People who owe money to the Department for Work and Pensions are being warned to pay up or risk losing their driving licence.
Under new powers granted by the Public Authorities (Fraud, Error and Recovery) Act 2025, the DWP can now recover outstanding debts directly from individuals’ bank accounts without the need for a court order and, in serious cases, apply to the courts to impose driving bans.
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.
7 Common Speed Camera Myths
"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."
The DWP is currently writing to thousands of people with outstanding welfare debts, warning them to get in touch and arrange repayment, or face enforcement action when the new powers take effect.
The enforcement measures will be rolled out from October 2026, giving debtors a final opportunity to address their debts or agree on a repayment plan before then.
Satvir Kaur, Cabinet Office Minister, said: "Fraud against the public sector and unrecovered debt deny our vital frontline services of the funding they deserve.
"Under these new powers in the PAFER Act, this Government will deliver on its promise to protect hardworking taxpayers and clamp down on those who try to cheat the system."
Individuals who are no longer receiving benefits and receive a letter from the DWP are being urged to contact the department within the next four months to avoid falling under the scope of the new enforcement powers.
DWP staff can direct individuals to free debt advice and support services if required.
Previously, the department had limited means to recover debts from individuals no longer in the benefits system or PAYE employment.
The new powers close that loophole.
Driving disqualifications will only be considered for debts of £1,000 or more, and will not apply where an individual has an essential need for a licence—such as work requirements or caring responsibilities.
Any ban will be initially suspended as long as agreed repayments are maintained.
The PAFER Act also introduces the Eligibility Verification Measure, which will enable the DWP to access limited data from banks and financial institutions to identify incorrect benefit payments more efficiently.
This policy forms part of the Government’s wider goal to recover £14.6 billion over the next five years through action on fraud, error and debt.
This includes hiring up to 3,000 additional staff and strengthening data and investigative capabilities.
Share