People who deliberately dodge repaying benefit debts could now have their driving licences suspended or revoked under new enforcement powers granted to the Department for Work and Pensions.

Alongside licence bans in the most serious cases, the DWP will gain the legal power to recover money directly from fraudsters' bank accounts. These measures take effect today under the Public Authorities (Fraud, Error and Recovery) Act, which closes an existing loophole and allows officials to pursue debtors who are no longer employed or claiming benefits.

The new legislation also gives the department the right to access limited data held by banks and financial institutions to identify incorrect benefit payments. According to Government figures, around 1.1 million Britons currently owe money to the DWP.

Driving licence penalties will not apply to every case of overpayment. The department has confirmed that the debt owed must be at least £1,000, and licence suspensions or revocations are reserved for regular dodgers.

There are also clear exemptions in place for people who rely on their vehicles to make a living. The DWP stated that anyone with an "essential need" for their licence — including couriers and carers — will not face a driving ban.

Labour has described the policy as the "biggest crackdown on welfare debt in a generation", arguing that the state needs stronger tools to recoup public money from those who refuse to settle what they owe.

Employment Minister Andrew Western said: "Hardworking taxpayers deserve a system that pursues those who deliberately dodge their debts, and that is exactly what these new powers deliver. To anyone with an outstanding debt, our door is open and DWP will always work with you to find an affordable way to repay. But for those who can pay and won't – we're going further than ever before to claw back cash and crack down on fraud."

Former Cabinet Office Minister Satvir Kaur also defended the legislation, stating: "Fraud against the public sector and unrecovered debt deny our vital frontline services of the funding they deserve. Under these new powers in the PAFER Act, this Government will deliver on its promise to protect hardworking taxpayers and clamp down on those who try to cheat the system."

To support its case, the Government cited several high-profile fraud investigations. These included 33-year-old Catherine Wieland from Goring-by-Sea, who claimed over £23,000 in benefits while photographed ziplining in Mexico, and Helen Green, 49, who fraudulently obtained £25,000 in Personal Independence Payment (PIP) by claiming severe rheumatoid arthritis while training for 10k runs and attending the gym. Officials also pointed to Operation Mellow, launched earlier this year to recover £3 million from four men alleged to have hijacked hundreds of identities to claim Universal Credit and PIP.

What we do not know yet is how quickly the DWP will begin issuing driving bans or how strictly the criteria for "essential need" will be interpreted during appeals. I'll be following this one — check back for updates.