Childcare crackdown: Hunt for parents rorting $283m from the family daycare system

DODGY family daycare operators are ripping off taxpayers to the tune of $283 million in a “ghost’’ childcare scam.

The government is set to crack down on parents receiving payments for family daycare provided to their child on the same day that they themselves provide family daycare.

DODGY family daycare operators are ripping off taxpayers to the tune of $283 million in a “ghost’’ childcare scam.

The Sunday Telegraph can reveal that a crackdown on suburban mums and their partners ripping off the system has uncovered hundreds of millions of dollars in non-compliant claims.

But the federal government’s attempt to crack down on the rort by banning the practice faces a roadblock in the Senate this week, where the Greens are pushing to delay the new rules.

Child swapping is a practice where a family daycare educator, or their partner, receives payments for family daycare provided to their child on the same day that they themselves provide family daycare.

In some extreme cases large-scale child swapping has ­occurred, with operators maximising their income by claiming childcare payments for their ­employees’ children being looked after by other family daycare educators.

However, no childcare was­ ­ever provided.

New figures reveal that an investigation has resulted in operators being hit with $21 million in fines and sanctions in the past year.

About 2900 family daycare providers were targeted, with 51 centres found to be breaking the rules.

The estimated financial ­impact of targeted compliance activity aimed at 240 high-risk family daycare services was up to $283 million in 12 months.

More than 50 family daycare services were hit with $6.2 million issued in fines. But only $15.1 million of the total $21 million was recovered.

Education Minister Simon Birmingham said the government is cracking down on the suspected childcare fraud.

Education Minister Simon Birmingham said the changes would ensure that anyone who is providing family daycare would not be able to claim ­financial benefits for their own child receiving care on that day.

“I am mindful that there are a number of people who are unwittingly caught up in this, having been exploited by dodgy providers,’’ Mr Birmingham said.

“I am also aware that there are many professional family daycare services and educators who want to see this bad practice stamped out in order to protect the integrity of their sector.

“However the Government must respond to the hundreds of millions of dollars worth of suspected fraud and noncompliant behaviour that it is uncovering.

“These family day care services were designed to support parents who wanted to care for their own children, in their own home while earning a small income — it was not envisaged that this opportunity would ultimately rip millions of dollars off of Australian parents and taxpayers.’’

Mr Birmingham said the new compliance measures mean that anyone who is providing family day care education services will not be able to claim child care support for their own children when they are being cared for by another family day care operator, on the same day.

“I do acknowledge that there are special circumstances like disability or remoteness that still need to be protected under this measure and they will be,’’ Mr Birmingham said.

The Productivity Commission’s childcare review has previously received anonymous complaints claiming that women were swapping children to claim Child Care Benefit and childcare rebate.

‘Many of them earn between $2000-$7000 a fortnight,’’ the complaint stated.

‘They can even complicate it by having three or four ladies swapping their children.’’

Last month, the Turnbull Government’s changes that closed the loophole took effect.

It followed an Australian National Audit Office report that found $300 million of child care payments were incorrect and the vast majority related to family day care.

The Turnbull Government estimates the crackdown will save taxpayers nearly $1 billion over the forward estimates $930 million in reduced Child Care Benefit and Child Care Rebate payments.