Confusion over Aussie driver's licence change – here's what you need to know

The changes come as road authorities in NSW crack down on dangerous driving and loopholes.

New licence laws have come into effect in Australia's most populous state that aim to close a major legislation "loop-hole" that meant international drivers could accrue endless demerit points while remaining on the road. It's prompted confusion among both interstate and international travellers over what they'll logistically need to do to continue driving, with people left wondering what tests are involved and how they can apply.

In NSW, new rules introduced on March 1 mean foreign nationals still driving on their licence from their home country will have just months to make the switch, depending on their visa status, as authorities crack down on road safety. Here's what you need to know.

What are the changes?

There are two main changes affecting drivers with overseas licences.

The first applies to those who arrived before July 1, 2023, including people that may have been in the country for a number of years, living as a permanent resident or in a de facto relationships. This group have until March, 1, 2025 to get an NSW driver licence. People who arrived in the state after July, 1 2023, have six months to switch over to a NSW licence.

A digital NSW licence.
NSW will force foreign drivers to switch to Australian licenses to close a legal loophole. Source: AAP.

"Overseas licence holders, who reside in NSW for longer than a short visit, are required to convert to a NSW driver licence," a Transport for NSW (TfNSW) spokesperson told Yahoo News Australia. "Temporary visa holders must convert to a NSW licence if they have resided continuously in NSW for six months or more and wish to continue driving."

Those moving to NSW and that are Australian or permanent residents, or those who hold a New Zealand licence, can drive in NSW on an interstate or overseas licence for three months. Within this three-month period however they'll need to visit a Service NSW centre and transfer their licence to a NSW licence.

Cars on a highway as NSW introduces new law changes for overseas and interstate travellers.
Travellers hoping to drive on NSW roads will have to abide by new rules that came into effect this month. Source: Getty

Who is affected?

The rules apply to anybody hoping to drive on NSW roads that hold international or interstate licenses, though, some people who have come from a select list of countries may need to take a driving test upon arrival. Drivers 75 years or older are required to undergo a medical review and may need to take a practical driving test.

"The rule originally applied to anyone who takes up residence in NSW from July 2023," the TfNSW spokesperson said. "However, this has now been extended to capture those who reside in NSW prior to the 1 July 2023 date."

What tests are involved?

According to TfNSW, people entering the state from a certain list of countries might be required to take a physical driving test if they want to drive on NSW roads. A list of countries not required to take any sort of test can be found here. They including the US, New Zealand, the UK, Canada and most of Western Europe.

A Facebook user trying to trade demerit points for money.
The new crackdown will likely put an end to dodgy demerit point trade on Facebook Marketplace, where foreign nationals take on Aussie drivers' points for a fee. Source: Facebook

What are the penalties for failing to convert?

If travellers or permanent residents on overseas licences do not make the switch to a NSW licence in the designated time frame they will be ineligible to drive on the state's roads. Hefty fines, loss of demerit points and even jail time could occur for those caught doing the wrong thing.

When do the changes come into effect?

They're in effect now, introduced at of start of this month. The requirement to convert to a NSW licence within three months of moving to NSW for Australian citizens, Australian permanent residents and New Zealand citizens has been in place since at least the 1990s.

Why were the changes introduced?

The new rule changes will address the selling of demerit points on social media, including on Facebook Marketplace, where foreign drivers would cop Australian drivers' points for a fee, as they did not face a limit on how many they could accrue without being banned from the road.

A text exchange of somebody trying to trade demerit points for money.
Last year, Yahoo News contacted a seller who told us how he got away with the scheme. Source: Supplied

Under the deal, the seller steps forward to take on the person’s penalty for offences such as speeding and using a mobile phone while at the wheel in exchange for big bucks.

It’s just the tip of the iceberg with an entire black market operating online in the exchange of demerit points for cash. On Marketplace, there are dozens of posts in Sydney alone where cash is offered to take on demerit points.

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