Blitz on dodgy daycare operators saves $3bn

The government has stopped almost $3 billion going to dodgy family daycare operators since 2014.

“Our crackdown on fraud and non-compliance in the child care sector has stopped about $2.8bn of taxpayers’ money being ripped off”— Education Minister Dan Tehan.

The federal government has stopped almost $3 billion in taxpayer money going to fraudulent and dodgy family daycare operators since 2014, with new figures showing hundreds of millions more have been saved since June.

Education Minister Dan Tehan told The Australian there have been 155 sanctions, suspensions and cancellations imposed on 144 childcare providers in the nine months to September.

Before the Coalition came to power, the commonwealth had already lost what it estimates to be about $2 billion to family daycare businesses that flooded the market and exploited loopholes in national legislation that allowed them to “swap” children and claim lucrative taxpayer subsidies for the care of relatives and friends.

In subsequent frauds uncovered by authorities, it emerged some family daycare providers were doctoring child attendance records and dishonestly classifying children in their care as being from disadvantaged backgrounds, which attracts a generous loading on top of the original subsidy.

“We have closed loopholes, stepped up inspections and are working more closely with security agencies to protect the integrity of the childcare system,” Mr Tehan said. “Our crackdown on fraud and non-compliance in the child care sector has stopped about $2.8bn of taxpayers’ money being ripped off.”

Mr Tehan said 27 people had been charged with criminal offences for childcare fraud. Nineteen of those have been found guilty since January 2014.

One service in western Sydney, which had its subsidies cancelled in February, is alleged to have been paid $5.4 million in government fees in just 14 days, more than half of which was transferred to ­another account.

Melissa Higgins, of the NSW border city of Albury, was found guilty of a $3.6m fraud involving a similar scheme in November 2016 after investigations into her family daycare business.

In the two years to June 2013, there were no cancellations and only two fines issued.

The former Labor government carried out only 423 compliance checks in its last year in power. In the last ­financial year, the federal Department of Education conducted 4500 compliance checks.

The Australian has previously revealed evidence that family daycare operators stung by service cancellations or suspensions have, in some cases, moved on to other buckets of government money.

A man accused of stealing more than $480,000 from the National Disability Insurance Scheme has links with a company that had its family daycare taxpayer subsidies cut off last year for obtaining payments “by fraud”, according to a government register.

Mohamed Osman Omar, 36, appeared in Melbourne Magistrates Court charged with defrauding the commonwealth in October He was also director of Langmann Pty Ltd, which operated a daycare service closed by the government in September last year. Although Mr Omar rescinded his directorship of that company effective in 2015, he did not do so until May 16 this year, the court heard.,