The Department for Work and Pensions (DWP) can now ban individuals from driving if they refuse to repay outstanding benefit debts, under new powers granted by the Public Authorities (Fraud, Error and Recovery) Act 2025. The department is also able to recover money directly from bank accounts without a court order, targeting persistent offenders who have the means to pay but choose not to.
New Powers to Claw Back Cash
The DWP is writing to thousands of people with outstanding debts, warning them to get in touch and arrange repayment or face consequences. Letters will be sent monthly starting from June 2026, with enforcement powers gradually rolled out from October. Previously, the DWP had limited options to pursue individuals no longer claiming benefits or in PAYE employment, allowing some to avoid repayment.
Under the new law, courts can impose a driving ban where the debt is at least £1,000. However, no one can be disqualified if they have an essential need for their licence, such as work that relies on driving (e.g., couriers) or caring responsibilities. Any ban is initially suspended as long as repayment terms are kept.
Part of a £14.6 Billion Savings Target
These changes are part of the UK Government’s commitment to save £14.6 billion over the next five years from fraud, error, and debt activity. Andrew Western, Work and Pensions minister for transformation, 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."
Impact on Debtors
The DWP emphasizes that it will work with individuals to find affordable repayment plans, but those who refuse to engage face escalating measures, including bank account deductions and potential driving bans. The new powers aim to ensure that those who can afford to repay their debts do so, reducing the burden on taxpayers.
