Government crackdown on 'child swapping' loophole saving taxpayers almost $8 million a week

The closure of a loophole, that allowed childcare providers to receive subsidies for minding their own children, is saving taxpayers almost $8 million a week, new data shows.

The so-called “child swapping” loophole was closed by the Federal Government in October, and statistics from the Education Department showed this move was saving the Government $7.7 million a week, with weekly subsidy claims plummeting to just over $500,000.

Minister for Education and Training Simon Birmingham said too many people were making invalid claims.

“It was never intended, nor envisaged, that family day care operators would be paid in effect to look after their own children and what we should be looking to do is ensure that child care is as accessible and affordable as possible for those families who are most reliant on it to juggle work and family,” Birmingham said.

The senator has also reassured providers that only those rorting the system are being targeted.

“All of our childcare reforms, including the ban on child swapping, are drafted very carefully to ensure that we take into consideration any other impacts where there might be legitimate cause for certain practices and where people are in remote circumstances or where children may have special needs that warrant the care of a different family day care provider,” he said.

“That’s permitted under the changes that we’ve brought in.”

The loophole’s closure coincides with a widespread crackdown, including an increase of compliance checks and the recovery of incorrect childcare payments, tipped to save another $283 million.

Senator Birmingham has promised the overhaul will help keep costs down, amid predictions fees will rise by 14 per cent by July 2017.

The Department of Social Services expects the costs of long day care to increase 6.5 per cent this financial year, and 7.3 per cent by July 2017.

That would mean fees for a handful of day care centres in Sydney could hit $200 a day, and $150 a day in parts of inner Melbourne.

But Senator Birmingham said most other centres would be much cheaper.

“And if they are being charged in some instances, they are clearly outliers and that’s why I would encourage parents to scrutinise very carefully what they’re being charged [for] and to quiz those sorts of service providers,” he said.

“Overall though, we are going, in our reforms, to apply an hourly fee limit of $11.50.”

This post originally appeared on ABC News.