Payouts to kids abused in state care soars as claims spike

Victorian spending on payouts for kids harmed in residential and foster care is set to skyrocket by more than $100 million, government documents reveal.

Government spending on child abuse payouts for kids harmed in their care is set to skyrocket, as the number of claims soar.

The cost of managing and settling compensation with Victorians who were wards of the state - removed from abusive or traumatic homes and placed under the legal guardianship of the government - is set to triple in the next financial year, shocking new budget figures have revealed.

The Allan government has set aside an extra $132.6m to manage the coming financial year’s historical abuse claims, with funding spiking from $65.8m in 2024-2025 to $198.4m.

Multiple whistleblowers, including former wards of the state and child protection workers, have detailed the horrific abuse suffered by children in state care.

Incidents range from children and teens engaging in sex work, rampant drug use in residential care houses, much older men preying on kids and sexually assaulting them, fellow residents sexually assaulting one another and young kids engaging in inappropriate sexual relationships with one another.

Sources say the rampant abuse is a well-known “open secret” in the child protection sector and police, with many assaults reported to case managers and local investigators.

That blowout is in addition to the department’s redress scheme, which began awarding $20,000 payments and apologies to wards of the state earlier this month.

Les Twentyman Foundation chief executive Paul Burke said the troubled state care system was driving vulnerable children to crime, prostitution and drug abuse when it was supposed to be protecting them.

“They say it takes a village to raise a child, in Victoria our village is failing these children and that must change,” he said.

“As a community we need to do more, finding loving and caring homes for these young people where possible and ensuring these kids remain connected positively to the community, not feeling as though they have been forgotten.”

It is not known how many claims the Victorian Families, Fairness and Housing Department expects to split the $198.4m between, but previous compensation cases have surpassed $2 million.

In a 2023 case, a Melbourne woman was awarded $2.6 million — plus costs — from the state government and foster care agencies OzChild and UnitingVic.Tas after she was placed with a foster family who was sexually, physically and emotionally abusive.

Data from the Australian Institute of Health and Welfare shows, at a national level, about 1200 children were subject to a “substantiated” case of abuse in care in 2022-2023.

The spike in payouts amid ongoing concerns about the conditions of the state’s foster and residential care system, with a Herald Sun investigation exposing major flaws across child protection after a 12-year-old ward of the state killed a 37-year-old woman in Footscray in 2023.

The series uncovered a litany of violent incidents, such as a 14-year-old girl stabbing a caseworker with a meat carver, children being left unsupervised for hours on end and going hungry without access to edible food.

A government spokeswoman said: “No amount of money can ever undo or make up for what happened, but we can acknowledge the wrongs of the past and support people to address the impacts of abuse and neglect on their lives”.