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# The Dutch Tax Authority Hardened Its Childcare Benefit Fraud Rules After a Bulgarian Benefits Scam Came to Light in 2013. The New Rules Branded Tens of Thousands of Parents as Fraudsters and Have Cost Over €7 Billion to Undo.
- URL: https://whywecanthavenicethings.info/dutch-childcare-benefits-scandal/
- Published: 2026-10-12T16:00:00.000Z
- Updated: 2026-10-12T15:59:59.000Z
- Author: The Complaints Department
- Tags: Investigations

In the Netherlands, childcare benefit was paid in advance. Parents applied, the Belastingdienst's benefits department, Toeslagen, sent the money, and the checking came afterwards. In 2013 it emerged that criminals had been exploiting the order of those steps. According to NOS, they recruited Bulgarians to register in the Netherlands, collect benefits and then go home to Bulgaria, at a cost to the Dutch treasury of millions of euros. The press and parliament were outraged, and the outrage had a destination.

Gerard Blankestijn, the former head of Toeslagen, later told a parliamentary inquiry what happened next. State Secretary for Finance Frans Weekers came to the tax office in person and addressed several hundred employees in what Blankestijn described as an emotional speech. Weekers's position was at stake, Blankestijn testified, and the message was unambiguous: "dit mocht nooit meer gebeuren" — this must never happen again. The department had been seen as having paid out to Bulgarians with its eyes closed. From then on, benefits were stopped on far less evidence of fraud than before. NOS would later summarise the consequence in a single sentence: the stricter approach helped bring about the toeslagenaffaire.

## All or Nothing

The machinery that followed rested on two ideas. The first was that a parent who could not account for any part of the advance owed back all of it. The second was the label "opzet/grove schuld", intent or gross negligence. The parliamentary inquiry later found that small errors were quickly treated as deliberate fraud, and that the all-or-nothing approach, together with the way the label was applied, had been a gross infringement of citizens' individual interests. The benefit, it said, had been administered as a mass process with no room left for the individual case.

The courts did not intervene. The Administrative Jurisdiction Division of the Raad van State, the country's highest administrative court, upheld the "all-or-nothing" line from 2011 to October 2019\. In a reflection report published in November 2021, the division called its own approach "not appropriate". Its chairman, Bart Jan van Ettekoven, said the court "could and should have changed the strict line earlier", that it had "struggled with it, taken half measures and not followed through", and apologised to the parents.

## The Model

The tax office also had help. From 2013, according to Amnesty International, Toeslagen used a self-learning risk-classification model to score applications for the likelihood of error or fraud. One of its inputs was whether the applicant had Dutch nationality. Non-Dutch nationals scored higher. Civil servants who reviewed the flagged files were given no explanation of why the system had flagged them. Amnesty's October 2021 report on the system was titled "Xenophobic Machines". "Thousands of lives were ruined by a disgraceful process which included a xenophobic algorithm based on racial profiling," said Merel Koning, its senior adviser on technology and human rights.

On 7 December 2021 the Autoriteit Persoonsgegevens, the Dutch data protection authority, fined the Belastingdienst €2.75 million. It found that the agency had processed applicants' dual nationality unlawfully and discriminatorily: storing it, using it as an indicator of fraud risk, and feeding it into the risk-classification model. The data should have been deleted in January 2014\. In May 2018 the dual nationalities of about 1.4 million people were still in the system. "That went badly wrong with Toeslagen, with all the consequences that ensued," said the authority's chairman, Aleid Wolfsen. Alexandra van Huffelen, the state secretary responsible, called the fine very painful and said she would pay it.

Four months later the authority fined the tax office again, €3.7 million this time, for the Fraude Signalerings Voorziening, an internal blacklist of some 270,000 people. According to DutchNews, the criteria used to land on it had included Turkish, Moroccan or Eastern European nationality, a "Mediterranean" appearance, and donations to mosques.

## The Memo

One of the first cases to surface concerned a childminding agency in Eindhoven. A fraud team at the tax office stopped the benefits of hundreds of parents who used it, on information NOS later reported was out of date, with the approval of a Fraud Management Team whose members included the director-general of the Belastingdienst, the director of the fiscal intelligence service FIOD and the head of Toeslagen. RTL Nieuws and Trouw reported on it in 2019.

In March 2017 Sandra Palmen, the senior lawyer at Toeslagen, had already written a memo concluding that the agency had acted reprehensibly and that roughly 300 parents should be compensated. "Hoe is het mogelijk geweest de toeslag voor driehonderd burgers op deze wijze stop te zetten?" she asked: how had it been possible to stop the benefit for three hundred citizens in this way? The memo was not acted upon. It resurfaced at crisis meetings at the Ministry of Finance on 4 June 2019, in the presence of Jaap Uijlenbroek, the director-general of the Belastingdienst, and Manon Leijten, the ministry's secretary-general, and became public in October 2020 after questions from the CDA MP Pieter Omtzigt. In November 2020, under oath before the inquiry, senior officials said they had not received the memo or could not recall it. In May 2023 the public prosecutor declined to bring perjury charges against three of them. The former director-general, it was explained, had meant that he had never personally received, read or studied it.

