Benefit debts could lead to driving licence bans under new crackdown
The DWP can now seize cash directly from people’s bank accounts without the need for a court order
People who refuse to pay back benefit debts could be banned from driving as part of a new welfare crackdown launching on Wednesday.
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Sweeping new powers are coming into force as part of the Government's plans to save up to £14.6bn over the next five years from benefit fraud, error and debt.
The Department for Work and Pensions (DWP) is now writing to thousands of people with outstanding debts, warning them of the consequences if they do not settle up.
Under the new measures, the DWP can now seize cash directly from people’s bank accounts without the need for a court order.
In the most serious cases, when welfare debt is more than £1,000 and there is no working need for a car, someone’s driving licence can be revoked via a court order.
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Though the powers come into law on Wednesday, they will start being used from October, with the aim of giving debtors a chance to pay up, or sort out a payment plan ahead of time.
Work and pensions minister 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.”
New powers introduced by the Public Authorities (Fraud, Error and Recovery) Act 2025, dubbed the Pafer Act by the Government, also include data handling requirements for banks, to help the DWP hunt down benefit fraudsters.
The launch comes amid ongoing debate at the heart of Government about how to tackle the ballooning welfare bill.
The Government is believed to have spent £333 billion in 2025/26 on welfare.
More than half of this, £177bn, was on pensions, including £146bn for the state pension.
The remainder was spent on a mixture of working age benefits, children’s welfare, and support for disabled people.
The cost of welfare spending is expected to rise to £400bn by the end of the decade.
Ministers had attempted to grapple with this by making reforms to working age benefits, hoping to return more jobless people into work.
But they faced a backbench Labour rebellion last summer which dampened the plans over fears they would have a negative impact on disabled people.