‘Stunned by the intervention’: NSW minister under fire over payment to Labor-linked carer

NSW Families and Communities Minister Kate Washington ordered her department to pay a Catholic not-for-profit $40,000 to drop legal action against a Hunter foster carer with Labor links.

The controversial payment has prompted a former senior Catholic official to level a series of extraordinary allegations against Washington and the Department of Communities and Justice, including that the organisation’s government funding was threatened if it did not “toe the line”.

In 2024, Washington ordered her department to pay CatholicCare $39,316 in exchange for the not-for-profit dropping legal action against a foster carer it had mistakenly paid an allowance to for almost two years after their status as a carer ended. The minister approved the payment after a recommendation from the department.

The minister then went against the advice of the department to authorise a special $15,000 ex gratia payment to the carer, as first reported by The Daily Telegraph.

The carer, whom the Herald cannot name for legal reasons, has close ties to the Labor Party.

Documents obtained by the Herald through a parliamentary order show Washington intervened to use almost $40,000 in public funds to repay CatholicCare on behalf of the carer.

A DCJ official wrote to CatholicCare in January 2024 confirming Washington requested the sum be paid by the department. “Accordingly, CCHM will withdraw legal proceedings against [the carer],” the official wrote.

The email also stated the department would draft a non-disclosure agreement over the payment.

The department’s payment sparked significant angst with CatholicCare, and prompted a series of crisis meetings within the diocese. The decision was initially taken to quarantine the money while the organisation considered its options.

In May 2024, the then-chief executive of the Catholic Diocese of Maitland-Newcastle, Sean Scanlon, wrote to the DCJ to raise his concerns about the department and the minister’s handling of the “highly unusual” case, as well as objecting to signing a non-disclosure agreement.

“We were stunned by the intervention,” Scanlon told the Herald.

“We took legal advice … I wrote to the department questioning their direction … The matter went to our advisory board [and] we considered reporting it to the ICAC.”

In his letter, Scanlon said DCJ had verbally requested CatholicCare staff to scrub any mention of the minister from written correspondence. He also said staff at the not-for-profit had believed there was an “imputation” in its dealings with DCJ that its ongoing funding could be affected if it did not agree to the minister’s intervention.

He also insisted that the diocese would not sign an NDA, saying it “looked like a shut-up agreement”.

“I was never going to sign that. I could not believe it.”

Another CatholicCare employee, who spoke to the Herald on the condition of anonymity, described the process as “extremely unusual”.

“The consensus among senior leaders … was outrage,” they said.

In a statement, Washington said the case “warranted an ex gratia payment to ensure a foster carer was not left tens of thousands of dollars out of pocket after continuing to care for a vulnerable young person”.

“The NGO involved was aware the young person remained living with the foster carer. Staff attended the foster carer’s home to meet with the young person during that period,” she said.

“I was presented with technical and bureaucratic reasons why this foster carer should personally bear those costs. I did not believe that was fair, and I stand by my decision.

“The payment did not provide any special benefit. It simply reimbursed the foster carer for the ordinary costs of caring for a child that would have been paid had the administrative issues not occurred.”

She did not have any relationship with the carer, she said.

Washington has been under pressure over a series of scandals within her department, including two foster children being allowed to live with a convicted triple killer, and the alleged murder of a child at the hands of his mother, who was the subject of multiple child safety concerns.

When asked on July 14 if Washington acted appropriately in granting the $15,000 ex gratia payment to the foster carer, Premier Chris Minns said he had not spoken to the minister, but was satisfied that it was a “reasonable intervention”.

That’s despite the department recommending against the payment, in part because the dispute between the carer and the Catholic not-for-profit was not caused by the government. In advice to the minister, the DCJ said it would set an “unhelpful precedent” and warned it carried “considerable reputation risk”.

“The moral justification is limited,” the department said in briefings obtained through parliament.

However, the latest revelations are likely to place further pressure on the minister.

Opposition families and communities spokeswoman Natasha Maclaren-Jones said Scanlon’s comments showed Minns “could not look the other way”.

“This raises serious questions about whether decisions are being made fairly and consistently, or whether the rules change depending on who has the minister’s ear,” she said.

Scanlon told the Herald he and other staff at the Catholic diocese were aware of the carer’s links to Labor.

“This whole thing just looked like an old-style backroom deal,” he said.

“I thought we were past that.”

Washington, the member for Port Stephens, has said that she did not know the carer despite their links to the Labor Party. The issue was first brought to her attention by another MP, who made two further representations on behalf of the carer in August and September.

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