The Dutch tax service has been fined €2.7 million by the privacy watchdog for discriminating against dual national families who were targeted in the childcare benefit scandal.

The data protection authority AP said tax inspectors should not have kept records of people’s second nationality or used them in deciding whether to investigate families for benefit fraud.

AP chairman Aleid Wolfsen said citizens needed to be sure that the government was not collecting more personal information than was legally necessary and that discrimination was not a factor in its decision making.

‘That went badly wrong with Toeslagen [the department handling allowances], with all the consequences that ensued,’ he said. ‘Obviously this fine cannot turn back all that, but it is an important step in a wider recovery process.’

Junior finance minister Alexandra van Huffelen said the fine was ‘very painful’ and the government would endeavour to pay it before the end of the year.

‘The AVG [privacy law] and the ban on discrimination should be respected,’ she said. ‘The rules should be applied equally in every case. I offer my sincere apologies once again.’

Cabinet resigned

The childcare benefit scandal prompted the resignation of Mark Rutte’s cabinet in January, two months before the general election, after a report by a parliamentary commission concluded the victims had been subjected to an ‘unprecedented injustice’.

Between 2004 and 2019 thousands of families had their benefits stopped and were ordered to repay what they had received, sometimes because of technical transgressions such as failing to sign a form. Some people were forced to sell their homes and possessions after they were denied access to debt restructuring.

Some 15,000 people have received a €30,000 compensation payout promised in the wake of the commission report, but thousands more are still waiting for their cases to be assessed.

The AP last month also criticised the Netherlands’ highest administrative court, the Council of State, for failing to notice that people with dual nationality were disproportionately affected when they tried to appeal their cases.

The court subsequently apologised to families for not protecting their legal rights adequately. ‘We took a strict line for too long,’ Bart Jan van Ettekoven, chairman of the court’s administrative law department, said.