Benefit fraudsters who cheated taxpayers out of £7billion last year could face driving bans under sweeping new powers announced by the Department for Work and Pensions (DWP).

The legislation, introduced in Parliament today, represents the biggest fraud clampdown in a generation. Repeat offenders who refuse to repay their debts could be disqualified from driving for up to two years.


The new measures will give DWP investigators the power to apply for search warrants, allowing them to work alongside police to search premises and seize evidence like computers and smartphones.

The crackdown comes as part of wider plans from the Labour Government to save £8.6billion over five years through tackling welfare fraud and error. Officials say the current system is costing taxpayers around £10billion annually, with £35billion incorrectly paid out since the pandemic.

The new legislation will target fraudsters who owe £1,000 or more and have repeatedly ignored requests to repay their debts. DWP officials will need to apply to courts to justify suspending driving privileges in these cases.

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The Government has unveiled new rules to clampdown on benefit fraudsters

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The Bill is expected to save the Department £1.5billion over the next five years. The measures will be based on principles of fairness and proportionality, with driving bans used only as a last resort.

Officials will prioritise negotiating affordable and sustainable repayment plans with offenders before pursuing more severe penalties. The legislation forms part of the government’s Plan for Change, which aims to reform the health and disability welfare system.

New proposals for reforming health and disability benefits are expected in the Spring. Work and Pensions Secretary Liz Kendall said: “We are turning off the tap to criminals who cheat the system and steal law-abiding taxpayers money.”

She emphasised the serious consequences for fraudsters, including the potential loss of driving privileges in extreme cases. “Backed up by new and important safeguards including reporting mechanisms and independent oversight to ensure the powers are used proportionately and safely,” Kendall added.

Liz Kendall

DWP Minister Liz Kendall is promising to tackle benefit fraud

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“People need to have confidence the Government is opening all available doors to tackle fraud and eliminate waste, as we continue the most ambitious programme for government in a generation – with a laser-like focus on outcomes which will make the biggest difference to their lives as part of our Plan for Change.”

Under the new powers, DWP will be able to recover money directly from bank accounts of those who owe money and refuse to pay, despite having the means to do so.

However, the Department will not have direct access to people’s bank accounts. The legislation will allow DWP to request bank statements to prove debtors have sufficient funds to repay what they owe.

These measures are part of a modernised approach to catching fraudsters and preventing overpayments. The new system aims to keep pace with sophisticated fraud while ensuring legitimate claimants receive the correct benefits.

Officials say this will help prevent vulnerable customers from falling further into debt. The powers will apply to individuals who are not on benefits or in PAYE employment but still owe money to the Department. The legislation includes comprehensive safeguarding measures to protect vulnerable customers.

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Cars driving and a vehicle ban sign

Benefit fraudsters could be banned from driving under Government plans

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Staff will receive high-level training on the appropriate use of new powers. New oversight and reporting mechanisms will be introduced to monitor how these powers are used.

Furthermore, Government will develop Codes of Practice, which will be subject to consultation during the Bill’s passage. All powers will have clearly defined scope and limitations, including the right to appeal decisions.

The Cabinet Office’s Public Sector Fraud Authority will receive additional powers under the new legislation. Georgia Gould, Minister in the Cabinet Office, said: “During the pandemic, when people and businesses needed government support the most, some people stole public money for their own personal gain.”

The time limit for civil claims against Covid fraud will be doubled from six to twelve years. This extension will give investigators more time to examine complex cases and apply new powers retrospectively. These powers include the ability to raid properties and retrieve money from Covid fraudsters’ bank accounts.