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The Childcare Benefits Scandal in the Netherlands

The Childcare Benefits Scandal
Many regard the Netherlands as a prosperous nation. The majority of its residents live decent lives and can easily access social welfare benefits. However, like many places throughout the world, the country has seen an increase in the number of people who can no longer make ends meet. Even with benefits assistance, 1 million out of 17 million people suffer economically. This crisis has affected all demographics. There is growing evidence of the disproportionality of this economic stratification. Certain government agencies and policies that the Netherlands intended to serve as financial safety nets for people caused more harm for some than good. This resulted in the childcare benefits scandal.

Over the past two years, the country has dealt with de toeslagenaffaire or “the benefits affair.” This is a scandal involving the illegal reclamation of social benefits by the government. It forced many victims into financial ruin. The scandal exposed both the overzealous anti-fraud practices of the Dutch tax services. It also exposed their continued unconstitutional ethnic profiling of fraud suspects. In January 2021, the third cabinet of Prime Minister Mark Rutte, known as Rutte III, resigned over the scandal. This article addresses the causes and consequences of the toeslagenaffaire. It is one of the most recent, dramatic examples of corruption and institutional bias in Dutch history.

De Toeslagenaffaire: What Exactly Happened?

Over the past decade in the Netherlands, tens of thousands of innocent people received social benefits for childcare. The belastingdienst (Tax and Customs Agency) falsely identified the people as having committed welfare fraud. The system declared it the childcare benefits scandal. The case sparked increasing outrage. Moreover, the system flagged the parents as fraud risks due to their nationality.

In 2012, the belastingdienst used people’s second nationality as one of the five so-called “indicators” of potential fraud. This was in addition to four other factors, such as possessing high-deductible items. In 2014 and 2015, the Netherlands amended privacy laws. This prevented access to information regarding a benefit recipient’s nationality from the belastingdienst in an effort to combat institutional discrimination.

However, the belastingdienst retained access to personal records belonging to benefits-receivers created prior to the removal of the person’s nationality. After this came to light, the Adeling Toeslagen (Benefits Department) continued to deny ethnic profiling, arguing that it was only concerned with an individual’s Dutch nationality. Adeling Toeslagen did not single out any nationality. It investigated all Ghanian nationals in 2020 based on evidence. Spokespeople from the belastingdienst claimed discrimination based on nationality was different than discrimination based on race or origin. However, the Adeling Toeslagen later admitted to engaging in ethnic profiling.

Stripped Benefits

Being falsely identified as fraudsters resulted in parents being stripped of their benefits and ordered to repay said benefits in full. When parents protested these false fraud allegations, they could not obtain legal aid, their objections routinely received dismissal and they still had to pay. This often amounted to tens of thousands of Euros. The scandal plunged very low-income families into crisis, resulting in many losing their personal possessions, jobs and marriages.

Justice in Court

The court awarded the parents 30,000 Euros (just over $36,000 USD) eventually. The court distributed the funds over a span of four months. The court expected payment from the parents concerning illegal debt. In fact, one ruling stated that parents must use at least two-thirds of their allotted 30,000 Euros to repay the illegal debt concerning the childcare benefits scandal. However, authorities eventually waved their full debts so that they could keep their full compensation amount. However, many still have not received their compensation.

Who Was Responsible?

There are still cases and inquiries pending. However, little accountability has occurred thus far. The court forced the Rutte III cabinet to resign. The court held no member responsible for the matter. This was based on a high court ruling claiming although the rule of law had been violated, the belastingdienst, as an institution, was immune to prosecution. The court did not prosecute any individual official. The members committed no discrimination “in their own interests.” This was despite the fact employees of the belastingdienst – who had sounded the alarm for years about the issue – had called for the prosecution of their managers themselves.

Cabinet Members Unharmed

Despite the media attention, the resignation of the Rutte III cabinet was of little consequence to the cabinet members. Mark Rutte’s first cabinet, Rutte I, had to resign in 2012. This occurred after his coalition was unable to find a compromise regarding the proposed introduction of controversial austerity measures. The cabinet re-appointed him as Prime Minister twice after his resignation. A statement from 2003 convicted Mark Rutte of racism in 2007 when he was Secretary of State. He subjected Somali residents to extra fraud investigations concerning the childcare benefits scandal.

Even though Rutte III has resigned, each member may serve in their position until elections on March 17, 2021. Continuous elections will allow each member to hold office. Rutte’s party, the People’s Party for Freedom and Democracy (Volkspartij voor Vrijheid en Democratie) appears poised to secure another victory in the upcoming elections. This is based on a current Ipsos poll, even after losing some support in the wake of the resignation of Rutte III.

Olivia Nelson
Photo: Pixabay