Media Release: Data matching uncovering Family Day Care operators who don't declare incomes to Centrelink

30 May 2017

The Hon Alan Tudge MP

Minister for Human Services

The next stage of the Government's welfare compliance work is focusing on Family Day Care operators who also receive a Centrelink payment (such as Newstart) but who may have failed to properly report to Centrelink all their earnings from their operations. 

Already $60m in overpayments has been identified and we expect to uncover a total of $200m in the years ahead.

While the vast majority of people do the right thing, the unfortunate reality is that some people deliberately defraud the system or inadvertently get paid more than they are entitled to.

Much of the Government's new compliance work in 16-17 focused on those receiving PAYG income. In this situation, we data match the income that a person self-reported to Centrelink to that which their employer reported to the Tax Office.

With Family Day Care operators, we data match the income the person self-declares to Centrelink with the fee information they report to the Department of Education. Nearly all of the cases that have been investigated are where the Family Day Care Educator fails to declare to Centrelink any income at all.

Many of the cases go back to the Labor years, who failed to identify stark discrepancies in data when they were in office. For example, one operator declared no income to Centrelink despite Department of Education records showing they had earned over $240,000.

More than $60 million in overpayments has already been identified from 6,000 cases that have been completed. The average debt raised is over $10,000 per person, much greater than the average for the PAYG income data matching.

Minister for Human Services, Alan Tudge said that this data matching activity was working, so the Government is scaling it up to ensure money owed to the taxpayer is recovered.

“Family Day Care provides an important service for parents across Australia and there are many good operators out there. However these numbers show there is an alarming number of people who are not declaring their full incomes to Centrelink,” said Minister Tudge.

“Taxpayers are happy to support people who are down on their luck, but they expect there to be integrity in the system.

“A large number of the overpayments originated when Labor was in government. They simply failed to do the basic auditing of welfare payments to ensure people weren't receiving payments they weren’t entitled to receive. We are now uncovering welfare overpayments that they never bothered to check.”