paragraph 12—
(i) in paragraph (a)(i), for “either set of access conditions” there were substituted “the first set of access conditions”;
(ii) paragraph (b) were omitted.
Schedule 2 Public Sector Fraud Authority and transfer of functions
Section 73
Part 1 Powers to establish the PSFA and transfer functions
Main powers
1 (1) The Minister may by regulations—
(a) provide that a body corporate called the Public Sector Fraud Authority (and referred to in this Schedule as “the PSFA”) is established;
(b) provide for the transfer to the PSFA of all or any of the functions to which this paragraph applies.
(2) The Minister may by regulations provide for the transfer to a public authority other than the PSFA of all or any of the functions to which this paragraph applies.
(3) This paragraph applies to the functions initially conferred on the Minister by Chapters 1 to 5 of Part 1 of this Act (including functions conferred by an amendment of another enactment), except any function of making regulations or issuing a code of practice.
(4) A function transferred under sub-paragraph (2) may subsequently be transferred to the PSFA under sub-paragraph (1)(b).
(5) But a function transferred to the PSFA under sub-paragraph (1)(b) may not subsequently be transferred to another public authority under sub-paragraph (2).
Authorised officers
2 (1) The reference in paragraph 1(3) to functions initially conferred on the Minister includes functions initially conferred on authorised officers.
(2) In relation to a function initially conferred on an authorised officer, references in this Part of this Schedule to the transfer of the function to another body are to be read as references to the transfer of the function to an authorised officer of that body.
(3) Where—
(a) a function initially conferred on an authorised officer is transferred by regulations under paragraph 1, and
(b) as a result of any provision of Chapters 1 to 5 of Part 1 of this Act, that function could be exercised only by an authorised officer of a particular rank, grade or description,
the regulations must provide for the function to be exercised by an authorised officer of the transferee of a corresponding grade, rank or description.
(4) In this paragraph, “authorised officer” includes “authorised investigator”.
Associated modifications
3 (1) Where functions are transferred to the PSFA or another public authority under paragraph 1, the Minister may by regulations—
(a) make provision about the application, with any necessary modifications, of Part 1 of this Act in relation to the PSFA or other authority;
(b) provide for the Minister to give the PSFA or other authority (or its authorised officers) general or specific directions about the exercise of the transferred functions.
(2) Where functions are transferred to or from a public authority, other than the Minister or the PSFA, under paragraph 1, the Minister may by regulations—
(a) make any modifications that the Minister considers appropriate in connection with the transfer to the constitutional arrangements, funding arrangements or the functions of the authority;
(b) make provision in relation to the authority corresponding to that enabled by paragraph 19 (transfer schemes) in relation to—
(i) the PSFA, where functions are being transferred to the authority, or
(ii) a “relevant person”, where functions are being transferred from the authority.
(3) In sub-paragraph (2)(a), “constitutional arrangements” includes the matters referred to in section 3(2) of the Public Bodies Act 2011.
(4) Regulations under paragraph 1 or this paragraph may amend—
(a) Part 1 of this Act, except this Schedule, and
(b) any provision amended by Part 1 of this Act.
Procedure
4 Regulations under this Part of this Schedule are subject to the affirmative procedure.
Part 2 Constitution etc
Appointment of members: eligibility
10 (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.
(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.
Part 3 Power to change name
25 (1) The Minister may by regulations amend section 73 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 1(1)(a).
(3) Regulations under sub-paragraph (1) are subject to the negative procedure.
Section 78
Part 1 Eligibility verification
1 The Schedule to be inserted into the Social Security Administration Act 1992 after Schedule 3A is—
Schedule 3B
Eligibility verification
Section 121DB
Part 1 Power to require information
Power to require information by way of an eligibility verification notice
1 (1) The Secretary of State may, for the purposes of 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 steps mentioned in sub-paragraphs (3) and (4).
(2) The Secretary of State may give an eligibility verification notice only where the Secretary of State considers that it is necessary and proportionate to do so.
(3) The first step is to identify relevant accounts (see paragraph 20(1)) which—
(a) the person provides, and
(b) are accounts—
(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 paragraph.
(4) 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),
(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.
(5) Information that amounts to transaction information or special 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.
(6) 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.
(7) A person given an eligibility verification notice is not required to carry out the steps set out in sub-paragraphs (3) and (4) in relation to any account that is held outside the United Kingdom.
(8) 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 which that benefit is paid.
(9) 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
(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
(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
(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 to cryptoassets or any similar asset).
(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 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 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—
(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.
(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
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.
(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.
(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 13,
(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 notice”) may require a person to take the steps set out in paragraph 1(3) and (4) at specified intervals within a period not exceeding 1 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 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).
