Netherlands childcare benefits fraud assessments automation

The Netherlands' childcare benefits scandal (kinderopvangtoeslagaffaire, or toeslagenaffaire) was a controversial scheme that automated the assessment and payment of childcare benefits by creating risk profiles of citizens and predicting the likelihood of their committing fraud.

Risks and harms 🛑

Termed (pdf) an 'unheard-of injustice' by a parliamentary inquiry, the system led to false accusations of fraud by the country's Tax and Customs Administration levelled at approximately 26,000 families, resulting in deep mental stress for many of those involved, financial ruination, and suicide, with over a thousand children having to be taken into foster care.

• The scheme's shortcomings and failures had been exposed many times before the parliamentary inquiry. Examples of fraud against the system had emerged soon after its launch in 2013, closely followed by cases involving suspected fraud, a number of which proved unfounded.

• Substantive allegations of racial and ethnic profiling were levied by broadcaster RTL Nieuws and the Trouw newspaper in September 2018. Dual nationality and low income seen as major risk indicators, as was having a 'non-western appearance'.

• In 2020, it was revealed that the tax authorities had kept secret blacklists of potential fraudsters for two decades. Being on the blacklist resulted in a higher risk score in the childcare benefits system.  

• These allegations led to a damning Dutch Data Protection Authority report which found the system 'unlawful, discriminatory and improper', and a parliamentary inquiry.

• The government promised to reimburse each family EUR 30,000, only for the tax authority to demand much of it back in taxes. Eventually, the government cancelled the debts of those families impacted.

• The scandal led to the collapse of the Dutch government after a vote of no-confidence was called by opposition parties. 

Legal, regulatory 👩🏼‍⚖️

• Dutch Data Protection Authority; April 22, 2022: Boete Belastingdienst voor zwarte lijst FSV

• Tweede Kamer der Staten-Generaal; December 17, 2020: Ongekend Onrecht (Unknown Injustice) (pdf)

• Dutch Data Protection Authority; July 17, 2020: Werkwijze Belastingdienst in strijd met de wet en discriminerend

• Donner Committee; March 12, 2020: Omzien in verwondering 2: Eindadvies Adviescommissie Uitvoering Toeslagen

• National Ombudsman; August 9, 2017: No power play, but fair play

Research, advocacy 🧮

• Amnesty International; October 25, 2021: Xenophobic Machines

News, commentary, analysis 🗞️

• Politico; March 29, 2022: Dutch scandal serves as a warning for Europe over risks of using algorithms

• DutchNews.nl; October 26, 2021: Tax office algorithm led to racial profiling: Amnesty International

• Vice; March 1, 2021: How a discriminatory algorithm wrongly accused thousands of families of fraud

• Caribisch Network; February 1, 2022: Veel Caribische Nederlanders slachtoffer toeslagenaffaire

• Trouw; January 26, 2021: Rekenkamer: te weinig aandacht voor discriminatie bij gebruik algoritmes door overheid

• The Economist; January 23, 2021: A benefits scandal sinks the Dutch Government

• AP; January 15, 2021: The buck stops here: Dutch govt quits over welfare scandal

• The Guardian; January 14, 2021: Dutch government faces collapse over child benefits scandal

• de Volksrant; October 19, 2021: Ruim 1.100 kinderen van gedupeerden toeslagenaffaire werden uit huis geplaatst

• Trouw; November 27, 2021: Sibel werd ziek van de Toeslagenaffaire en kan en wil er niets meer over horen

• Trouw; November 14, 2020: Wie wist wat in de toeslagenaffaire? De kluwen van hoofdrolspelers ontward

• De Correspondent; November 13, 2020: Tienduizenden-gedupeerden-maar-geen-daders: Zo ontstond de tragedie achter de toeslagenaffaire

• Trouw (collection): The allowance affair