DWP set to hand driving bans to benefit cheats who owe £1,000 or more

The Department of Work and Pensions (DWP) could soon be allowed to hand benefit fraudsters a driving ban if they consistently fail to repay money owed to the taxpayer.

The welfare department is also set to get new powers to directly recover funds from the bank accounts of claimants committing fraud.

The new measures are part of Labour's plans to curb benefit fraud. The government has hailed the welfare reforms as the most significant crackdown on fraud in recent times and estimates that its plans could save taxpayers £1.5 billion over the next five years.

The Public Authorities (Fraud, Error and Recovery) Bill, which will set out the legislation for the new measures, was introduced to Parliament on Wednesday.

Under the new laws, benefit fraudsters could be disqualified from driving for up to two years if they refuse to repay their debts. Following an application from the DWP, courts could suspend the driving licences of people who owe more than £1,000 in welfare debts and who have ignored repeated requests for repayment.

The department will also have the authority to obtain bank statements from individuals believed to have sufficient funds to repay welfare debts but are refusing to do so. However, the DWP has assured that it will not have direct access to people's bank accounts.

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.

"This means greater consequences for fraudsters who cheat and evade the system, including as a last resort in the most serious cases removing their driving licence. Backed up by new and important safeguards including reporting mechanisms and independent oversight to ensure the powers are used