How frustrating. Have a chat to her and say that it concerns you, that if C'link ever find out that they're living together, that they will have to backpay the money and that will make things really really difficult for them. And there's a good chance C'link will find out, all that info seems to be sort of collective, medicare, c'link, tax...As Raven says, you can suggest she tells them they've reconciled.

I know it's awful that she is cheating the system. But I imagine that having to pay back a huge debt would take a significant toll on more than their finances, on their marriage, parenting, lifestyle - it could be really full on. She definitely needs to fix this! But as Bath points out, if it were me being dodgy, I know I'd like to be given the nudge to make things right, rather than being reported.

If she's not made any changes after a certain amount of time, well I guess she can't say she didn't know the consequences. It's possible she has no idea how serious the issue is though. Especially if she's sharing the info so freely!!