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Amsterdam investigating technical error that caused €188 million benefits overpayment

Amsterdam’s tax office is working to untangle the aftermath of a blunder that saw nearly €200 million too much paid out in housing subsidies.

The city council and the banks have reclaimed the excess cash, but some claimants have been left out of pocket.The city council is investigating the cause of the fault, which led to people on welfare receiving 100 times their annual payment. The excess was as much as €34,000 in individual cases.

The bank and the council say they have “technically” reclaimed the overpayments, but they must still decide who should bear the cost of the loss.

They must also decide how to deal with the debts incurred by people who spent or transferred the money before the error was spotted.

Many will not be in a position to repay the cash immediately, meaning the banks will have to arrange long-term repayment schedules and find ways to cover their losses in the short term.

A total of €188 million was paid out to nearly 10,000 people who receive government subsidies to pay their rent.

City alderman Pieter Hilhorst has ordered an external investigation and an immediate debate to identify the weakness in the system that led to the error.

“How can it be that no alarms went off?” he said. “It seems we’re able to pay out €188 million without realising it.”

Tax office staff have already begun contacting the most “severe cases” of people who at risk of financial hardship as a result of the administrative error.

All those affected have been sent a letter explaining and apologising for the mistake. It says: “Because we initially paid a much too high amount to you and have subsequently reclaimed the payment, you may be experiencing difficulties.

“Our mistake has caused uncertainty and we are deeply sorry. We apologise unreservedly for this.”