Another family took a punt at the pokies with their lump sum payment.
Another family took a punt at the pokies with their lump sum payment.

Centerink glitch leads to spend on exotic bird, pokies

EXCLUSIVE: An exotic bird, an LCD TV and a stint at the pokies are among some of the purchases low-income families have been making as a result of a glitch in government child care subsidies.

The glitch is seeing lump sums of up to $10,000 of back paid taxpayer-funded Additional Child Care Subsidies paid directly into private accounts rather than to providers.

The error comes as many childcare services are being left in debt if families change circumstances, providers or exit the system as a result of Child Care Subsidy being deposited to families rather than providers, leaving them in a situation where centres have to consider laying off staff or cutting programs.

Centrelink has paid lump sums in government child care subsidies to families rather than service providers. Picture: AAP
Centrelink has paid lump sums in government child care subsidies to families rather than service providers. Picture: AAP

Childcare centres, including the largest provider of services in the country - Goodstart - have been giving vulnerable families free care until their application for ACCS is processed.

In some cases it can take up to 12 weeks to come through and many providers are giving care to vulnerable children in good faith on the understanding the subsidy will be back paid to them.

But in a glitch in the system, in some cases Centrelink has back paid the subsidy to families, with large amounts of cash - sometimes up to $10,000 - deposited into the accounts of these vulnerable, low income families who often have never seen that amount of money in their life and are using taxpayer dollars to fund extravagant purchases.

News Corp Australia has been told of one family who used some of their lump sum to purchase an exotic bird - which they then brought into the centre to show to the director.

An LCD television was purchased by another family and others splurged on clothes, shoes and even a stint at the pokies.

There are around 9000 children who access the ACCS - which is provided top of the regular child care subsidy.

Some of the families spent the lump sum payment on a new LCD TV.
Some of the families spent the lump sum payment on a new LCD TV.

Goodstart advocacy manager John Cherry said there were glitches involving payments to vulnerable families.

"We are supporting our families working through problems with Centrelink, but it is stressful for them," Mr Cherry said.

"Families who are already struggling with a range of difficulties shouldn't be put in this position. The government needs to prioritise fixing the system so that families, particularly the most vulnerable, do not face unexpected payment glitches."

A total of 882,540 families had at least one child in approved child care in the June quarter of 2018 according to the latest departmental figures.

ACCS is paid to the most vulnerable, at-risk families and provides 100 hours of subsidised care each fortnight on top of the standard CCS payment.

Chief executive officer of Early Learning Australia Sam Page said it was "irresponsible" for the Department of Social Services and the Department of Education to not have considered the impact of depositing such large sums of money into the bank accounts of vulnerable Australians.

One family spent the lump sum payment on an exotic bird.
One family spent the lump sum payment on an exotic bird.

"I am concerned that the way this has been mismanaged has potentially exacerbated the risk these children are in," Ms Page said.

"It is extraordinary that the Department of Social Services and the Department of Education would not have a system in place to ensure this back payment does not go direct to vulnerable families. They need to resolve this issue urgently."

Executive director of The Parenthood Alys Gagnon said this was "yet another example of how difficult the new system is to navigate for families"

"Families rely on Centrelink and on the government to get this right and if they don't that leaves everyone with enormous levels of uncertainty," Ms Gagnon said

"The Minister must urgently address this issue so that parents and early learning providers can have confidence in their financial situation."

The new Child Care Subsidy came into force on July 2 last year - replacing the former Child Care Rebate and Child Care Benefit.

Another family took a punt at the pokies with their lump sum payment.
Another family took a punt at the pokies with their lump sum payment.

It was touted as one easier, streamlined payment that would be paid direct to providers.

Education Minister Dan Tehan said he did not believe there were any issues with the updated Child Care Subsidy.

"There is not a 'glitch' in the childcare system," Mr Tehan said.

"In some circumstances, eligible families can receive a back dated Child Care Subsidy payment to assist with fees charged by their child care provider.

"The department has provided information to the sector on the situations when Child Care Subsidy and Additional Child Care Subsidy may be paid to the family."

Opposition early childhood spokeswoman Amanda Rishworth said the Coalition had "completely botched their own unfair system".

"This is a system which is burying families in red tape and turning child care centre operators into Scott Morrison's part-time debt collectors," she said.

"It is the government's responsibility to provide a fairer system that works for both families and child care centre operators."