DWP gains power to suspend licences for unpaid benefit debts

The Department for Work and Pensions has begun warning thousands of former benefit claimants that they could lose their driving licences if they repeatedly refuse to repay government debts. The new enforcement powers, which officially came into force on Thursday, June 25, 2026, also allow the department to recover money directly from bank accounts without a court order in some cases.

The measures are part of the Public Authorities Fraud, Error and Recovery Act 2025. Ministers said the powers target individuals who have the financial means to repay but deliberately choose not to, closing a previous loophole where the DWP had few options to pursue people who had stopped claiming benefits or were no longer in PAYE employment.

According to officials, driving disqualification can only be considered for former claimants who owe at least £1,000, are no longer receiving DWP benefits, and have repeatedly ignored repayment requests. The DWP must first demonstrate that other recovery options have failed before applying to a court. Any court-issued driving ban would initially be suspended, allowing the individual to keep their licence if they adhere to a repayment schedule. A ban would only...