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

This case involves an application to the Australian Administrative Appeals Tribunal for the review of the decision by the Commonwealth Department of Education (respondent) to cancel the Child Care Benefit Approval of Chicho Family Day Care Pty Ltd (applicant).

The Department cancelled the approval as it found that the family day care provider had breached the requirements of the family assistance law relating to child swapping; claims while educators or children overseas; claims for children over 14 or in secondary school; overlapping sessions of care; claims for absences before care commenced and after care ceased; late enrolment and attendance reporting; and breach of educator-child ratios.

The Tribunal assessed the alleged breaches and response of the respondent and affirmed the cancellation, concluding:

I consider that in applying s 200 of the Administration Act, I must consider the provisions of the Breach Determination. Relevant factors include: the severity of failure to comply with conditions for continued approval; the frequency of failures to comply; and, whether failures may threaten health or welfare of any child in the care of the service. The appropriate sanction is cancellation for ‘serious or frequent’ failure in the past.

In addition, there is a presumption in favour of cancellation where contravention involves ‘repeated’ breaches of s 219N. Repeated is defined as involving either 100 or more sessions reported inaccurately, or payments due to misreporting in excess of $5,000. Cancellation is also appropriate where there was false, misleading or otherwise inaccurate information about care where the session of care was not in fact provided (for example, educator or child overseas).

The total amount of sessions of care that were reported in breach of s 219N of the Administration Act is therefore 2,988. Breaches under s 219AB of the Administration Act total 179 instances for late enrolment reporting. The Eligibility Rules breaches include 23 instances of failure to report educator CRNs covering 28,369 sessions of care. The breaches of National Law/National Regulations comprise 63 hourly blocks. The total value of overpayments paid to the Applicant amount to $56,862.42.

I consider the submissions raised on the Applicant’s behalf insufficient to address the concerns arising from the seriousness and frequency of the breaches. As noted above, the evidence overall did not provide significant comfort that Chicho was administered in a manner enabling it to meet the standards required by the family assistance law. It is of particular concern that its principal asserted expertise in this field, but was, effectively, reliant on breach notifications to highlight where there were gaps in the service’s governance.

I am satisfied that the range and volume of breaches mean that they should be considered to have been serious and frequent. I am supported in this conclusion by reference to the definition of repeated breaches in s 4A. The total instances set out above, and the value of overpayments, indicate that breaches of conditions of Chicho’s operation were serious and frequent. This conclusion is unavoidable when taking into account the indicative inaccuracies and misreporting set out in s 4A, as they are far in excess of those thresholds.

CONCLUSION

Accordingly, for the reasons given above, I consider that the breaches, subject to those sessions conceded by the Respondent, have been made out, and that the appropriate sanction is the cancellation of Chicho’s approval as a child care service under the family assistance law. (paras.62-7)