People who owe the Department for Work and Pensions (DWP) £1,000 or more could face a driving ban if they refuse to repay money they can afford to pay.
New debt recovery powers have now come into force under the Public Authorities (Fraud, Error and Recovery) Act 2025. The law gives the DWP stronger powers to recover money from people who have outstanding benefit debts.
The measure is part of a wider Government crackdown on benefit fraud, error and unpaid debt. Ministers say the changes are designed to protect taxpayers’ money and recover cash from people who deliberately avoid paying back what they owe.
The DWP is now writing to thousands of people with outstanding debts, urging them to get in touch and agree an affordable repayment plan. Enforcement is expected to begin from October, giving people time to settle their debt or arrange payments.
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Under the new powers, DWP can recover money directly from a person’s bank account without first needing a court order. In the most serious cases, the department can also ask a court to disqualify someone from driving.
But a driving ban will not happen automatically. The debt must be at least £1,000, and DWP must apply to a court before a licence can be suspended or removed.
A court would have to consider whether the person had the means to repay the money but failed to do so without a good reason. It must also look at whether the person has an essential need for their driving licence.
This means someone should not be banned from driving if they need their licence for work, caring duties, or other essential reasons. For example, a delivery driver, taxi driver, or someone who relies on a car to care for a vulnerable person may be able to argue that losing their licence would cause serious hardship.
The first step is likely to be a suspended driving disqualification order. This means the person would be allowed to keep driving as long as they followed the repayment terms set by the court. If they later failed to keep to those terms, the court could impose an immediate ban.
Work and pensions minister Andrew Western said taxpayers deserved a system that pursued people who deliberately dodged their debts. He said DWP would work with anyone who came forward to agree an affordable way to repay.
He added that the tougher action was aimed at people who “can pay and won’t”.
A person can owe money to DWP for several reasons. The most common is a benefit overpayment, where someone has received more money than they were entitled to. This can happen after a change in wages, savings, household circumstances, or benefit entitlement.
Some debts may come from mistakes, while others may involve suspected fraud. Universal Credit advances also have to be repaid.
The key point is that people will not lose their driving licence simply because they owe DWP money. The new power is aimed at serious cases where someone owes at least £1,000, refuses to engage with DWP, and is judged able to repay.
Anyone who receives a debt letter from DWP is being urged to respond quickly, rather than ignore it. Agreeing a repayment plan could help avoid stronger enforcement action later this year.
