The Department for Work and Pensions (DWP) will revoke the driving licences of certain benefit claimants for up to two years starting October 2026, under new powers granted by the Public Authorities (Fraud, Error and Recovery) Act 2025.
Key Measures
The legislation allows DWP to seek court orders to disqualify individuals who have fraudulently claimed benefits and owe at least £1,000, provided the debt cannot be recovered by other means. The three benefits with the highest fraud rates are Universal Credit, Pension Credit, and ESA.
Courts can only impose a driving ban if the individual had the means to repay but did not, without reasonable excuse. The court cannot make the order if the person has an essential need to drive, such as for work or caring responsibilities.
Repayment Options
To avoid disqualification, individuals can settle the debt in full or agree to an affordable repayment plan directly with DWP. If an immediate disqualification order ends or is revoked within 56 days due to full repayment, the licence may be returned without a fee. Otherwise, the individual must apply to DVLA for a new licence and pay a fee.
The disqualification period cannot exceed two years, but repeated breaches of a suspended order could lead to longer total disqualification.
Impact and Savings
The government claims this initiative could save up to £1.5 billion over five years. 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."
Minister Satvir Kaur added: "Fraud against the public sector and unrecovered debt deny our vital frontline services of the funding they deserve."
Additional Powers
Other measures under the PAFER Act include direct access to bank accounts to recover debts without court approval, and the Eligibility Verification Measure, which allows DWP to request data from banks to identify incorrect benefit payments. These form part of the government's pledge to save £14.6 billion over five years from fraud, error, and debt activity.
