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Welfare Fraud Crackdown


31 March 2015 at 11:35 am
Xavier Smerdon
The Federal Government has put child care service providers on notice after a team from the Australian Federal Police-led multi-agency Fraud and Anti-Corruption Centre (FACC) moved on a suspected racket known as ‘child-swapping rorts’ in the family day care industry.

Xavier Smerdon | 31 March 2015 at 11:35 am


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Welfare Fraud Crackdown
31 March 2015 at 11:35 am

The Federal Government has put child care service providers on notice after a team from the Australian Federal Police-led multi-agency Fraud and Anti-Corruption Centre (FACC) moved on a suspected racket known as ‘child-swapping rorts’ in the family day care industry.

Investigators from the FACC team – including AFP, Department of Social Services (DSS) and Department of Human Services (DHS) – were called in when anomalies exceeding $3 million were identified in Government benefit payments to a family day care provider.

The Government has revealed that a number of search warrants were executed in the Albury-Wodonga areas and a 27-year-old woman was arrested charged with three counts of Obtaining a Financial Benefit By Deception contrary to Section 134.2 of the Criminal Code 1995 (Cth).

AFP officers held cash and property worth $2.2 million, which includes cash to the value of approximately $2.1 million and a vehicle worth approximately $90,000.

Federal Minister for Social Services, Scott Morrison said every year taxpayers spend around $7 billion on child care assistance to Australian families to help them access quality and affordable childcare.

“I am advised (the) charges surround alleged rorting of the Special Child Care Benefit  subsidies that pay up to the full cost of a child at risk of serious abuse or neglect, or where the child’s family is experiencing temporary financial hardship,” Morrison said.

“My Department will continue to crack down on non-compliance through random checks, forensic data analysis, suspicious claims investigations and other measures.

“Child care services are on notice – since 1 July 2014 to end February 2015, the government’s Child Care Payment Compliance Teams have suspended, cancelled, placed restrictions on others and instigated fines from 39 child care services.  About $10 million of recoveries have been made.

“The Coalition Government’s increased focus on compliance has, up to the end of September 2014, already prevented an estimated $70 million to $90 million in fraudulent claims by nearly 60 family day care services.

“This is a good start and one that will be built upon with the delivery of a compliance package the Government is currently developing to address ‘child-swapping’ rorts in family day care. This will help ensure those who try to cheat the system are caught.”

Federal Minister for Human Services, Senator Marise Payne said data-matching between DHS and DSS revealed anomalies that led to the charges.

“This ongoing data-matching program identifies people in the family day care sector who have not declared their income to the department while claiming welfare,” Senator Payne said.

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

The peak association for the child care sector, Family Day Care Australia, says it unequivocally supports compliance activity that “effectively eradicates unscrupulous operators” from using family day care as a vehicle for fraudulent behaviour.

“There is no place for this behaviour in our sector and we actively support the push towards increased compliance within the early childhood education and care sector,” a spokesperson from Family Day Care Australia said.

“Family Day Care Australia is currently working closely with the Australian Government on this issue by providing informed input on better regulatory and compliance solutions.

“It is important to note that family day care is an approved and regulated form of early childhood education and care and has been an integral part of the child care landscape in Australia for more than 40 years and the actions of some should not tarnish the wider sector.

“Today the sector provides more than 104,000 Australian families with access to an affordable, flexible and high quality early childhood education and care option.”


Xavier Smerdon  |  Journalist  |  @XavierSmerdon

Xavier Smerdon is a journalist specialising in the Not for Profit sector. He writes breaking and investigative news articles.

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