Rotterdam city council in 2011 paid almost €1m to health insurance company Zilveren Kruis to buy off the debts of around 1,000 social security benefit claimants.

The AD broke the story on Thursday morning, and it was later confirmed by a city council alderman. In total, 2,500 people had their debts paid.

The council executive says it made the payments to prevent the people getting into further financial difficulty. According to the AD, the full council was not informed about the deal to head off negative reactions.

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The debts were paid of people who were on the verge of ending up on the official debt register, which would have made their financial problems worse.

In total, €7m was owed to the health insurance company. Of that, almost €1m was paid by the council and a smaller sum by the health insurers’ association CVZ. Health insurance premiums include a sum to cover unpaid debts, a Zilveren Kruis spokesman told the paper.

It is unclear how much of the money has since been recovered from the benefit claimants or if they were paid extra healthcare benefits at the time. Zilveren Kruis says some 7,000 people in Rotterdam are currently in arrears with their premiums.