Article: Pay up, parents: childcare hoppers rort rebate

[Astrid]

Pay up, parents: childcare hoppers rort rebate | News.com.au

Pay up, parents: childcare hoppers rort rebate
By Helen Pow
From: The Sunday Telegraph
June 05, 2011 8:33AM


PARENTS are abusing the childcare rebate by switching centres after racking up thousands of dollars in unpaid fees but still claiming the taxpayer-funded benefit.
Childcare centres are being forced to increase fees after a mass of centre-hopping where families accumulate debt at one facility only to pull their child out and enrol them in another without paying.
Australian Childcare Centres' Association president Lyn Connolly said the government was egging on the profiteering by paying dodgy parents half of what they owe in fees despite the fact they haven't coughed up a cent.
"Parents are going from centre to centre skipping out on their debt and still getting the rebate, leaving the childcare centre in the soup," she told Sydney's Sunday Telegraph.
"This is a major concern and it's getting worse. Families can do it because there are vacancies in many areas and centre owners trust that people will do the right thing."


Childcare centres supply the federal government with attendance records and their fees but are not required to say whether parents have paid them.
Kay Bussey, director at Nippersville Child Care and Pre-school Centre in Bateman's Bay, NSW, said it was "the biggest scam in the world".
"We have a lot of centre hoppers and it is a thorn in my side," she said.
"The government needs to at least have a system in place to check, even if the centre just ticks a box. It is wrong - you get a rebate for something you've paid for and if you haven't paid, in my book, you are not entitled to the rebate."
From July, parents will have the option for the rebate to be paid directly to the childcare centre but Ms Connolly said this must be mandatory to have any impact.
"Parents can still choose to have the money paid into their bank account so the problem will persist," she said.
"The Government is wasting taxpayers' money that is allocated to help families offset childcare costs but is being spent on who knows what.
"The genuine parents are suffering because of the parents who aren't doing the right thing - because when a centre has bad debts they have to increase the fees for everyone else to stay viable."
Schakan Gupta, owner of Young at Heart Children's Centre in Merrylands, is owed $8000 by one family who has moved on to another centre.
"This parent gets $4000 from the government but doesn't have to pay me a cent," she said.
Childcare Minister Kate Ellis said the government was giving parents the flexibility to choose their rebate arrangements.
"The arrangements child-care centres put in place around the payment of bills and whether they continue to offer their service to parents who owe significant debts, is a business decision for the centre," she said.

Wow, found this one surprising as I read an article only the other week about outstanding amounts as little as $50 being sent to debt collectors (which I found shocking)

Wondering if it is a huge sign at families really doing it tough, or if it just shows there will always be those who rort the system. Also wonder how a debt of $8000 would be allowed to be accrued.

[The[cookie]Doctor]

Yeah it is dodgy as, although I was certain mine has consistently been what has been paid, not just what the fees are.
If the case if this, for example do people who get a 50% discount still get the full rebate seeing as there is apparently no record of them not paying that half?
(I should know this, but the last person I spoke to at CCMS said it was on the paid amounts so stuffed if I know)

[Astrid]

I was sure it was based on what was paid. I was using FDC and it was billed at the end of the month (Dec), so the last bill I paid was not till the next quarter (Jan) and I am sure that amount was in my (Apr) rebate.

Any centre I have been at has been adamant about being 2 weeks ahead with fees. So letting a family get $8000 behind is hard to comprehend, saying that though how do you turn away children when they are being dropped off?

[Traveller]

I can't understand how someone could get a debt as large as that either. I have to be a week ahead at all times in my fees, and I pay fortnightly. I could imagine someone being a few hundred dollars in debt if they miss a week or two payments, but I would assume after this they would have to forfeit their place in favour of a child whose parents were able to pay their fees.

[Liz]

The arrangements child-care centres put in place around the payment of bills and whether they continue to offer their service to parents who owe significant debts, is a business decision for the centre," she said.

That says it all really. People are rorting the system because of leniant child care centres. If the centres refused services when fees aren't paid, then the attendance records wouldn't include that much that is unpaid.

We only use registered care (preschool) so not sure if it's different, but I claim using payment receipts. Maybe the automated system for approved care is different? But it does come down to the centre itself cracking down on people paying their fees.

[briggsy's girl]

That says it all really. People are rorting the system because of leniant child care centres. If the centres refused services when fees aren't paid, then the attendance records wouldn't include that much that is unpaid.

We only use registered care (preschool) so not sure if it's different, but I claim using payment receipts. Maybe the automated system for approved care is different? But it does come down to the centre itself cracking down on people paying their fees.

yeah unfortunately it lands on the shoulders of the child care centre and how they manage non-paying families. they could pull their place - but at what point do they do that? the government pay the rebate on what the centre advise they have charged, not what has been paid. the child care centres have to put in usage statements to be able to claim CCB and it's on that basis that CCR is paid.

[butterfly_warrior]

Our centre requires a two week bond, and to be paid two weeks in advance at all times. Two weeks notice on leaving, which if you leave without giving notice, they will not return the bond and will use that to cover unpaid fees in the notice period. I don't know at want point they'd refuse to take the child with fees unpaid and I don't really want to find out either.

I get that there are parents doing what they can to rort the system, but the ability to do so comes from the centres allowing them to get so far behind in fees. I can understand them wanting to help families with financial difficulties, but $8000 in unpaid fees? That just seems to be poor business decisions, really.

BW

[Trillian]

Astrid I think it's a bit of both - there would undoubtedly be families doing it that tough that they leave without paying (embarrassment maybe?) and then there would be others who would deliberately rort the system and rip off centers. Maybe the only way around it is a register that the centers can use to list non-fee paying families so the new center can check them out and decide if they want to let those families attend or not. Afterall childcare is a business and if there are people out there who are doing the wrong thing then it just makes it so much harder for everyone else who does the right thing.

[Tinsel]

I read this today and thought wowsers. How on earth do they get places at other centres!? The waitlists for other centres here is absolutely huge so I can't imagine how they get into various centres for hopping.

Also, how very disruptive for the child to start at a new centre every couple of months or whatever the cycle of the hopping is. I can't imagine.

Our childcare centre takes a bond of a month fees when you sign up and 4 weeks notice to leave.

[Astrid]

I suppose the Centre itself benefits from submitting their usage statement and including the unpaid for days as they would be getting the CCR, so at least they get something for those days used.

Certainly agree that it is a poor business decision to allow a debt to become so large.

Maybe they could introduce a reporting system where families who don't pay their fee are forced to have the CCR paid to the centre rather than being able to claim quarterly.

[Jellyfish]

Seems a bit cheap to put all the blame on child care centres leniency... I mean, just because somebody could do this doesn't make it right or resolve their responsibility in the situation. Child care centre owners are people too and I don't think they deserve to be taken advantage of. Hopefully though; once bitten, twice shy.

[Cally]

There aren't enough childcare centres in Batemans Bay for people to do this, I find that comment from the director quite surprising.

[Astrid]

I don't think anyone is putting all the blame on the childcare centre, but they are part of it if they let debts go on for too long. It goes both ways, centres need to manage their incoming payments and parents need to do the right thing. If there is an issue with payments then discus the situation with the centre director.

I wish the article provided more background as to what has happened.

[briggsy's girl]

there are some centres that allowed people to pay less week by week on the verbal agreement that they would be paid the balance of the fees when the CCR was paid. it wouldn't take much for a parent/customer to do a runner on that. and realistically, having more than one child in care full time, 8k may not take that long to mount up

[Gigi]

wow, my initial thought on reading this, it reminds me of people who fill their car with petrol, then drive off. it's stealing.