From today, October 1, action will be taken against benefits claimants to remove their driving licences. The DWP is rolling out new powers from October 2026 under the Public Authorities (Fraud, Error and Recovery) Act 2025, allowing courts to disqualify benefit fraud debtors from driving for up to two years if they owe more than £1,000 and have failed to repay.
New powers under the Public Authorities Act
The Department for Work and Pensions says it will revoke the driving licences of certain individuals who have been fraudulently claiming benefits, for up to two years. Under the Public Authorities (Fraud, Error and Recovery) Act 2025, a sweeping offensive against welfare debt, the government has seized extensive new powers.
As part of the legislative change — which comes into force today, October 1 — officials will additionally be permitted to withdraw funds directly from individuals' bank accounts.
Regarding driving licences, the official act states: “This measure can only be considered by DWP where the outstanding debt balance is a minimum of £1,000 and where it is not reasonably possible to recover the debt by any other means.”
Enforcement rolled out from October
In June the DWP said it was giving people in debt over benefits until October 1 to pay it back - and from now on enforcement will be 'rolled out'. The measures are targeted at those who have been dishonestly claiming benefits — the three benefits carrying the highest levels of fraud are Universal Credit, Pension Credit and ESA.
Work and Pensions Minister for Transformation Andrew Western said at the time: “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.”
Court rules and repayment options
Those whose benefits have been withdrawn and from whom the DWP is attempting to recoup fraudulently obtained funds are firmly in the crosshairs of the new legislation. The code of practice outlines: “In accordance with the Act DWP cannot use the disqualification from driving power for individuals who, at the time of application, are entitled to and in receipt of a DWP benefit. When considering an application under this power, the court must first determine whether the individual had the means to repay their debt to DWP but did not, without reasonable excuse. The court cannot make the order if it considers the individual has an essential need to drive, including where it is essential to earn a living. The individual will need to make any essential need clear to the court.”
To prevent being disqualified, the person can settle the outstanding amount completely or arrange and maintain an affordable repayment plan directly with DWP, avoiding further proceedings being initiated.
It continues: “If an immediate disqualification order ends or is revoked within 56 days of being made because the individual has repaid the debt in full, they may be entitled to have their licence returned or replaced by DVLA without incurring a fee.”
Following the conclusion of an immediate disqualification order, should the ban have exceeded 56 days, the individual must submit an application to DVLA to renew their driving licence and will face a charge for doing so.
Impact and savings
The ban duration under an immediate disqualification order cannot exceed 2 years. The DWP cautioned: “In some circumstances, where the individual persistently breaches the suspended order by failing to pay without reasonable excuse, more than one immediate disqualification order may be given. This could bring the total time of disqualification to greater than 2 years in total. DWP must apply to revoke an immediate disqualification order whenever the debt has been paid in full. DWP will notify the court that the debt has been repaid, and the court will notify DVLA that the order has ended. DWP will confirm to the individual that the debt has been repaid.”
Those owing money to the DWP are now being sent letters - instructing them to settle their debts. Under the Public Authorities Act 2025, the most significant clampdown on welfare debt in decades, the DWP can now access a person's bank directly to recover money owed, without requiring a court order.
And in the most severe instances, it can request a court to remove the driving licences of persistent offenders. Under fresh proposals brought forward by the Department for Work and Pensions (DWP), officials will have the power to apply to the courts for benefit cheats to lose their driving licences if they owe the taxpayer more than £1,000, or if they have disregarded previous repayment demands.
All of this, Labour claims, could save the DWP as much as £1.5 billion over the coming five years.