(8) Data is historic, in relation to an eligibility verification notice, if it relates to a time before the beginning of the period of 1 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 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).
(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 (1) Information given to the Secretary of State in response to an eligibility verification notice (“EVM information”) may be used—
(a) to 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.
(2) Sub-paragraph (3) applies where—
(a) an authorised officer is considering whether to give an information notice under section 109BZA in relation to a person, and
(b) the Secretary of State has been given EVM information that is relevant to the question whether to give the information notice.
(3) The authorised officer must have regard to all information that the Secretary of State has that is relevant to the question whether to give the information notice, including information that is not EVM information.
(4) Sub-paragraph (5) applies where—
(a) the Secretary of State is considering whether to suspend payments of a benefit to a person in accordance with regulations under section 21 or 22 of the Social Security Act 1998, and
(b) the Secretary of State has been given EVM information that is relevant to the question whether to suspend the payments.
(5) The Secretary of State must have regard to all information that the Secretary of State has that is relevant to the question whether to suspend the payments, including information that is not EVM information.
(6) Sub-paragraph (7) applies where—
(a) the Secretary of State is considering whether a decision taken under section 8, 9 or 10 of the Social Security Act 1998 in relation to a person (“the earlier decision”) should be revised or superseded, and
(b) the Secretary of State has been given EVM information that is relevant to the question whether the earlier decision should be revised or superseded.
(7) The Secretary of State must have regard to all information that the Secretary of State has that is relevant to the question whether the earlier decision should be revised or superseded, including information that is not EVM information.
Restrictions on disclosure
6 (1) This Schedule does not require or authorise any disclosure of information that is prohibited by any of Parts 1 to 7 or Chapter 1 of Part 9 of the Investigatory Powers Act 2016.
(2) Any disclosure of information carried out in accordance with this Schedule (as read subject to sub-paragraph (1)) does not breach—
(a) any obligation of confidence owed by the person disclosing the information, or
(b) any other restriction on the disclosure of information (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 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”) 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 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,
(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.
(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.
(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 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 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,
(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.
(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 periodic eligibility verification notice.
(7) In the case of a periodic eligibility verification notice, the Secretary of State may not impose more than one daily rate penalty in respect of each specified interval.
Increased daily rate penalties
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
(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.
(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.
(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
(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.
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 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
(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,
(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,
(b) failed to take reasonable steps to inform the Secretary of 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 contravention of paragraph 1(5) (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—
(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 or not the person has given information in contravention of paragraph 1(5) 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—
(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 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 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 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 value of money.
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.
(2) An application under sub-paragraph (1) must be made within the period of 14 days beginning with the day on which the notice is given.
(3) On a review, the Secretary of State may—
(a) revoke the notice,
(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
(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 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 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 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;
(c) it is unduly onerous to comply with the notice.
(2) An appeal under sub-paragraph (1) may not be brought after the end of—
(a) the period of 14 days beginning with—
(i) the day on which the eligibility verification notice was given, or
(ii) 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, or
(b) such longer period (if any) as the Tribunal considers reasonable in all the circumstances.
(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 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 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.
(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—
(a) the period of 30 days beginning with the date on which the penalty notice in relation to the penalty being appealed was given, or
(b) such longer period (if any) as the Tribunal considers reasonable in all the circumstances.
(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 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.
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 pay the penalty—
(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.
(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
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—
(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 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.
(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 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 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—
(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 General provision and interpretation
Relevant benefits
19 (1) In this Schedule “relevant benefit” means any of the following benefits—
(a) universal credit;
(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 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—
(a) a current account,
(b) a savings account, or
(c) an investment account,
including such an account which operates by reference to electronic money.
(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—
(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,
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)).
(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,
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(3)(a) to P providing an account 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(3)(b), and
(b) is able to obtain the information about those accounts mentioned in paragraph 1(4).
(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
(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 (however expressed) include sending the notice or document by post.
General interpretation
22 In this Schedule—
“benefit” means—
any relevant social security benefit as defined in section 121DA(7), other than a state pension, and
any payment mentioned in subsection (2)(d) of section 2 of the Employment and Training Act 1973, under arrangements made under that section;
“daily rate penalty” means a penalty imposed under paragraph 8(1);
“eligibility indicators” has the meaning given in paragraph 1(3)(b)(ii) (and see paragraph 3 for conditions that eligibility indicators must meet);
“eligibility verification notice” has the meaning given in paragraph 1(1);
“fixed penalty” means a penalty imposed under paragraph 7(1);
“incorrect payment” , in relation to a benefit, has the meaning given in paragraph 1(9);
“notice” means notice in writing (and “notify” is to be read 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);
“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 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 Data Protection Regulation);
“specified” means specified or described in an eligibility verification notice, unless the context requires otherwise;
“state pension” means—
a state pension under Part 1 of the Pensions Act 2014;
a retirement pension, including a Graduated Retirement Benefit, under Part 2 or 3 of the Social Security Contributions and Benefits Act 1992;
a shared additional pension under Part 2 of that Act;
“transaction information”, in relation to an account, means information which—
may enable the identification of the subject matter or the amount of a transaction completed through the account, or
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;
“the Tribunal” means the First-tier Tribunal.
