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Over 15,000 families have had their child benefit payments incorrectly suspended. Photo by Jeremy Segrott
An assessment carried out before HMRC incorrectly stripped child benefit payments from thousands of families suggested that the risk of such errors was "remote" and “tolerable”.
The revelations come just weeks after The Detail revealed that at least 63% of those who had their child benefit stopped were living in the UK, and had not emigrated as inferred by incomplete Home Office data used in the crackdown.
HMRC suspended payments for 23,794 families between July and October in an anti-fraud crackdown. Parents received letters referring to past holidays, sometimes as far back as three years ago, for which the Home Office had no record of return journeys.
However, almost 15,000 of those families were found to belegitimate claimants, as of 30 November, while only 1,019 (4.3%) were found to be claiming incorrectly. The number of legitimate claimants is expected to rise, with thousands of cases still unresolved.
The internal HMRC documents, released under Freedom of Information laws, recognised a risk that Home Office data would wrongly flag families as having emigrated, but judged it “remote” and “tolerable”.
This was despite evidence from a pilot of the scheme showing travel data was wrong in 46% of cases. Of those investigated for suspected fraud, more than a third were ultimately found to be legitimate claimants.
In the wider rollout, checks against PAYE records were removed to “streamline” the process, likely increasing the number of families incorrectly identified.
The data protection impact assessment (DPIA) documents show officials also thought the “severity of the harm” was “minimal”, despite families reporting stress and missed payments as they scrambled to provide evidence they had not emigrated.
Officials believed errors could be mitigated through the appeals process.
An investigation by The Detail and the Guardian later exposed the flaws in Home Office data, finding thousands of parents across the UK had their benefits suspended because border systems held no record of their return after trips abroad.
One woman had her benefits stopped after returning from Italy via Dublin, while another lost payments after she was wrongly flagged as failing to return from a trip to Norway that never took place.
A third woman had her benefit stopped after she missed a flight because she was critically ill in intensive care with sepsis.
The documents show officials did not meaningfully question whether Home Office travel data was incomplete in the first place, instead focusing on legal processes around data sharing and the risk of data breaches.
The Home Office itself warns that travel histories “should be interpreted as an intention to travel and not as proof of travel”.
The most recent annual borders inspectorate report, published in September, found Home Office data was “often incomplete, inconsistent, or simply wrong”.
The documents also show officials decided not to consult parents before suspending benefits, stating that existing privacy notices were sufficient.
Mariano delli Santi, legal and policy officer at the Open Rights Group, said this reasoning was flawed: “The purpose of a consultation within a DPIA is not to inform but to gather feedback and identify potential risks.”
“In the case at hand, it is reasonable to assume that some child benefits recipients could have raised questions about, and thus helped identify, obvious issues that have emerged in practice, such as travels via the Dublin airport, or missed flights.”
Advice NI, which is funded by HMRC, said it was not consulted about the pilot or rollout, and only learned of the scheme after being contacted by The Detail. “Had (consultation) occurred, we would have been able to inform HMRC about the risk of an unfair impact on Northern Ireland-based claimants,” a spokesman said.
The documents also outline weekly HMRC meetings “will quickly identify any problematic areas and allow the initiative to be halted / ceased if required.”
However, this does not appear to have happened.
While the scheme rolled out in late July, it was not until The Detail and the Guardian reported on the issue that any changes were made. When asking HMRC about what then appeared to be the problems only for families in Northern Ireland, the press office told The Detail that there were no wider issues identified.
Mr delli Santi, from the Open Rights Group, who has studied the documents said “it is obvious that the DPIA was conducted poorly”.
“The purpose of a consultation within a DPIA is not to inform but to gather feedback and identify potential risks,” he added.
Among the likely benefits of the scheme, the HMRC document stated that the initiative "increases public confidence that ‘government’ takes fraud seriously.”
HMRC bosses are due to be quizzed by the Westminster Treasury select committee tomorrow.
An HMRC spokesman said it took data protection “very seriously”.
Commenting on the new systems put in place after the scandal was exposed, the spokesman said:
“International travel data gives an indication that a customer may no longer be eligible for Child Benefit. We then conduct our own checks and open enquiries where necessary, giving customers at least one month to provide evidence, before making any decisions on eligibility.
“This enables us to tackle error and fraud without asking all Child Benefit customers to regularly confirm their continued eligibility.”