DWP crackdown on companies charging fees for benefit claims, Digi Mart USA News (United Kingdom): The Department for Work and Pensions (DWP) has confirmed that tougher rules for companies charging people to claim benefits will be introduced within weeks. The UK Government is preparing a new Code of Practice aimed at protecting vulnerable claimants from being exploited or pressured into paying fees for assistance.
The forthcoming measures will include a ban on charging fees for benefit claims activity, with ministers indicating that legislation could follow if necessary. The plans were confirmed by Sir Stephen Timms, Minister of State for Social Security and Disability, in response to a written parliamentary question from Liberal Democrat MP Lisa Smart.
The MP for Hazel Grove asked what discussions the DWP had held with the Financial Conduct Authority (FCA) about companies charging people for assistance with benefit claims and appeals.
In the written response, Sir Stephen said the department regularly engages with external stakeholders, including the FCA, on claims management companies and the provision of advice to benefit claimants. He said: “We will be introducing a new Code of Practice in the coming weeks that clamps down on activity by claims management companies undertaking benefit claims activity, and includes a £0 fee cap.
This will be backed by forthcoming legislation, if necessary.” The minister added: “Government is determined to ensure that vulnerable claimants are not exploited or pressured into paying fees to access support with claiming benefits.”
The announcement follows concerns about companies offering to help people complete benefit applications or challenge decisions in exchange for payment, despite free assistance being available. The DWP has not yet published the full Code of Practice or confirmed when the restrictions will take effect.
The announcement also follows the department’s Don’t Pay to Claim campaign, which encourages people to seek free support rather than paying companies for assistance with benefit applications.
People can apply for benefits directly through the DWP without paying a fee, while independent organisations can provide help with understanding eligibility, completing forms and challenging decisions. In a separate parliamentary question, Lisa Smart asked what steps the department was taking to ensure claimants were aware of free advice and support, including services provided by local authorities and Citizens Advice.
Sir Stephen confirmed that the DWP uses GOV.UK guidance and targeted communications campaigns to direct people towards free assistance. He said: “The Department uses a range of communication channels, including GOV.UK guidance, and targeted communications campaigns, such as ‘Don’t Pay to Claim’ to signpost claimants to free support and advice.” He added that the department would continue working with organisations across the advice sector to help claimants access support throughout the application and appeals process.
Anyone who needs assistance with a benefit application can access information through GOV.UK, including details about eligibility, applications and reporting changes in circumstances. People in Scotland can also seek free, independent guidance from Citizens Advice Scotland and local welfare rights services.
Those who disagree with a DWP benefit decision can usually ask for a Mandatory Reconsideration, where the department reviews its original decision. Information about challenging a decision and taking an appeal further is available through the UK Government’s official guidance.
The forthcoming Code of Practice is intended to strengthen protections for people seeking financial support, with the UK Government prepared to introduce legislation if necessary.
