Aided by an algorithm, the Dutch tax office has plunged into distress tens of thousands of families – in particular, foreign-born mothers, in wrongfully demanding from them staggering sums. The state is proving incapable of setting things right.
Rotterdam. Each day, Sabrina Sliep picks up her telephone to listen to the same despairing stories. There are families evicted from their residence, today camping with relatives or friends, mothers who work two jobs to keep their heads above water, parents who struggle with depression. Personal trajectories broken one day by a letter from the tax office and which remain fractured. “Some need counselling for what action to take, others just cry and want to be listened to”, sighs the nurse, emotional, in a café on Rotterdam’s periphery.
Sabrina Sliep provides a basic service for ‘Lotgenotencontact’ [‘fellow sufferers’ contact], a crisis hot line established in March 2022 for and by the victims of the ‘Toeslagenaffaire’ [the ‘family allocations’ affair]. Like them, the forty-something year old is facing demands from the tax office and the office responsible for the payment and control of social benefits for a reimbursement of a colossal ‘overpayment’ of the order of €70,000.
Like others, she has had no right to any recourse, and no explanation. Given that she lives alone with her two children, she has put her life in suspension to clear a debt while having no idea of its origins. Since 2012, 25,000 to 35,000 families could have been victims of this affair, product of a succession of failures of the state: presumption of guilt towards honest households, blind confidence in a xenophobic algorithm, intransigence of an administration deaf to warning signals and distress.
At Eindhoven, in the South-East of the Netherlands, in a workers’ quarter characterised by cookie cutter dwellings, Leigh-Anne Jansen recounts how she had received the first letter from the tax office in 2014. The young woman, today 32, was then in training and her husband, of Turkish origin, worked at the factory. The couple received assistance in financing child-minding for their 3 year old daughter. Around 583,000 households receive this allocation to cover a part of the costs of childcare of parents working or in training. The sum can cover the bulk of the bill of a creche or employment of a nanny but it fluctuates according to numerous parameters. Hence there is a more elevated risk of payment errors than for other forms of benefits.
In the Netherlands, the government has acquired a contempt for welfare measures. After the 1980s, the struggle against welfare fraud became a political hobby horse. In 2010 and 2012, the agreements between the coalition of the current Prime Minister, Mark Rutte (from the centre right party VVD [People’s Party for Freedom and Democracy]), promised to further enhance surveillance while slashing, in the name of efficiency, the staff of the dedicated services.
Beginning 2013, to augment the controls at least cost, an algorithm attributes to each beneficiary a risk score, from 0 to 1, according to the supposed probability that the claim should be incorrect or fraudulent. It functions as a ‘black box’; even the agents responsible for the dossiers after reporting don’t understand the criteria.
The consequences multiply
In 2014, Leigh-Anne Jansen and her husband are summoned to prove that their allocation has been used to pay for childcare. They furnish the particulars. “But the tax office just demands more documents, without specifying what document they want”, Jansen notes.
Then the allocation itself stops and a formal demand arrives to reimburse “€7,000, then €9,000, €5,000 …”, linked to the years of benefits that the couple is supposed to have received erroneously. Her requests for explanations stay dead letter. Leigh-Anne Jansen has no alternative but to pay up. “I have no more assistance, nothing to pay the nanny. I have stopped my studies to stay in the house and my husband flogs himself to work longer hours. We have borrowed money from friends to head off the bailiff and have moved house so many times in panic that we are broke.”
Everywhere in the Netherlands, parents describe the same Kafkaesque spiral. At the beginning of the 2010s, the lawyer Jaap Spigt is approached by 60 clients of a nursery school in Capelle aan den IJssel, a commune to the East of Rotterdam. One family has totted up €70,000 of debt, another more than €130,000 …
Rather than receive the benefit in their own account and then pay the creche, the families had accepted the demand of the creche’s director that the allocation be paid directly to the establishment. They discover much later that the employee responsible had overstated the hours to inflate its reimbursements from the state. This was a scam practised by other organisations at the time.
But in the eyes of the tax office, little import that the families have been unaware of the deception and had pulled no profit from it. “I have even asked them: ‘At least give them a delay to be able to pay, or let them reimburse more reasonable sums’, but they don’t want to hear”, remembers the lawyer Jaap Spigt. In nearly forty years of career, the criminal lawyer notes that he has never been so taken aback by a dossier. “Like in a game of dominoes, the families have suffered one catastrophe after another which finds their origins in the Toeslagenaffaire.”
One time accused of fraud, the parents are no longer able to seek any benefits for childcare. Those who have not the means to finance a place in a creche or hire a nanny abandon their employment or their training. More often than not, these are the mothers. At Capelle aan den IJssel, the municipality has released funds to avoid evictions of the most indebted renters. But elsewhere in the country, the cases pile up.
Because they receive the benefits the most consequential, the most precarious households – single mothers for example – have been confronted with quantitatively the most significant reimbursements. To settle their debt, the administration has engaged in aggressive recovery tactics: it cuts their other subsidies (rental assistance, family allowances …) and deducts directly from their bank accounts this that it judges its due. “Between 2014 and 2019, the tax office has left me only €800 per month to live”, notes Sabrina Sliep. “I have dropped my plan to retrain. I have had to entrust my children to my ex-partner to keep working and to not go down completely.”
