Internal documents show that HM Revenue and Customs (HMRC) accepted a 'tolerable' risk of harm when it suspended child benefit payments without warning families as part of an anti-fraud drive. The tax authority deemed the chance of inflicting harm 'remote', despite evidence from a pilot scheme showing travel data was wrong in 46% of cases.
At least 63% of those whose benefits were stopped between July and October were still living in the UK, according to Home Office data used in the crackdown. Of nearly 24,000 accounts suspended, only 1,019 (4.3%) were found to involve incorrect claims, while 15,000 were confirmed as legitimate. Thousands of cases remain unresolved.
During the pilot, more than a third of those investigated for suspected fraud were found to be legitimate. Yet in the wider rollout, checks against PAYE records were removed to 'streamline' the process, contributing to widespread errors. Officials believed the 'severity of harm' was 'minimal' and that errors could be corrected through appeals.
Families affected include a woman whose benefit was stopped after travelling to France to collect her husband's remains, and a parent who went to Dublin for a funeral. Another had benefits suspended despite a holiday being abandoned due to a child's epileptic seizure. In one case, a parent in intensive care with sepsis was flagged for emigration after a flight booking to Italy.
Data protection impact assessment documents concluded there was no need to contact parents before suspending payments. The Open Rights Group said the assessment was 'conducted poorly'. HMRC senior officials are due to be questioned by the Treasury select committee on Tuesday over the episode, which the committee said appeared 'cavalier with people's finances'.
