What is the Childcare subsidy scandal?

International Jan 20, 2021

The government of the Netherlands provides families and single parents three common benefits and allowances for their children. They include the Child Benefit, Child Budget, and Childcare Benefit, which aim to cover the costs of raising children of different age groups taking their family background and income into consideration.

However, last month’s parliamentary inquiry report brought a scandal into the light. Thousands of families were wrongly accused of defrauding the tax office and ordered to pay back benefits, causing many acute financial problems. The unprecedented injustice had resulted in unemployment, bankruptcy, divorce. Particularly the ethnic minorities are still facing insurmountable debts.

Since 2012, the fundamental principles of the rule of law were violated by the Dutch tax authority and fraud investigations as the families were often triggered with administrative errors. Around 11000 dual national families, most of them belonging to ethnic minorities were contacted by the Dutch tax office for strict checks which brought up the systemic racism within the Dutch bureaucracy. The tax service had to date wrongly accused 26000 parents of fraud and had ordered over 10000 families to repay huge amounts of child subsidies.

Amongst these victim families, 20 families took legal action against several ministers from the coalition for criminal negligence by failing to adhere to the principles of good governance, discrimination, and violating children’s rights.

As a result, the Dutch government announced a compensation of at least 30,000 euros for each of the families falsely accused of fraud. Also, Dutch Prime Minister Mark Rutte resigned from his post and on behalf of the center-right four-part coalition has taken up the responsibility of the complete scandal. After the widespread criticism, the Social Affairs Minister (2012 to 2017) stepped down from his job on 14th January 2021, insisting on his unawareness of wrongly hunting down thousands of families by the tax authorities.

Though the government was against resigning the posts as it would hinder the national response to the pandemic, the public pressured the government to resign. Until the general election of 17th March 2021, Rutte and his cabinet will only stay on in a caretaker capacity. However, high chances to win a fourth term for the party are foreseen with 30% of the votes. Since 2010, when he first came to power, Rutte has been reelected twice.

This article has been written by Pooja Varade for The Paradigm

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