The Turnbull Government will introduce integrity measures expected to prevent $250 million being paid to dodgy Family Day Care providers in the latest compliance measure to protect taxpayers, families and most importantly children in child care.
Minister for Education and Training Simon Birmingham said this week the Turnbull Government would table measures to set new maximum rates and age limits for children accessing child care fee assistance in family day care (FDC) services.
Minister Birmingham said the latest clamp down came on top of the Coalition Government’s strong and decisive action to close various loopholes and that had prevented $945 million being paid to dodgy child care providers over the past three years.
“These new measures strike the sensible balance between a need to stamp out unscrupulous family day care providers but importantly safeguards the legitimate operators and the families who depend on them,” Minister Birmingham said.
"They will provide much tighter controls on who cares for our children. It is not good enough that existing rules have been able to be ‘worked around’ and we will put a stop to millions and millions of bad money going out the door.”
Minister Birmingham said following a number of recent cases that have seen the Grandparent Child Care Benefit (GCCB) and Special Child Care Benefit (SCCB) rorted the first of the Turnbull Government’s measures would apply a maximum hourly rate of $12.67 to the two benefits and if a family day care service charges above this rate, the care will be ineligible for fee assistance
“At the beginning of 2015 the Government’s expenditure on GCCB was under $10 million and by September last year is had ballooned to nearly $40 million,” Minister Birmingham said.
“This move of dodgy FDC providers to rort the two benefits follows the Turnbull Government’s decision to clamp down and prevent ‘child swapping’ in 2015 – a decision that prevented $421 million going out the door to shonks.
“In some areas FDC services are charging the Commonwealth more than three times their normal fees for this care that is wholly paid for by the taxpayer and is intended to support grandparents who have primary care of their grandchildren.
"There is clearly no justification for billing taxpayers three times the cost of providing care to a child whose primary carer is their grandparent than is being charged for care of a child whose primary carer is their mum or dad.
“Setting a maximum hourly rate will act as a deterrent to family day care services and stop them charging exorbitant fees where there is not a genuine liability and, I would expect, it will push a number of the rorters out of the system all together.”
Minister Birmingham said the Government would also prohibit child care fee assistance in the FDC sector for children aged 14 years or older, or children who attend secondary school.
“This measure has been carefully targeted at those who deliberately rort the system and to ensure legitimate family day care providers do not get caught up and penalised, including exceptions for children with a disability and those living in remote areas,” Minister Birmingham said.
“FDC providers claiming for children in this age group claim, on average, 10 hours more family day care per week than younger children, with the vast majority provided by services considered to be at high risk of non-compliance. Put simply, the authenticity of these claims fail a most basic sniff test.”
Minister Birmingham said the Turnbull Government would not “sit on its hands” and was further strengthening compliance measures for Family Day Care as part of its child care reform package currently before Parliament.
“The perpetrators of fraud are on notice and the Turnbull Government is determined to break your dodgy business models. There is no place for you in the child care system. The Government is targeting you and you will be caught.”
“In the past three years the Coalition Government has stopped almost $1 billion of taxpayer money going out the door to rorters and shonks and our child care reforms currently before the Parliament will include a range of new compliance measures, including the power to pause childcare service applications for fee assistance.
“Labor continues to stand in the way of additional compliance measures to return integrity to the Family Day Care system and prevent payments being made to dodgy child care providers. By blocking our child care reforms Labor are letting down millions of hardworking Australian families while propping up the shonks.”
Minister Birmingham said the Turnbull Government had over the past two years brought forward powers for the compulsory reporting of specified action including police action against staff members as well as ensuring subsidy claims are not being made for care provided by parents, siblings or, in the case of Family Day Care, in a child's home or that is solely transport.
“This tough stance is necessary as families rightly expect that not only do child care staff have rigorous checks and balances but that their taxpayer dollars are directed to those operators doing the right thing and delivering high quality, flexible and affordable child care to families and not those ‘shonky’ providers offering sub-standard or illusionary services,” Minister Birmingham said.
“Good and legitimate family day care providers offer valuable services for communities, especially where other forms of child care have limited availability but too often the sector has been a hotbed for shonks and rorters. We recognise that family day care is an important part of the mix of services that make up child care in Australia but rorters or perpetrators of fraud are on notice: you will be caught and there are severe consequences, including the possibility of jail time.”
Minister Birmingham said the Coalition had increased the number of compliance checks, from just 523 under the previous Labor Government in 2012-13 to 3,100 in 2015-16.
These new measures will come into effect on 13 March this year.