Tighter rules to stop child care payment rorting

Media Release
  • Assistant Minister for Education

The Abbott Government is taking decisive action to tighten child care payment laws to stop dodgy family day care services exploiting “legislative loopholes” that are costing taxpayers millions.

Assistant Minister for Education Sussan Ley announced today the Government’s plan to make changes to Commonwealth Family Assistance Law as part of its tougher stance on child care payment compliance.

Ms Ley said the changes were necessary as existing laws had failed to keep pace with the rapid growth of the family day care sector, which had almost doubled in size since 2012.

Ms Ley said a classic example was “child-swapping”, where home-based educators can currently care for each other’s children in order to deliberately claim Commonwealth child care payments for their own children.

“There is no doubt many family day care services are in it for the right reasons – namely the high-quality education and care of our children,” Ms Ley said.

“However, our current child care payment crackdown has made it increasingly clear that family day care’s rapid growth has also attracted unscrupulous operators trying to cash-in.

“We have specific examples of family day care services claiming millions of dollars in taxpayer-funded child care payments and yet up to a third of these services’ income comes directly from their educators swapping their own children. You can’t tell me that’s not an abuse of the rules.

“It’s not like we’re talking about child care being provided to support working parents or to educate our kids – let’s call a spade a spade – this is rorting of taxpayer dollars.

“It’s not right and it’s a slap in the face to the thousands of parents across the country struggling to access affordable child care.

“This Government is committed to taking child care payment compliance seriously and these changes will further bolster the work our dedicated taskforce is already doing.”

Ms Ley said about 90 per cent of the suspensions, sanctions and fines issued since the Abbott Government launched its child care payment compliance taskforce were against family day care, however loopholes allowing dodgy practices within existing rules meant more had to be done.

Family day care differs from most other types of child care as it involves a coordination service managing a network of home-based educators caring for children. This has led to issues with the policing of current child care payment laws, which were developed prior to the sector’s rapid growth in size and geographic spread, with a growing number of services now managing hundreds of home-based educators across multiple states after just a couple of years in business.

“That’s why, in addition to increased compliance, we need stronger rules that recognise the unique child care model family day care provides, but also ensure we protect parents, taxpayers and the sector as a whole and weed out those dodgy services doing the wrong thing,” Ms Ley said.

“It will help ensure the $31 billion the Abbott Government is investing in child care over the next four years goes towards making child care more affordable for Australian families, not lining the pockets of dodgy services.”

Ms Ley said that in addition to banning child-swapping, other proposed changes to Commonwealth Family Assistance Law included:

  • Improving transparency in payment claims made by family day care services by ensuring sessions of care being claimed are clearly attributed to the individual educator delivering them.

  • Ensuring the Commonwealth has the power to enforce sanctions and approval conditions already imposed on services by state and territory regulations.

  • Preventing family day care services from operating across multiple states and territories without the relevant approvals and compliance checks in each state and territory.

Ms Ley said the Government intended to introduce the changes via a legislative instrument, expected to be tabled in Parliament this week.

Ms Ley said the Government had consulted with family day care peak bodies and state regulators and secured broad support for the measures. Family day care services have also been notified.

“This is just one part of our vision to build a stronger, more-sustainable family day care sector for the long-term and we will continue to consult closely with relevant stakeholders.”

Ms Ley said the changes would come into effect immediately for all new family day care services, with transition periods of up to six months for existing services, depending on the measure.

Full details of the proposed changes can be found at www.education.gov.au. Ms Ley said anyone with information about dodgy child care practices should report them to the Government’s tip off line by calling 1800 664 231 or emailing tipoffline@education.gov.au.

 

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