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In Northern Ireland 129 families were initially flagged as having left the country, but only 28 actually had done so. Photo by Press Eye
A UK government anti-benefit fraud scheme that wrongly cut off Child Benefit payments to hundreds of families in Northern Ireland may amount to “unlawful discrimination,” legal experts have warned.
Figures obtained by The Detail show that Home Office travel data used in an HMRC pilot scheme incorrectly indicated that families had emigrated from Northern Ireland in nearly 80% of cases.
Law Centre NI, a leading legal advice charity, said that “suspending Child Benefit without adequate evidence” was “arguably unlawful.” The organisation warned that the disproportionate impact on Northern Ireland residents could also amount to “unlawful discrimination.”
Serious concerns have emerged in recent weeks after families in Northern Ireland - and thousands more across Britain - had their Child Benefit payments suspended based on flawed Home Office travel records.
The data was used in an HMRC anti-fraud initiative designed to detect families who had allegedly left the UK. However, the pilot results revealed major errors in data used in the system.
In Northern Ireland - where families frequently travel via Dublin and the open border complicates travel data - 129 families were initially flagged as having left the country, but only 28 actually had done so.
Across the UK, 43% of families in the pilot were incorrectly suspected of fraud due to faulty Home Office records.
Despite these statistics, the scheme was rolled out in September. Since then, 346 families in Northern Ireland and 23,456 in Britain have had their Child Benefit payments suspended.
Based on pilot error rates, that could mean around 270 families in Northern Ireland and more than 10,000 in Britain have been affected incorrectly.
Families caught up in the scheme say the experience has been distressing and invasive.
Maria* flew out of Belfast and returned via Dublin Airport after a short family holiday earlier this year. Because there are no UK passport checks on the land border, the Home Office had no record of her return and marked her as having moved abroad.
Last month she received an HMRC letter informing her that her Child Benefit had been suspended and asking her to complete a 12-page form, including three months of bank statements, letters from her child’s school, and hospital records.
“I felt like I was literally in a Kafkaesque process,” said Maria, who asked us not to use her real name.
Other Belfast families who travelled to England via Dublin Airport for a cheaper holiday faced similar problems. The Home Office data showed them leaving the UK for Ireland and wrongly flagged them as having emigrated.
Data
Dáire Hughes, Sinn Féin MP for Newry and Armagh, who is representing 14 families, said the high error rates were “a staggering failure which has caused huge amounts of undue stress to people who have done nothing wrong.”
“These figures demonstrate what we have said from the outset. The British government is oblivious to the realities of life in the north of Ireland,” he added.
Following reports by The Detail and The Guardian, HMRC has apologised, introduced additional checks, and reinstated payments for some affected families.
The agency said that PAYE checks were mistakenly removed from the scheme after the pilot but will now be reinstated.
However, this change will still leave many families wrongly classified as having emigrated.
During the pilot, PAYE checks failed to identify more than two-thirds of the families who remained in the UK, including those who were self-employed or receiving other benefits.
“We’re very sorry to those whose payments have been suspended incorrectly. We have taken immediate action to update the process, giving customers one month to respond before payments are suspended,” a HMRC spokesman said.
“We remain committed to protecting taxpayers’ money and are confident that the majority of suspensions are accurate.”
The agency said it will no longer use data from flights between Great Britain and Dublin to infer that a family has moved abroad. However, families who fly out of Belfast but return via Dublin may still be flagged as having emigrated.
Advice NI, which is funded by HMRC to provide independent tax and benefit advice, said it received no advance warning of the new anti-fraud checks.
“Despite our role as an independent advice service which engages directly with HMRC on an operational and strategic level on tax and benefit matters, we had not been apprised of this policy change in advance.
“Had this occurred, we would have been able to inform HMRC about the risk of an unfair impact on Northern Ireland-based claimants.”
The group has urged affected families to contact its helpline for assistance.
Experts have also said the case exposes the risks of using incomplete or inaccurate government data for punitive decisions.
“Relying on Home Office data for punitive purposes is always going to be problematic,” said Colin Yeo, an immigration barrister at Garden Court Chambers.
“If you are trying to design a policy that relies on exit checks, and you don’t actually have exit checks, and instead you use circumstantial data that points to but isn’t probative of something, then you’ve got a problem there,” he said.
MPs from parties including Sinn Féin, the SDLP and the Liberal Democrats have raised concerns with HMRC and the Northern Ireland Office in recent weeks.
Meg Hillier, a Labour MP and chair of the House of Commons Treasury select committee, has written to the permanent secretary of HMRC asking who made the decisions, why they were made and whether compensation would be offered to the victims.