Explanatory note

These Regulations make provision in relation to the recovery of debt under Schedules 3ZA and 3ZB to the Social Security Administration Act 1992 (c. 5) (“the Act”), as inserted by the Public Authorities (Fraud, Error and Recovery) Act 2025 (c. 28) (“2025 Act”).

Part 1 (regulations 1 and 2) contains interpretation provisions and provisions relating to commencement.

Part 2, Chapter 1 (regulations 3 to 9) sets out how notices and orders are to be given by the Secretary of State to the account holder and financial institutions, including the method(s) which must be used, when notices and orders are considered in law to have been given for these purposes, and certain information which must be included. Regulation 8 requires the Secretary of State to consult with a bank (or representatives of the financial sector) before giving notices or orders (or requiring a bank to provide information or notices, for the purposes of Part 2, Chapter 3) using another form of electronic communication which the Secretary of State considers may be onerous to the bank.

Part 2, Chapter 2 (regulations 10 to 12) sets out how account holders make representations and apply for a review or a variation of an existing order, including the methods which can be used.

Part 2, Chapter 3 (regulations 13 to 21) makes provision relating to the duties of banks, such as time to comply, additional information which must be provided (such as other legal restrictions on an account) and how information must be shared with the Secretary of State.

Part 2, Chapter 4 (regulations 22 to 24) makes provision for the interaction between direct deduction orders and other similar orders, including making provisions that deduction orders given by the Secretary of State under the Child Support Act 1991 (c. 48) must be given priority over a direct deduction order.

Part 2, Chapter 5 (regulation 25) makes provision for a bank’s administrative costs when making a successful deduction under a direct deduction order.

Part 2, Chapter 6 (regulations 26 to 29) sets out considerations the Secretary of State must make when calculating the direct deduction amount. Regulation 26 sets out how and when the Secretary of State must consider whether a person would be caused hardship in meeting essential living expenses. Regulation 27 sets maximum rates of regular deductions under a regular direct deduction order, in cases not involving fraud. Regulation 28 sets out certain payments which, when identified, must be disregarded for a period of time from the amount available to be deducted from. Regulation 29 sets out certain payments which the liable person might be required to make, which the Secretary of State must consider in determining the amount of a deduction.

Part 3 (regulation 30) sets out the procedure for applications to be made to a magistrates’ court in England and Wales in respect of a suspended or immediate DWP disqualification order. The regulation provides that applications should be made as a complaint, and disapplies certain provisions in the Magistrates’ Courts Act 1980 (c. 43) in respect of such applications.

Part 4 (regulations 31 and 32) amends the Social Security (Overpayments and Recovery) Regulations 2013 (S.I. 2013/384) and the Social Security (Payments on account, Overpayments and Recovery) Regulations 1988 (S.I. 1988/664). Regulation 31 makes a consequential amendment, replacing a previous reference to section 71ZE(3) of the Act (which dealt with recovery of court costs) with section 80G of the Act (which was introduced by the 2025 Act and allows recovery of a wider range of costs, including those incurred by court action or under Schedules 3ZA and 3ZB to the Act). Regulations 31 and 32 also change the wording in provisions regarding the rate of recovery in deductions from benefits and direct earnings attachments from “found guilty” to “convicted”, to ensure consistency with other provisions in these Regulations and in the 2025 Act.

A full impact assessment has not been produced for this instrument as no, or no significant, impact on the private, voluntary or public sector is foreseen.