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) (but this is subject to paragraph 5).
Part 2 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—
(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
(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), 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 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 laundering.
Section 95
The Schedule to be inserted in the Social Security Administration Act 1992 after Schedule 3 is—
Schedule 3ZA
Recovery of amounts from bank accounts etc
Section 80C
Part 1 deductions from accounts
Direct deduction orders
1 (1) Where an amount is recoverable from a liable person who holds an account 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—
(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.
(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 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 making a direct deduction order.
Accounts which may be subject to 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
(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 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
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 3 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 notice (an “account information notice”) requiring the bank to give the Secretary of State statements for the account covering—
(a) the 3 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.
(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 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—
(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,
(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—
(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 Secretary of State may give—
(a) more than one account information notice, or general information notice, in relation to the same recoverable amount;
(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 20 if it fails to do so without reasonable excuse.
(8) The bank must comply with a notice given under this paragraph.
(9) Subject to sub-paragraph (10), 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—
(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.
(10) The prohibition in sub-paragraph (9) ceases to apply—
(a) at the end of the period of 3 months beginning with the day on which the account information notice or general information notice is given to the bank, or
(b) if earlier, when the bank is given a notice under paragraph 5(1).
(11) 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
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 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 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—
(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 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—
(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,
(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 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 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 1 month beginning with the day after the day on which the notice is given.
(5) The Secretary of State 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 under paragraph 4(1), and
(ii) in any case, decide whether, and in what terms, to make a direct deduction order in respect of the account.
(6) A notice under sub-paragraph (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 sub-paragraph (and for the effect of giving the notice to the bank see paragraph 11 (restrictions on accounts)).
(7) Where a notice is given to the bank 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.
(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 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 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.
(2) A person is within this sub-paragraph 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.
(3) The total amount of deductions to be made under a regular direct deduction order in relation to any period of 1 month must not exceed 40% of the relevant amount.
(4) For the purposes of sub-paragraph (3), the “relevant amount” is the amount that the Secretary of State reasonably expects to be credited to the account in question in (or in respect of) a typical month during the period for which the order will have effect, having regard to all statements given to the Secretary of State in relation to the account (see paragraphs 3(2) and 15(1)).
(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.
Content and effect of direct deduction orders
7 (1) A regular direct deduction order must specify—
(a) the amounts to be deducted (see paragraph 6),
(b) when those amounts are to be deducted and paid to the Secretary 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 to be deducted at different times.
(3) A lump sum direct deduction order must specify—
(a) 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 paragraph 20).
(4) A direct deduction order may not require an amount to be deducted from a person’s account before the end of the period of 1 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.
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.
(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 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—
(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—
(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—
(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 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 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 Dealings Act 1971 in any part of the United Kingdom.
Restrictions on accounts
11 (1) Where a notice under paragraph 5 (a “pre-deduction notice”) relating to a proposed lump sum direct deduction order, or a lump sum direct deduction order under paragraph 1, is given to a bank in relation to a liable person’s account, the bank must—
(a) 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, or
(b) take the action set out in sub-paragraph (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 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.
(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 the deduction 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 acted in accordance with sub-paragraph (1)(a).
(5) The requirements in sub-paragraph (1) cease to apply when—
(a) in relation to a pre-deduction 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 paragraph 1;
(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 this paragraph, “specified” means specified in a pre-deduction notice or direct deduction order.
Applications to vary
12 (1) Any holder of an account to which a direct deduction order applies may 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.
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 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,
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 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 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)—
(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, and
(ii) 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—
(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.
(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 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—
(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
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—
(i) the 3 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).
(2) Sub-paragraphs (6) to (8) and (11) 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—
(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 Secretary of State complies with paragraph 13(3).
Suspension of direct deduction orders
16 (1) The Secretary of State 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 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.
(3) Where the requirement is suspended for a continuous period of 2 years the regular direct deduction order in question is to be treated as having been revoked at the end of that period.
(4) Where a regular direct deduction order is treated as having been revoked by virtue of sub-paragraph (3), the Secretary of State must give notice to that effect to—
(a) the bank to which the order was given,
(b) the liable person, and
(c) in the case of a joint account, each of the other account holders.
(5) Sub-paragraph (3) does not prevent the Secretary of State making a further regular direct deduction order in respect of the same liable person and account.
