Blog by Sarah Giest at Data and Policy: “Various countries are digitalizing their welfare system in the larger context of austerity considerations and fraud detection goals, but these changes are increasingly under scrutiny. In short, digitalization of the welfare system means that with the help of mathematical models, data and/or the combination of different administrative datasets, algorithms issue a decision on, for example, an application for social benefits (Dencik and Kaun 2020).
Several examples exist where such systems have led to unfair treatment of welfare recipients. In Europe, the Dutch SyRI system has been banned by court, due to human rights violations in the profiling of welfare recipients, and the UK has found errors in the automated processes leading to financial hardship among citizens. In the United States and Canada, automated systems led to false underpayment or denial of benefits. A recent UN report (2019) even warns that countries are ‘stumbling zombie-like into a digital welfare dystopia’. Further, studies raise alarm that this process of digitalization is done in a way that it not only creates excessive information asymmetry among government and citizens, but also disadvantages certain groups more than others.
A closer look at the Dutch Childcare Allowance case highlights this. In this example, low-income parents were regarded as fraudsters by the Tax Authorities if they had incorrectly filled out any documents. An automated and algorithm-based procedure then also singled out dual-nationality families. The victims lost their allowance without having been given any reasons. Even worse, benefits already received were reclaimed. This led to individual hardship, where financial troubles and the categorization as a fraudster by government led for citizens to a chain of events from unpaid healthcare insurance and the inability to visit a doctor to job loss, potential home loss and mental health concerns (Volkskrant 2020)….(More)”.