## The Buck

The inquiry committee, chaired by Chris van Dam, presented its report on 17 December 2020\. It was titled "Ongekend onrecht", unprecedented injustice. The parents, Van Dam said, had mostly made no substantive mistakes; they had been treated as fraudsters when in many cases they had at most got some paperwork wrong. The committee found that fundamental principles of the rule of law had been violated, and that the overheated political debate about fraud had produced a culture with too little regard for the human dimension.

On 15 January 2021 Prime Minister Mark Rutte's third cabinet resigned. "We are of one mind that if the whole system has failed, we all must take responsibility," Rutte said. "The buck stops here." The cabinet stayed on in a caretaker role until the election already scheduled for 17 March. Rutte's VVD won it with the most seats in parliament. "Dutch voters gave my party an overwhelming vote of confidence," he said.

## The Repair

When the cabinet fell, it promised each affected parent €30,000, and the Associated Press reported that €500 million had been earmarked for more than 20,000 of them. NOS reported that the repair operation had first been budgeted at €310 million. In the two months after the €30,000 was announced, registrations rose from 9,200 to 17,800\. By January 2024 the operation had cost €7.2 billion, 67,584 parents had registered, and about 30 percent of all spending had gone on carrying it out, against an average of under 5 percent across central government. Roughly three quarters of the staff of the organisation running it were external hires, who cost about twice as much as civil servants.

By November 2025, 43,503 people had been recognised as victims, each receiving at least €30,000 and a letter of apology, and €3.377 billion had been paid out. A final compensation phase opened with a list of 29 categories of damage and a target of finishing within two years. A damaged bond within a family was listed at €2,000.

The children came last. In October 2021 Statistics Netherlands counted 1,115 children of affected parents placed in care between 2015 and 2020, while noting it could not say whether the scandal was the cause. In March 2025 a commission led by Mariëtte Hamer concluded that the scandal had played a large role. By then the estimates of the number of children removed ranged from 2,090, according to Statistics Netherlands, to 3,058, according to the Ministry of Justice. "Vaak wisten de kinderen niet eens waarom ze uit huis geplaatst werden," the commission found: often the children did not even know why they had been taken away.

The Bulgarian scheme had worked because the tax office paid first and checked later. The tax office solved this by checking everyone, presuming the worst of what it found, and asking for the money back. The fraud cost the treasury millions of euros. The cure has cost it billions, and the state is still checking the parents' claims, this time for compensation, one file at a time.

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*Filed from public reporting:*

- [Tweede Kamer — "Toespraak Chris van Dam bij de presentatie van het verslag van de Parlementaire ondervragingscommissie Kinderopvangtoeslag"](https://www.tweedekamer.nl/sites/default/files/atoms/files/20201217%5Ftoespraak%5Fchris%5Fvan%5Fdam%5Fparlementaire%5Fondervragingscommissie%5Fkinderopvangtoeslag%5F0.pdf)
- [Amnesty International — "Dutch childcare benefit scandal an urgent wake-up call to ban racist algorithms"](https://www.amnesty.org/en/latest/news/2021/10/xenophobic-machines-dutch-child-benefit-scandal/)
- [NOS — "Boete voor Belastingdienst van 2,7 miljoen voor discriminatie toeslagenouders"](https://nos.nl/artikel/2408587-boete-voor-belastingdienst-van-2-7-miljoen-voor-discriminatie-toeslagenouders)
- [NOS — "'Topambtenaren hadden belangrijke memo toeslagenaffaire wel gezien'"](https://nos.nl/artikel/2384530-topambtenaren-verzwegen-belangrijke-memo-toeslagenaffaire)
- [Advocatie — "Raad van State biedt excuses aan voor te strenge lijn in toeslagenaffaire"](https://www.advocatie.nl/nieuws/raad-van-state-biedt-excuses-aan-voor-te-strenge-lijn-in-toeslagenaffaire)
- [Associated Press (via Chicago Sun-Times) — "The buck stops here: Dutch government quits over welfare scandal"](https://chicago.suntimes.com/2021/1/15/22233157/dutch-government-quits-over-welfare-scandal)
- [NOS — "De Toeslagenaffaire: van een miljoenen- naar een miljardenoperatie"](https://nos.nl/artikel/2503966-de-toeslagenaffaire-van-een-miljoenen-naar-een-miljardenoperatie)
- [NOS — "Toeslagenaffaire had grote rol bij uithuisplaatsingen: 'Gevolgen elke dag voelbaar'"](https://nos.nl/artikel/2561277-commissie-toeslagenaffaire-had-grote-rol-bij-uithuisplaatsingen)