Watchdog raises concern over DWP plan to deduct benefit overpayments

The government says the use of ‘direct deduction orders’ could save the taxpayer £500m a year. Photograph: Kirsty O’Connor/PA

A government watchdog has criticised ministers for understating the impact on the poorest of plans to directly deduct benefit overpayments from people’s bank accounts.

The Department for Work and Pensions (DWP) is legislating to require banks to withdraw cash from the accounts of claimants who have been overpaid due to fraud or error.