Dutch childcare benefits scandal
[1][2] Between 2005 and 2019, approximately 26,000 parents were wrongly accused of making fraudulent benefit claims, resulting in demands to repay their received allowances in full.
[1][2] The scandal gained public attention in September 2018, prompting investigations that criticized the Tax and Customs Administration's procedures as discriminatory, particularly affecting parents with foreign backgrounds and characterized by institutional biases.
However, part of the costs may be covered by childcare benefit, which is available to families in which all parents are either employed or enrolled in secondary or tertiary education or a civic integration course.
[11] In 2005, the General Act on Means-tested Benefits (Dutch: Algemene wet inkomensafhankelijke regelingen) was introduced, which reorganised the existing welfare system.
[11] A notable example is the case of the childminding agency De Appelbloesem in Beilen, which provided informal babysitters (e.g. grandparents babysitting their grandchildren) with a formal employment contract, so that they could apply for childcare benefit and split the money between them.
[11] In 2009, the Fiscal Information and Investigation Service (FIOD) raided the agency, and its director was sentenced to eighteen months' imprisonment for forgery and fraud.
[11] In November 2010, the House of Representatives passed a motion to recover the funds given to fraudulent childminding agencies rather than indebting parents who acted in good faith.
[14] The clients of De Appelbloesem appealed the decision of the Tax and Customs Administration, but after several lawsuits, the Council of State confirmed that the law required them to pay back the childcare benefits they had received.
This committee developed a broader strategy for the national government's anti-fraud campaign but did not specifically consider the Tax and Customs Administration's approach to welfare fraud.
In late 2013, the committee prepared a letter to the House of Representatives, which initially set out a strict approach, but ultimately emphasised the need to act proportionately and to trust rather than to mistrust.
[14] Another group of approximately 8,000 parents fell afoul of strict administrative policies, in which a small mistake (e.g. a missing signature or an undeclared change in income) could lead to a full clawback of the childcare benefit.
[21] In November 2020, State Secretary for Finance Alexandra van Huffelen released an internal memorandum from 2016, in which it is recommended that anyone with a childcare benefit debt exceeding €3,000 should automatically receive the "Deliberate intent/Gross negligence" qualification.
[28] In contrast to previous rulings, the Council of State expressed the opinion that the Tax and Customs Administration did in fact have the power to assess proportionality on a case-by-case basis.
[29] In 2019, State Advocate Bert-Jan Houtzagers [nl] had issued a draft recommendation, which hinted that the law allowed for a less harsh approach for parents who had not paid a personal contribution on the advice of their childminder agency.
[35] On 1 July 2019, State Secretary for Finance Menno Snel established the Advisory Committee for the Implementation of Benefits (Dutch: Adviescommissie uitvoering toeslagen).
The committee also included former State Secretary for Social Affairs and Employment Jetta Klijnsma and jurist Willemien den Ouden [nl].
[18] After reports from RTL Nieuws and Trouw on the use of racial profiling in the assessment of benefit applications, the Dutch Data Protection Authority (AP) decided to start an investigation into the Tax and Customs Administration in May 2019.
The AP described the Tax and Customs Administration's working method as "unlawful, discriminatory and improper" and stated that it had seriously violated the General Data Protection Regulation (GDPR).
[4] Chairman Aleid Wolfsen [nl] wrote: "Our investigation has shown that the Benefits department of the Tax and Customs Administration [...] saved and used data in a way that is absolutely prohibited.
[42] On the initiative of member Bart Snels of GroenLinks, the House of Representatives established the Parliamentary Interrogation Committee on Childcare Benefits (Dutch: Parlementaire ondervragingscommissie Kinderopvangtoeslag, POK) on 2 July 2020.
[50] In the second week, seven (former) members of government were interrogated: On 17 December 2020, the committee presented a report entitled "Unprecedented Injustice" (Dutch: Ongekend onrecht) to Speaker of the House of Representatives Khadija Arib.
The committee wrote that the affected parents did not receive the protection they deserved as a consequence of the group penalties implemented by the Ministry of Finance, thus violating the "fundamental principles of the rule of law".
[54] In December 2020, after the report of the parliamentary interrogation committee had been published, the former Minister of Social Affairs and Employment Lodewijk Asscher personally apologised for his role in the childcare benefits scandal.
[68][67] On 7 January 2021, the Public Prosecution Service announced that it would not start a criminal investigation based on the Ministry of Finance's report, because after a careful assessment there was no evidence of gagging and professional discrimination.
In addition, the Public Prosecution Service referred to the sovereign immunity of the Tax and Customs Administration, which also includes its officials who implemented the policy, provided that they do not act out of their gain or interest.
[68] On 12 January 2021, a group of twenty affected parents filed a complaint against several government officials involved: Tamara van Ark, Wopke Hoekstra, Eric Wiebes, Menno Snel, and Lodewijk Asscher.
Several released documents show that the Prime Minister had been involved in the decision to take steps since May 2019 while illegal collection by the Tax Authorities continued until November 2019 or longer.
A day later, State Secretary Van Huffelen put forward a more extensive compensation scheme, totalling half a billion euros.
[73] Because the payment of compensation was slow, the Socialist Party successfully pushed for a Christmas gift of 750 euros, which was paid in December 2020 to 8,500–9,500 of the affected parents.
[76] In July 2020, it became public that State Secretary Snel wanted to compensate the victimised parents in the CAF 11 Hawaii case earlier, in June 2019.
