A 27-year-old woman has been arrested following multiple raids by the Australian Federal Police on a family day care provider and a number of other properties in Albury and Wodonga.

The woman, Melissa Higgins, is the director of family day care provider Aussie Giggles.

Higgins is accused of falsely claiming more than $3 million in Government childcare subsidies designed for children at serious risk of abuse and neglect or from families experiencing financial hardship.

She was arrested in Albury on Monday and charged with three counts of obtaining a financial advantage by deception.

The arrest was part of a multi-agency investigation involving the AFP, the Department of Social Services and the Department of Human Services.

Approximately $2.1 million cash and a vehicle worth about $90,000 were restrained by AFP officers following the raids.

An online profile for Aussie Giggles said the company provided high quality childcare in a family-friendly environment.

According to ASIC documents, Higgins is the sole director and secretary of Aussie Giggles, which was registered in 2012 and began operating in May 2013.

Social Services Minister Scott Morrison said taxpayers spent about $7 billion a year to help Australian families access childcare.

"It is crucial this assistance is not taken advantage of," Mr Morrison said.

"My department will continue to crack down on non-compliance through random checks, forensic data analysis, suspicious claims investigations and other measures.

"Childcare services are on notice — since 1 July 2014 to end February 2015, the Government’s Child Care Payment Compliance Teams have suspended, cancelled, placed restrictions on others and instigated fines from 39 child care services."

To date about $10 million of recoveries had been made by the multi-agency Fraud and Anti-Corruption Centre, he said.

Raids follow complex investigation

The AFP alleged the fraud began in December 2013.

Linda Champion, manager of the AFP's Fraud and Anti-Corruption Centre, said Monday's arrest was the culmination of a complex investigation.

"Investigations like this send a clear message to anyone who is thinking of engaging in this type of activity," she said.

"Collectively, we have proven our ability to investigate and take action, as we have done today."

Over 170,000 Australian children attend family day care, where care is provided in a private family home.

No more than four children can be cared for in a single family day care facility.

There are 714 family day care services operating across the country, with parents entitled to claim the 50 per cent Government childcare rebate from approved homes.

Higgins is due to appear in Albury Local Court on May 28.