Udbetaling Danmark welfare payments optimisation prompts controversy

An automated welfare fraud control system accessed the personal data of millions of Danish citizens, including those not receiving benefits, leading to accusations of privacy violations.

Created in 2012 to profile unemployed citizens and streamline the payment of welfare benefits, Udbetaling Danmark used fraud control algorithms that can access the personal data of millions of citizens. 

The data network allowed Udbetaling Danmark to automate checks required before benefits are granted, such as verifying income level or wealth. It also allowed the organisation to perform controls after a benefit had been granted to verify that a beneficiary’s situation had not changed.

However, it transpired that Udbetaling Danmark had access to the personal data of citizens who did not receive welfare payments, leading to complaints from legal, civil rights and privacy advocates, who described the situation as a 'surveillance nightmare’.

The controversy highlighted the challenges and pitfalls of using data and automation in the management of welfare payments.