The Public Authorities (Fraud, Error and Recovery) Act 2025 (Commencement No. 2) Regulations 2026
These Regulations bring into force the second tranche of provisions from the Public Authorities (Fraud, Error and Recovery) Act 2025 starting on 1st April 2026, specifically activating sections establishing new powers for investigating and recovering losses from fraud against public authorities outside of tax and social security, introducing criminal offences and administrative penalties for non-benefit payment fraud, and extending relevant Police and Criminal Evidence Act 1984 powers to authorized investigators.
Arguments For
Enables broader investigation and recovery powers for public sector fraud beyond social security and tax, enhancing public funds protection.
Extends criminal and administrative penalty frameworks to cover dishonest representation, false information, and document production related to non-benefit payments.
Provides investigators with enhanced powers, including those derived from the Police and Criminal Evidence Act 1984 (PACE), to effectively tackle complex fraud cases against public bodies.
Clarifies amendments to social security legislation to integrate non-benefit payment enforcement and removes potentially harsh penalties (loss of benefit) when administrative penalties for fraud are accepted.
Arguments Against
Implementation of wide-ranging investigatory powers, including powers of entry, search, and seizure granted under PACE-derived provisions, raises concerns about civil liberties and potential overreach.
The expansion of fraud offences and enforcement mechanisms into new areas of public service payments may create unforeseen administrative complexities for various public authorities.
Introducing non-benefit payment recovery procedures, such as recovery from bank accounts and deduction from earnings, represents a significant increase in state intervention regarding debt collection.
The removal of 'loss of benefits' as a consequence when an administrative penalty is accepted might be seen by some as reducing the deterrent effect for benefit fraud cases already covered by older legislation.
STATUTORY INSTRUMENTS
2026 No. 371 (C. 32)
SOCIAL SECURITY PUBLIC SECTOR FRAUD, ENGLAND AND WALES
The Public Authorities (Fraud, Error and Recovery) Act 2025 (Commencement No. 2) Regulations 2026
This identifies the document as a Statutory Instrument from 2026, numbered 371 (C. 32), concerning Social Security and Public Sector Fraud within England and Wales.
It formally declares the regulations as the second commencement order for the Public Authorities (Fraud, Error and Recovery) Act 2025.
Made
25th March 2026
The Secretary of State makes these Regulations in exercise of the powers conferred by section 109(1) of the Public Authorities (Fraud, Error and Recovery) Act 2025( 1 ).
The Secretary of State officially made these Regulations on March 25th, 2026.
The authority to create these commencement rules is drawn directly from section 109(1) of the parent Act, the Public Authorities (Fraud, Error and Recovery) Act 2025.
Citation
- These Regulations may be cited as the Public Authorities (Fraud, Error and Recovery) Act 2025 (Commencement No. 2) Regulations 2026.
This section provides the official short title by which these specific regulations must be referenced throughout legal documents and official communication.
Commencement
- The following provisions of the Public Authorities (Fraud, Error and Recovery) Act 2025 come into force, in so far as they are not already in force( 2 ), on 1st April 2026-
- (a) sections 1 to 72 (functions exercisable on behalf of public authorities);
- (b) section 74 (interpretation);
- (c) section 75 (regulations);
- (d) section 93 (enforcement of non-benefit payments);
- (e) section 101 (offences: non-benefit payments);
- (f) section 102 (penalty as alternative to prosecution: extension to non-benefit payments);
- (g) section 103 (amendments to the Social Security Fraud Act 2001( 3 ): loss of benefits following penalty);
- (h) Schedule 1 (fraud against public authorities: Police and Criminal Evidence Act 1984( 4 ) powers).
This is the key operative clause, stating that specified parts of the 2025 Act become law on April 1, 2026, if they were not already in effect.
This includes major sections (1-72) covering investigatory functions, interpretation (74), regulation-making powers (75), enforcement rules for non-benefit payments (93), new offence definitions (101), extensions to alternative penalties (102), amendments regarding the Social Security Fraud Act 2001 (103), and crucial Schedule 1 which grants police powers for fraud investigations.
Signed by authority of the Secretary of State for Work and Pensions
25th March 2026
Andrew Western Parliamentary Under Secretary of State Department for Work and Pensions
This confirms the document was formally signed and authorized by Andrew Western, the Parliamentary Under Secretary of State for the Department for Work and Pensions, on the date the regulations were made.
EXPLANATORY NOTE
(This note is not part of the Regulations)
These are the second set of commencement regulations made under the Public Authorities (Fraud, Error and Recovery) Act 2025 (c. 28) ('the Act').
Regulation 2 brings certain provisions of the Act into force, in so far as they are not already in force, on 1st April 2026.
The Explanatory Note confirms these are the second commencement regulations for the 2025 Act.
Regulation 2 enacts specific provisions of that Act on April 1, 2026, provided they had not commenced earlier.
Sections 1 to 72 of the Act introduce new powers to enable the Minister for the Cabinet Office to investigate public sector fraud outside of tax and social security on behalf of public authorities. The provisions include investigatory powers (including an information gathering power and powers of entry, search and seizure); rights to recover (including recovery of recoverable amounts or other amounts); methods of recovery (including recovery as if payable under a court order, recovery from bank accounts etc and deduction from earnings); civil penalties; general (including oversight and independent review).
