The Dutch government has stepped down after thousands of families were wrongly accused of child welfare fraud and told to pay money back.

Families suffered an "unparalleled wrong", MPs decided, with tax officials, politicians, judges and civil servants leaving them powerless.

Many of those affected were from an immigrant background and hundreds were plunged into financial difficulty.

PM Mark Rutte submitted the cabinet's resignation to the king.

"Innocent people have been criminalised and their lives ruined," he then told reporters, adding that responsibility for what had gone wrong lay with the cabinet. "The buck stops here."

You're a single mother with three children aged eight to 11. You hit rock-bottom financially and think what now? My children and I sometimes had to go to bed without food

Dulce Gonçalves Tavares
Told in 2013 she had to pay back €125,000

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The "unanimous" decision, taken at a cabinet meeting in The Hague, comes at a key moment in the Covid-19 pandemic.

The Netherlands has gone into lockdown and ministers have been considering stiffer measures to halt the spread of infection.

The government will stay on in a caretaker role to tackle the pandemic until parliamentary elections in March but Economics Minister Eric Wiebes has quit with immediate effect for his role in the scandal. Asked whether the cabinet's resignation was merely symbolic, Mr Rutte was adamant that it was not.

You're a single mother with three children aged eight to 11. You hit rock-bottom financially and think what now? My children and I sometimes had to go to bed without food

Dulce Gonçalves Tavares
Told in 2013 she had to pay back €125,000

1px transparent line

The "unanimous" decision, taken at a cabinet meeting in The Hague, comes at a key moment in the Covid-19 pandemic.

The Netherlands has gone into lockdown and ministers have been considering stiffer measures to halt the spread of infection.

The government will stay on in a caretaker role to tackle the pandemic until parliamentary elections in March but Economics Minister Eric Wiebes has quit with immediate effect for his role in the scandal. Asked whether the cabinet's resignation was merely symbolic, Mr Rutte was adamant that it was not.

This is not the first time a Dutch government has resigned en masse in a gesture of collective responsibility. In 2002, the cabinet stood down after a report criticised ministers and the military for failing to prevent the massacre of Muslims at Srebrenica during the Bosnian war seven years earlier.

What went wrong?
Analysis box by Anna Holligan, Hague correspondent

Parents were branded fraudsters over minor errors such as missing signatures on paperwork, and erroneously forced to pay back tens of thousands of euros given by the government to offset the cost of childcare, with no means of redress. They were, as one junior minister who resigned in connection with the scandal put it, "steamrolled" by the system.

Families were left in a state of ruin, by a state apparatus that became "the enemy of the people".

Relationships disintegrated under the pressure, homes were lost, mothers have spoken tearfully of the financial and psychological anguish they suffered after being targeted by tax officials.

Last year the tax office admitted that 11,000 people were subjected to extra scrutiny simply because they had dual nationality. This confession has reinforced the widely held belief among many ethnic minorities in the Netherlands that discrimination against them is institutionalised and perpetuated by those in power.

But while being seen as the responsible, honourable response - sacrificing power in an admission of government failure - the mass resignation could be interpreted as an act of self-preservation by the Rutte government that avoids the prospect of losing a no-confidence vote by MPs next week.

Read Anna's report on Covid vaccinations in the Netherlands: Shocked to be Europe's vaccination stragglers
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What the wrongly accused parents say

The scandal began in 2012 and the number of parents involved could be as high as 26,000. Some openly called for the government to step down, saying they had lost faith in the ability of the cabinet to clean up the system.

One mother faced demands to pay tax authorities around €48,000 (£42,000). She tried to explain to the authorities that mistakes had been made but officials then started withholding not just childcare allowances but other benefits too.

Her rent went into arrears and energy companies refused to provide a regular supply. Eventually she lost her job and could not find another as she was seen as a fraudster. Her relationship with her child broke down as the pressure took its toll.

"Rutte says he thinks it's terrible, but he's not the one who had to pay up... This shouldn't happen in the Netherlands - I've been labelled a fraudster," another mother, Nazan Aydin, told NOS.
What happens next?

Mr Rutte's liberal VVD party is performing well in the opinion polls, so the 17 March election could see another Rutte-led administration. He has already led three governments since 2010.

Although he initially opposed the cabinet's resignation, it was seen as inevitable once the opposition Labour leader Lodewijk Asscher resigned on Thursday in response to the scandal. Mr Asscher was social affairs minister under the previous Rutte coalition government.

Mr Rutte heads a four-party centre-right-liberal coalition and his party leads the latest opinion polls, ahead of far-right leader Geert Wilders.

However, victims of the childcare allowance scandal who had to repay large sums paid out in benefit have this week filed a formal complaint against several current and former ministers.

Compensation to the tune of at least €30,000 (£26,000) each is to be paid out to parents who were wrongly accused, but many have argued it is not enough.

Ahead of the government's decision to step down, Sigrid Kaag, the leader of the liberal D66 party said it was "important to be politically accountable and to take responsibility for the content of the report and for the injustice done to the parents".

State Secretary for Finance Alexandra van Huffelen said children caught up in the fraud scandal should also be looked after so they could "soon move on".