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—
(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 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 the period of 1 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 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
(c) revoke the order.
(6) After a review has been carried out, the Secretary of State must notify the applicant and other relevant persons of the outcome of the review.
(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—
(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 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,
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) may not be brought after the end of—
(a) the period of 1 month beginning with the day after the day on which the appellant was—
(i) given a copy of the direct deduction order, or the varied direct deduction order, in a case within sub-paragraph (1)(a) or (b), or
(ii) notified under paragraph 12(3) or, where a review was sought, paragraph 18(6), in a case within sub-paragraph (1)(c), or
(b) such longer period (if any) as the Tribunal considers reasonable in all the circumstances.
(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 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;
(b) revoke the direct deduction order;
(c) dismiss the appeal.
(8) In this paragraph, “relevant person” has the meaning that it has in paragraph 18.
Part 2 Penalties
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,
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”).
(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 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 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 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.
(2) An appeal under sub-paragraph (1) may not be brought after the end of—
(a) the period of 1 month beginning with the date on which the penalty notice in relation to the penalty being appealed was given, or
(b) such longer period (if any) as the Tribunal considers reasonable in all the circumstances.
(3) On an appeal under sub-paragraph (1) the Tribunal may confirm or quash the decision to impose the penalty.
(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
Deputies
23 (1) This paragraph applies where a person (a “deputy”) acts on behalf of an account holder (including a liable person) in relation to their account by virtue of—
(a) a power of attorney, or
(b) an appointment by, or an order of, a court.
(2) The following provisions apply in relation to the deputy of the account holder as they apply in relation to the account holder—
(a) paragraph 1(7);
(b) paragraph 3(9);
(c) paragraph 5;
(d) paragraph 11(1);
(e) paragraph 12;
(f) paragraph 13(3), (6) and (8)(b);
(g) paragraph 14(3);
(h) paragraph 15(3);
(i) paragraph 16(2) or (4);
(j) paragraph 18;
(k) paragraph 19.
(3) Paragraph 13(7)(a) and (b) applies in relation to the deputy of the account holder instead of the account holder.
(4) Sub-paragraph (5) applies where—
(a) a bank is given—
(i) an account information notice or a general information notice under paragraph 3,
(ii) a notice under paragraph 5,
(iii) a further information notice under paragraph 15, or
(iv) a direct deduction order, and
(b) a deputy acts on behalf of an account holder of an account to which the notice or order relates.
(5) The bank must give the Secretary of State the name and correspondence address that it holds for that deputy (unless the bank has already provided that information).
Interpretation
24 (1) In this Schedule—
“bank” means a person who is authorised—
to accept deposits, or
to issue electronic money;
“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);
“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)—
(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
(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 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.
(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 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, and
(c) an account being, in any other way, in the person’s name,
and “holder” is to be read accordingly.
Regulations
25 (1) Regulations may make further provision about direct deduction orders.
(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 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 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 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;
(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 by reference to cryptoassets or any similar product or service).
(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 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—
(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.
(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—
(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.
Section 96
The Schedule to be inserted in the Social Security Administration Act 1992 after Schedule 3ZA (inserted by section 95(3) of this Act) is—
Schedule 3ZB
Disqualification from driving
Section 80D
Suspended DWP disqualification orders
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 State may apply to the court for a suspended DWP disqualification order (but see sub-paragraph (7)).
(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 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.
(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
(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—
(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 give the Secretary of State and the liable person an opportunity to be heard.
(10) In this Schedule—
“the court” means—
in England and Wales, a magistrates’ court, and
in Scotland, a sheriff or a summary sheriff;
“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 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
(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, 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.
(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 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 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 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 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 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 person, and
(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 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.
(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.
(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 the immediate DWP disqualification order.
(8) In this paragraph, references to varying a suspended or immediate DWP disqualification order include 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 court authorised by the court for the purposes of that sub-paragraph.
Holding of driving licence for period of disqualification
5 (1) 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 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.
(2) For the purposes of this paragraph, “driving licence” includes any document by virtue of which a person is authorised under Part 3 of the Road Traffic Act 1988 to drive a motor vehicle in Great Britain.
Appeals
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.
(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 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
(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.
(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—
(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.
(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 satisfied that there is a compelling reason to do so.
(4) Regulations may make provision—
(a) for the purposes of enabling the court to assess the matters mentioned in paragraphs 1(6), 2(5) and 3, or
(b) about procedure relating to applications to, or appeals from, a magistrates’ court in England and Wales under this Schedule.
(5) In this paragraph, the reference to “a court” is to “the court” and “the appropriate appellate court”.
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.
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 read as a reference to disqualifying a person from driving any vehicle under Part 3 of the 1988 Act.