Norway's government on Tuesday issued an apology and pledged to clear up a controversy involving hundreds of people accused of abusing the country's welfare system due to a misinterpretation of EU laws. The government wrongfully ordered its citizens to pay back large sums of money, convicted and even jailed some for having traveled abroad while receiving benefits from Norway’s state welfare agency, NAV. The crisis was dubbed "the biggest legal scandal in Norway's history."

"On behalf of the government I want to apologize to those affected and their families. The state will make amends," said Anniken Hauglie, minister for labor and social affairs, in remarks to parliament. Hauglie said in her statement that 36 people have wrongly served prison terms over benefit fraud convictions linked to a 2012 European Union regulation. She told lawmakers that the government would commission an independent review of NAV.

While Norwegian law forbids traveling abroad while receiving social security benefits without special permission, EU regulations have permitted it in line with the EU’s free movement of goods and services across borders. Norway, as a member of EU’s European Economic Area (EEA) was supposed to follow the EU law, but misinterpreted it for at least seven years. Last week NAV conceded it had wrongly interpreted rules introduced in 2012 on benefit payments to people temporarily residing outside Norway; either in a European Union member state or a country that, like Norway, is part of the European Free Trade Association (EFTA). NAV is in charge of administering social security programs, including pension, child and unemployment benefits. According to Hauglie, at least 2,400 people have wrongly been ordered to repay benefits.

According to local sources, the misinterpretation of the EU law was first discovered in 2017, so it took over two years for the Norwegian government to admit its mistake. The government said it was mulling creating a fast-track complaint mechanism for people who believed they had been mistreated. Jonas Gahr Store, leader of the main opposition Labor Party, urged the government to ensure that benefits "without delay" be repaid to those who were wronged. "Sick, often vulnerable people need restitution," he added. Other members of the opposition said they wanted parliament to appoint a separate commission to review NAV, the ministry and minister Hauglie's actions.