In the centre of Rotterdam, Estephanie Zut, of Dominican origin, also single mother, seller of hair products, claims to have suffered the same fate: “I’ve had to throw other activities to one side, to work seven days on seven to survive. It was crazy, but I believed myself alone and I was ashamed”.
“Over the years, we have notified all the relevant authorities, but everywhere, the doors close on us”, sighs Willeke Ravenna, the ex-manager of the creche at Capelle aan den IJssel. Ms Ravenna (who was unaware of the scam perpetrated by her establishment’s administration) observes, helpless, some families topple over into poverty, some parents “broken from head to toe”, some couples split up.
The lawyer Eva Gonzalez Perez moves heaven and earth. Chance has it that her husband should be running a creche in which 157 clients find themselves accused of fraud. In taking their files before the courts, helped by a source from inside the tax office, this legal expert of Eindhoven has accumulated proof of dysfunctionality. She recounts: “I discover the existence of lists of fraudsters, but the tax office refuses to explain why such people are listed there. I also have proof that the taxation staff receive instructions to not furnish to justice all the documents in their possession.
In 2017, seized by Eva Gonzalez Perez, the Dutch Ombudsman looks into the first group of families and concludes that the taxation authorities have not proved the existence of fraud. This which has not prevented them from taking action “in presupposing that fraud was involved”, without consideration for the distress provoked by such “disproportionate” sanctions. The Ombudsman demands apologies, and compensation. They will take more than three years to arrive, in spite of other warnings and several overwhelming articles in the press.
It takes a Parliamentary inquiry to transform the story into an affair of state. In December 2020, outraged Deputies accuse the tax office, but also the justice system, which has dismissed the families’ pleas and the legislator – to have “violated the fundamental principles of the state of law”. The parliamentarians denounce an “injustice without precedent” and the doctrine of “all or nothing” which allowed the authorities to sanction the least error as if indicating malintent.
They reproach the authorities for their headlong rush to garner more money and to justify the integrity of the controls, all in seeking to mask to the end the ensuing fiasco. “If they had put an end to the system in 2017 instead of concentrating on covering their errors, we would not have had a scandal of such scale”, regrets Renske Leijten, a Deputy of the Socialist Party and spokesperson for the victims in Parliament, accompanied by his counterpart Pieter Omtzigt (Independent). Leijten notes: “Their denial has driven the families into anguish and poverty”.
A ‘xenophobic machine’
In total, between 2012 and 2019, 25,000 to 35,000 persons have been accused of fraud – wrongly in 94 % of the cases. Among them, a great majority of foreign-born or bi-nationals, select targets of the controls, as the government has belatedly admitted. Nationality counts as a risk factor for the algorithm blindly followed by the taxation agents. But its functioning as a ‘black box’ and its ‘auto-learning’ character which allows the algorithm itself to identify criteria associated with the risk of fraud, have concealed the discrimination, as has denounced Amnesty International in a report on this textbook case of a ‘xenophobic machine’.
Besides, in case of an inquest into a fraud attributed to a beneficiary of foreign origin, the tax office is able to target controls on beneficiaries of the same nationality. The Autoriteit persoonsgevens [the Dutch Commission overseeing personal data protection] has sanctioned this procedure as “illegal and discriminatory”.
In February 2022, the victims have received a letter from the Prime Minister who soberly admits: “Our modus operandi in the past has been prejudicial towards you. You have not committed fraud. We offer you our sincere apologies”. Sabrina Slieps retorts: “I care little for their apologies. I have not seen my children grow up, I have not been able to change professions and to decide how to live my life. All that has affected my mental health and will never be recoverable”.
The victims have begun to receive a lump sum indemnity of €30,000 which, for many, won’t even cover the ‘overpayments’ demanded. Without speaking of the intangible suffering. “I have messed up many things with my youngest daughter because I could only work, work, to avoid destitution”, witnesses Estephanie Zut. “This history has destroyed thousands of lives and of dreams.”
An assistance service has been established to attempt to find some personalised solutions. But numerous families denounce the too complex procedures, which serve only to revive their traumas. Estephanie Zut, irritated, notes: “These last months, I have still threatened to have my lawyer intervene to get a response to my demand for support. Many parents have no longer the energy to keep fighting”.
The Netherlands has not finished with the ‘Toeslagenaffaire’. The psychological and social consequences for the children, for example, involving more than 10,000 victims in turn, is yet to be the subject of inquiries. The Parliamentary Opposition denounces a fake soul searching of the government which has admittedly resigned after this scandal, in January 2021 … only better to return a year later. The Deputy Renske Leijten concludes that “Nobody has shouldered responsibility for this affair. The culture at the head of the administration has not changed, neither the contempt with respect to welfare recipient, nor the lack of transparence”.
As for the algorithms which are claimed to automate fraud detection, they multiply in Europe, including in France, with the same opacity and the same potential for excess. On 5 October [2022], the Dutch Deputy in the European Parliament Samira Rafaela (of the Renew centre-right grouping) has warned the member states in the Strasbourg Parliament in calling to prevent the utilisation of criteria involving ethnic discrimination. Otherwise “this Dutch scandal will not be the only one in Europe”.
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