DWP Announces Major Changes to Motability Scheme for Benefit Claimants from July
The Department for Work and Pensions (DWP) and Motability Operations have confirmed substantial modifications to the Motability Scheme, set to take effect from July 1, 2026. These adjustments, announced following tax changes in last year's Autumn Budget by the Labour Party government, aim to maintain the scheme's affordability while impacting drivers across the United Kingdom.
Key Changes to the Motability Scheme
Andrew Miller, CEO of Motability Operations, personally addressed the upcoming changes, acknowledging that some adjustments may be challenging for users who rely on the scheme for daily independence. From July 2026, four primary changes will apply to new orders:
- Reduced Annual Mileage Allowance: New orders will include a mileage allowance of 10,000 miles per year, totaling 30,000 miles over a three-year lease and 50,000 miles over a five-year Wheelchair Accessible Vehicle (WAV) lease.
- Increased Excess Mileage Fee: The excess mileage fee will rise to 25p per mile, including standard rate VAT.
- Modified Tyre Replacement Limits: For three-year leases, users can replace up to six tyres, with up to four included for damage. Five-year WAV leases allow up to ten tyre replacements, with six covered for damage.
- New Charge for European Travel: A fee will be introduced for taking vehicles abroad, requiring an admin fee and notification to the RAC when traveling to the EU.
What Remains Unchanged
Miller emphasized that certain core benefits will continue unchanged. All leases will still include comprehensive insurance, regular servicing, maintenance, and breakdown cover. This all-inclusive package, crucial for user independence, remains protected under the revised scheme.
Scottish Exemption and Ongoing Discussions
Notably, these changes do not apply to customers receiving allowances from Social Security Scotland, as Scotland operates under its own Accessible Vehicle and Equipment Scheme (AVES). Motability Operations is collaborating closely with the Scottish Government to determine how any adjustments might affect Scottish users, with details still being finalized.
The organization stated that these modifications are necessary to keep the Motability Scheme sustainable and affordable for the long term, despite recognizing the potential frustration and worry they may cause among beneficiaries.
