The Department for Work and Pensions (DWP) will begin revoking driving licences from October for people suspected of benefits fraud, but only after a four-strike contact process and a review of bank statements. The new powers, introduced under the PAFER Act, target debtors who owe £1,000 or more and are not already making repayments.
Four-step process before licence revocation
According to the DWP, the strict punishment will apply to road users with outstanding debts of £1,000 or more. Before any action is taken, the DWP will first confirm that the debtor is not currently making payments, is not in receipt of a DWP benefit, and that recovery through PAYE income is not reasonably possible.
The department then says it will make a minimum of four attempts to contact the individual, using both notification and telephone calls, to agree a payment plan and check for vulnerability. If there is no response to these contact attempts, the DWP will contact the bank and request three months of bank statements.
Affordability assessment and direct deduction orders
Based on the bank statements, the DWP will complete an affordability and vulnerability assessment. This will determine whether to propose a direct deduction order (DDO), including the amount of deductions and the type of DDO. If it becomes clear that the individual cannot afford a deduction from their bank account, the process will stop at this stage.
These new debt recovery powers are part of the government's commitment to achieve savings of £14.6 billion over the next five years from fraud, error and debt activity. The plan includes investment to deploy up to 3,000 additional staff and strengthen data, analytics and investigative capability.
Wider crackdown on benefits fraud
The DWP says the new powers are part of wider plans to crack down on fraudsters who exploit the benefits system and steal from those who most need help. Debtors will begin receiving updated letters ahead of the new powers coming into force in October, warning them to get in touch and pay up.
