THE federal government is investigating fresh allegations members of some ethnic communities are rorting the family daycare system to pocket generous taxpayer funded subsidies.
News Corp Australia has confirmed the federal Department of Education’s compliance team is investigating claims that “more than 50 families”, mostly in the Somali and Sudanese communities, are swapping children, or just timesheets between families, and falsely reporting their kids are in approved family day care to claim federal government subsidies.
The scam is understood to have originated among communities in Melbourne and the operations are being investigated in all Australian states and territories.
The allegations, initially made in a submission to the Productivity Commission’s childcare inquiry, have now been referred on to the Department of Education for investigation with a spokesperson for the department confirming they have already begun taking action.
Assistant Minister for Education Sussan Ley said the Federal Government was committed to bolstering compliance measures.
“This government has certainly increased active compliance checks to catch anyone doing the wrong thing and deter others from even thinking about it,” she said.
Shadow Minister for Education and Early Childhood, Kate Ellis, said the former Labor government had also investigated fraud and recovered $350,000 in misused funds.
Childcare fraud .. is happening in Australia. Picture: Thinkstock Source: Supplied
“I directed the Department to undertake every possible course of action that was put forward to address this issue, including a targeted education and compliance program,” Ms Ellis said.
The peak body representing the sector, Family Day Care Australia, confirmed it was aware of allegations “of incorrect practice with regard to the processing of child care fee assistance”.
The organisation said it was working with federal authorities to increase awareness around the obligations and responsibilities of service providers.
Melbourne lawyer Tania Mykyta, who specialises in advising childcare providors, said she was aware of a growth in fraud in the sector.
Providers charging high hourly rates and requiring families to say their children are being care for between 7am and 7pm six days a week to claim the maximum benefit. And strange paperwork has seen children based in Perth apparently cared for in Melbourne.
“I just don’t know how these crooks are getting away with it,” Ms Mykyta said.
Government crackdowns are yet to stop the illegal activities, with educators and families moving onto other service providers if they are caught out.
But FDCA’s chief executive Carla Northam said the claims did not indicate widespread wrongdoing.
“It is important to remember that the vast majority of family day care service providers and educators are doing the right thing,” she said.
The Productivity Commission received allegations that some members of small ethnic communities including the Sudanese and Somali communities, would “exchange or swap their children” with each other, and use back channels to get childcare certificates so they could register as childcare educators.
“This system has become open season of this parents,” the submission reads. “I have witness who fraudulently exploit public money.”
“Childcare Certificate III is available to buy without study a single word or sentence for some caregiver who doesn’t read or write or speak English. Parents just bought this Childcare Certificate III and exchange or swap their children each other,” the submission says.
Insider tip offs suggest educators are receiving as much as $22,000 and may not even be swapping children — swapping timesheets is enough to receive payment.
Abdullahi Farah, chairman of the Australian Somali Community Association and family daycare operator, said the Somali community were big users of family daycare but he was unaware of members of the Somali community involved in fraudulent activities.
“I have not seen any illegal activity,” he said.
“There are a lot of checks that occur to make sure people are doing the right thing.”
A spokeswoman for the Productivity Commission said the allegations have been passed onto the department.
“This particular comment that was provided to us online we did refer this to the Commonwealth Department of Education’s Compliance Unit,” she said.
Their draft report on the childcare sector is due to be released later this month.
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