Victorian family day care cheats caught in $23 million scam

OFFICIALS have uncovered a $23 million welfare fraud in the family day care sector, operating mainly out of Victoria.

N16mpbaby baby crawling for front page story about child care centres. Pic: ThinkStock

OFFICIALS have uncovered a $23 million welfare fraud in the family day care sector, operating mainly out of Victoria.

The Department of Human Services discovered 575 people — 502 from Victoria — working as family day care educators but failing to declare their income, while at the same time claiming social security.

The fraud was uncovered when the department investigated after tip-offs, and compared its data with data from the Department of Education.

Another 43 rorters were uncovered in South Australia, 22 in New South Wales, and a handful elsewhere.

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Human Services Minister Marise Payne said it was clear there were both individuals and organised groups trying to cheat the system.

“In several cases, (rorters) are using the same accountants to both hide income and claim exorbitant expenses under the guise of providing care for children,’’ she said.

Family day care operators nationally will now be subject to tighter government checks.

Senator Payne said the data-matching between the departments would now become a permanent part of welfare compliance checks.

A further 10,000 records will now be cross-checked.

The average debt owed to the Commonwealth by individual frauds in the sector is $40,000. But one person owes $416,000, and 51 owe more than $100,000.

No criminal charges have yet been laid, but inquiries are continuing.

Senator Payne said the investigation to catch cheats had followed previous efforts by the department to uncover others who failed to declare their income from the fruit-picking and taxi industries and from online businesses.

She noted while most welfare recipients were honest, people should know that deliberate attempts to defraud the system would not be tolerated.

“It is a criminal offence to gain a financial advantage by intentionally withholding information about your circumstances,” she said.

“If you deliberately defraud the Commonwealth, it is only a matter of time before you are caught and face serious consequences, including possible jail time.”

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