Sections 1 through 72 grant the Minister for the Cabinet Office the authority to investigate fraud affecting public bodies, excluding existing social security and tax fraud areas.
These new powers cover information gathering, physical entry and seizure, establishing rights and methods for money recovery (including from bank accounts and earnings), and imposing civil penalties, all while incorporating oversight mechanisms.
Section 74 of the Act sets out definitions for key terms within Part 1 of the Act, such as 'authorised officer' and 'core functions'.
Section 74 defines critical terminology used throughout the first part of the Act, such as identifying what legally constitutes an 'authorised officer' or what are considered the 'core functions' to which the legislation applies.
Section 75 of the Act makes provision in relation to the making of regulations under Part 1 of the Act.
Section 75 details the procedural rules and requirements that must be followed when creating subsequent regulations necessary to operate Part 1 of the Act.
Section 93 of the Act sets out provisions concerning enforcement of non-benefit payments that are inserted in the Social Security Administration Act 1992 (c. 5) ('the SSAA'). Section 93 of the Act inserts three new sections after section 71ZH of the SSAA that are section 71ZI, relating to overview and recovery; section 71ZJ, relating to the overpayment decision and notice; section 71ZK, relating to reviews and appeals.
Section 93 amends the Social Security Administration Act 1992 (SSAA) to establish rules for recovering debts that are not social security benefits (non-benefit payments).
It inserts new sections (71ZI, 71ZJ, 71ZK) into the SSAA, defining recovery processes, the procedure for notifying an overpayment decision, and the mechanisms for review and appeal related to these debts.
Section 101 amends the SSAA so that non-benefit payment fraud can be prosecuted. Section 101(2) of the Act amends section 111A of the SSAA and expands the offence of dishonest representation to include a non-benefit payment. Section 101(3) of the Act amends section 112 of the SSAA and sets out that it is an offence to make false representation (or to produce false information or documents) to obtain a non-benefit payment. Section 101(4) of the Act amends section 121DA(5) of the SSAA and inserts what constitutes a 'non-benefit payment'.
Section 101 allows for the prosecution of fraud targeting non-benefit payments by amending the SSAA. It broadens the definition of 'dishonest representation' and establishes that making false claims or supplying false documents to obtain a non-benefit payment becomes a specific offence.
It also legally defines which payments count as 'non-benefit payments' within the SSAA context.
Section 102 of the Act amends sections 115A and 115B of the SSAA. Section 115A concerns penalty as an alternative to prosecution, and section 115B concerns penalty as an alternative to prosecution for colluding employers. Section 102(2) to (6) of the Act expands the definition of the types of overpayments to which section 115A applies to include a non-benefit payment. Section 102(7) of the Act amends section 115B of the SSAA to include an offence for an overpayment of a non-benefit payment to ensure that provision applies where the sums are recoverable under new section 71ZI.
Section 102 updates the SSAA sections dealing with penalties that can be accepted instead of criminal prosecution, applying these alternatives to non-benefit payment overpayments as well.
This ensures that employers involved in collusion regarding these overpayments face appropriate penalty alternatives, aligning with the new recovery tools introduced under section 71ZI.
Section 103 of the Act amends the Social Security Fraud Act 2001 (c. 11) to remove the loss of benefit provisions where an administrative penalty has been accepted as an alternative to prosecution.
Section 103 modifies the Social Security Fraud Act 2001.
It removes the consequence of losing social security benefits if an individual has agreed to pay an administrative penalty instead of facing prosecution for fraud.
Schedule 1 to the Act extends certain provisions of the Police and Criminal Evidence Act 1984 (c. 60) ('PACE') to criminal investigations of fraud offences against public authorities carried out by investigators, authorised by the Minister. These officers may use the PACE powers in the same way as police officers, with some modifications.
Schedule 1 grants investigators authorized by the relevant Minister the ability to use specific powers from the Police and Criminal Evidence Act 1984 (PACE).
This allows these fraud investigators to conduct criminal fraud investigations with powers similar to those held by police officers, subject to several minor adjustments.
NOTE AS TO EARLIER COMMENCEMENT REGULATIONS
(This note is not part of the Regulations)
The following provisions of the Public Authorities (Fraud, Error and Recovery) Act 2025 have been brought into force by commencement regulations made before the date of these Regulations.
| Provision | Date of Commencement | S.I. No. | |------------------------|------------------------|------------| | Section 98 | 4th December 2025 | 2025/1265 | | Section 78 (remainder) | 2nd February 2026 | 2025/1265 | | Section 79 (remainder) | 2nd February 2026 | 2025/1265 | | Schedule 3 (remainder) | 2nd February 2026 | 2025/1265 |
This note details commencement dates for earlier parts of the Act enacted through previous Statutory Instruments.
It shows that Section 98 and parts of Sections 78, 79, and Schedule 3 came into force earlier in December 2025 or February 2026.
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