People who refuse to pay their debts could lose their driving licence under new powers being introduced by the Department for Work and Pensions (DWP).
The department is writing to thousands of people with outstanding welfare debts, warning them to contact officials and agree a repayment plan before the measures come into force next year.
Under the Public Authorities (Fraud, Error and Recovery) Act 2025, courts will be able to suspend the licenses of people who persistently fail to repay debts of £1,000 or more.
As well as driving disqualifications, the legislation will allow the DWP to recover money directly from bank accounts without a court order.
The government said the measures are aimed at people who are no longer claiming benefits and have avoided repaying debts despite being able to do so.
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.’
The DWP said a driving ban would only be considered as a last resort and would require court approval.
People would not be disqualified if they have an essential need for their license, such as for work or caring responsibilities. Any ban would also be suspended if repayment terms were met.
Cabinet Office Minister Satvir Kaur 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.’
The powers are due to be rolled out from October 2026.
Image: Cory Bouthillette/UnSplash
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