Child Care Subsidy Fraud

Child Care Subsidy Fraud

Fraud — Authorities urge parents to help stop child care subsidy fraud

With recent arrests and seizures by the Australian Federal Police and Child Care Compliance Taskforce, parents and educators alike are being urged to help stop child care subsidy fraud by reporting any individuals, services or coordination units that are not operating in a law-abiding way.

Social Services Minister Scott Morrison recently announced a $250 million package for low to middle-income families that subsidises nannies for shift workers or those who work irregular hours.

The Activity Test which is being introduced alongside the new one payment child care subsidy has been designed to minimise welfare fraud, tests for which will also be rolled out to reduce the number of fraudulent child care claims.

Parents on welfare will likely be asked to prove they are working or studying before they can receive government child care subsidies and all parents claiming under a new 'activity test'.

This may seem a little harsh but sadly child care benefit fraud is big business.

In what is thought to be the tip of the iceberg, the new Child Care Compliance Taskforce, which was set up in July last year, based in the federal Education Department, has already uncovered 24 child care providers in an investigation resulting in 256 fines totalling $1.74 million and some operations being restricted or suspended.

These include:

  • A 27-year-old childcare director from Albury-Wodonga, who has also recently been convicted of fraudulently receiving more than $3 million worth of child care subsidies meant to fund care for children who are abused, neglected or disadvantaged.
  • A family day care coordinating service in Melbourne's western suburbs, which had 226 educators working across NSW, ACT, South Australia and Victoria, and was found to be charging low income parents studying or training and in receipt of Jobs Education Training Child Care Fee Assistance (JETCCFA) almost double the normal fee.
  • A Brisbane service, which has been fined $100,000 after it was found to be overcharging parents receiving the Grandparents Child Care Benefit.
  • And 13 Family Day Care (FDC) services that had upwards of 500 more educators on their books than the legal limit.

Child care fraud is very lucrative and rife in some areas of the country. It has to be stamped out, because it unfairly casts a shadow not only over individuals, but also over the child care industry, particularly family day care operations, when the majority of centres are operating in a wholly honest fashion.

Most of the rorting appears to be around fees charged by co-ordination units, whether to the government or parents. These units - rather than individual educators – are legally responsible for setting child care fees and for monitoring enrolments, hours of care and attendance.

AFP Fraud and Anti-Corruption Centre manager Linda Champion said: "Investigations like this send a clear message to anyone who is thinking of engaging in this type of [alleged] criminal activity – collectively we have proven our ability to investigate and take action…"

General Manager DHS, Hank Jongen said fraud would not be tolerated and that people thinking about committing child care fraud should think again.

"It is only a matter of time before we catch up with them, and when we do, we will make sure they are dealt with in the courts."

Child care benefit fraud includes "phantom claims", where taxpayer funds were claimed for non-existent children and "child swapping", where groups of parents become accredited as childcare providers and fraudulently claim to have looked after each others' children in order to receive benefits.

A Family Day Care Australia (FDCA) spokeswoman said the organisation did not believe there should be tighter rules governing the fees coordination services charged educators in order that the sector maintain its flexibility to operate in line with the specific needs of its families and communities.

"We must emphasise that the vast majority of family day care service providers and educators are doing the right thing," the spokeswoman said.

The administration of child care assistance and the licensing and assessment of family day care service providers is the responsibility of the state and federal authorities.

If you think there's something suspect about one of your local child care providers, it's important to report the matter. These people are costing the country, and taxpayers, millions in fraudulent claims. Contact the Department of Education's tip-off line on 1800 664 231 or email tipoffline@education.gov.au