Netherlands childcare benefits fraud automation
Updated: November 2021
The Dutch government has collapsed in all but name as a result of a childcare benefits scandal (or 'kinderopvangtoeslagaffaire') termed an 'unheard-of injustice' by a parliamentary inquiry and reputedly involving false accusations of fraud by approximately 26,000 families; national, racial and ethnic profiling; and financial ruination.
Run by the country's Tax and Customs Administration on behalf of its Ministry of Social Affairs and Employment, the more or less fully automated decision-making scheme used algorithms to create citizen risk profiles and predict the likelihood of their committing fraud. Welfare seekers were not informed about the algorithms, and had very little ability to complain or appeal decisions.
The scheme's shortcomings and failures had been exposed many times before the parliamentary inquiry. Examples of fraud against the system 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, leading to a damning Dutch Data Protection Authority report which found the system 'unlawful, discriminatory and improper'.
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.
Operator: Tax and Customs Administration; Ministry of Social Affairs & Employment
Developer: Tax and Customs Administration; Ministry of Social Affairs & Employment
Sector: Govt - Finance; Govt - welfare
Purpose: Detect compliance errors, Detect fraud; Assess fraud risk
Technology: Risk classification model
Issue: Accuracy/reliability; Bias/discrimination - nationality, race; Privacy
Opacity: Black box; User communication; Complaints & appeals