Cancellation of Childcare Benefit Approval: Moonlight Family Day Care Pty Ltd and Secretary, Commonwealth Department of Education and Training

This was a case heard by the Australian Administrative Appeals Tribunal in which Moonlight Family Day Care Pty Ltd sought a review of the decision of the Department to cancel its child care benefit (CCB) approval issued under A New Tax System (Family Allowance) (Administration) Act 1999 (Cwlth) for failing to meet the conditions of the approval. Specifically, Moonlight failed to comply with its obligation to provide accurate information to the Department as to whether sessions of child care have occurred and the details of those sessions in its reports under the Act. It was alleged that Moonlight had made false statements in respect of at least 7750 sessions of care resulting in an overpayment of CCB. Moonlight at the hearing did not take exception to any of the allegations of breaches made against it but argued that some other penalty like suspension was more appropriate rather than cancellation. 

The Tribunal upheld the decision of the Department to cancel approval, stating that: 

I was surprised to some extent, however, that no person from Moonlight actually gave evidence. That raised for me some concerns about the undertaking given by Moonlight to repay the sum of $160,000.00 involved. My concerns were not diminished upon learning that Moonlight disputed it should be accountable for the whole of that amount and sought to lay some blame elsewhere.

I was surprised also though that the sum in question had not yet been actually repaid, without demur, and I consider that to be a factor of importance. Moonlight in effect was asking for a favourable outcome but was not prepared to actually repay the Commonwealth the amount involved despite admitted breaches.

I agree there appears to be no order of priority given in the legislation as to whether a cancellation or a suspension applies but that does not mean that it is inappropriate to order cancellation for a first offence, so to speak, if the offence is serious enough and the circumstances warrant it.

I am satisfied in this case that the admitted breaches are sufficiently serious to warrant that course.…

The admitted breaches in this matter were frequent and are of a serious nature, potentially impacting on the children under the care of the service. In particular, they are serious in point of amount and in number—perhaps as many as 7000 occasions are involved. I do not accept the submission that based on an overall percentage relative to the total amount of care in question, that this is not a serious or concerning number.   Further, as I have said there has been no repayment of the money involved.

Finally, I see no merit in Moonlight blaming the educators involved: Moonlight had a clear obligation imposed on it by Commonwealth law and it is not in point to explain away failure to meet that obligation by referring to the errors of others. This shows up in my view as a failure of governance which is central to the admitted breaches of the Applicant. (paras. 21-26)