Media Release by The Hon Scott Morrison MP

Coalition has no tolerance for fraud in welfare system

Joint Media Release with:

  • The Hon. Michael Keenan MP Minister for Justice and Senator The Hon. Marise Payne MP Minister for Human Services

Childcare service providers are on notice that the Coalition Government will not tolerate fraud in the family day care sector, or by any other type of service that delivers approved government-subsidised childcare.

The warning comes after a team from the AFP-led multi-agency Fraud and Anti-Corruption Centre (FACC) moved on a suspected racket 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.

A number of search warrants were executed in the Albury-Wodonga areas today, 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 restrained cash and property of $2.2 million, which includes cash to the value of approximately $2.1 million and a vehicle worth approximately $90,000.

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

“It is crucial this assistance is not taken advantage of,” Mr Morrison said.

“I am advised today’s 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.

“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,” Minister Morrison said.

Minister for Justice Michael Keenan said the FACC, formally established by the Coalition Government last year and led by the AFP, further enhances the Commonwealth’s ability to prevent and respond to serious fraud and corruption.

“The FACC has been located and resourced within the AFP and marks a new era of unprecedented co-operation between federal agencies to detect and disrupt serious fraud and corruption,” Mr Keenan said.

“The centre has been designed to triage and evaluate serious and complex fraud and corruption referrals to deliver an effective Commonwealth multi-agency response when serious concerns are raised.”

Minister for Human Services Senator the Hon Marise Payne said data-matching between DHS and DSS revealed anomalies that led to today’s 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.

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