The Department for Work and Pensions (DWP) has introduced a new rule effective from June 24 that could see certain benefit claimants banned from driving if they refuse to repay outstanding debts. The measure is part of a broader welfare crackdown under the Public Authorities (Fraud, Error and Recovery) Act 2025, known as the Pafer Act, which aims to save up to £14.6 billion over the next five years from benefit fraud, error, and debt.
How the Driving Ban Will Work
Under the new powers, the DWP can now seize cash directly from bank accounts without a court order. In more serious cases, where welfare debt exceeds £1,000 and there is no working need for a vehicle, a court order can revoke the individual's driving licence. The DWP is writing to thousands of people with outstanding debts, warning them of the consequences if they do not settle up.
While the powers come into law on Wednesday, enforcement will begin in October, giving debtors time to pay or arrange a payment plan. Work and pensions minister Andrew Western stated: "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."
Broader Welfare Crackdown
The Pafer Act also introduces data handling requirements for banks to help the DWP identify benefit fraudsters. This comes as the government faces ongoing debate over the rising welfare bill, which reached £333 billion in 2025/26. Of that, £177 billion was spent on pensions, including £146 billion for the state pension, with the remainder covering working-age benefits, children's welfare, and disability support. Welfare spending is projected to rise to £400 billion by the end of the decade.
Ministers had attempted to curb costs through reforms to working-age benefits aimed at returning more jobless people to work. However, these plans faced a backbench Labour rebellion last summer over concerns about negative impacts on disabled people.
