The DWP has been handed new powers from today to issue driving bans.
The DWP can now issue driving bans (Image: Getty)
The Department for Work and Pensions has unveiled new powers which will allow it to issue driving bans to people on benefits as part of a law change in place from today (Wednesday, June 24).
The DWP says fraudsters and those who refuse to repay benefits debts will face ‘tough new consequences’ which include money being taken back directly from bank accounts ‘without needing a court order’.
Under the Public Authorities (Fraud, Error and Recovery) Act 2025, which the government called ‘the biggest crackdown on welfare debt in a generation’, the DWP can now go directly to a person’s bank to claw back cash owed, without needing a court order. And in the most serious cases, it can ask a court to strip persistent dodgers of their driving licence.
Work and Pensions Minister for Transformation Andrew Western said: “Hardworking taxpayers deserve a system that pursues those who deliberately dodge their debts, and that is exactly what these new powers deliver.
“To anyone with an outstanding debt – our door is open and DWP will always work with you to find an affordable way to repay.
“But for those who can pay and won’t – we’re going further than ever before to claw back cash and crack down on fraud.”
Cabinet Office Minister Satvir Kaur said: “Fraud against the public sector and unrecovered debt deny our vital frontline services of the funding they deserve. Under these new powers in the PAFER Act, this Government will deliver on its promise to protect hardworking taxpayers and clamp down on those who try to cheat the system.”
The DWP says that enforcement of the powers will be gradually rolled out from October 2026, giving debtors a final window from today, to pay back the cash or sort out an affordable repayment plan before that deadline.
Anyone no longer in receipt of benefit, who owes money to DWP and receives the new letter should act now. The application of these powers can be avoided entirely by getting in touch with DWP within the next four months. Where it would help, staff can also point individuals towards free debt advice and support services.
Previously, the DWP had few options to pursue people who were no longer claiming benefits or in PAYE employment, meaning some who could afford to repay were simply choosing not to. That loophole is now closed, the DWP stressed.
It added in today’s announcement: “Courts can only impose a driving ban where the debt is at least £1,000, and no one can be disqualified if they have an essential need for their licence, for example work that relies on driving, such as a courier or caring responsibilities. Any ban is initially suspended as long as repayment terms are kept to.
“Other powers under the PAFER Act, which will be operational in future, include the Eligibility Verification Measure, which will allow DWP to require limited data held by banks and financial institutions to help identify incorrect benefit payments, ensuring claimants are paid accurately and allowing errors to be found and resolved sooner.”