The Department of Social Development is halting an investigation into a Fredericton family who had been using respite funds to hire a specialized support worker for their autistic son.

William and Francine McKelvie received a letter in December, along with more than 200 other families, from the provincial government warning them that applying for "respite money" and then using it for something else could be considered fraud.

The McKelvies had used funds for respite care to hire a support worker for their nine-year-old son.

William McKelvie said following a meeting with their lawyer and provincial officials last week, the controversy has been straightened out.

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William and Francine, left, McKelvie will not be investigated for fraud by the Department of Social Development. (CBC)

"We no longer have to lie on our forms. We no longer have to even deal with our forms," he said.

"As a matter of fact, it's easier this way. Everything is appropriate."

McKelvie said his son is now able to continue his therapy with a personal support worker for 10 hours a week at $18 an hour, instead of the lower rate that was provided by using the respite form.

McKelvie said they had been using the respite form on the advice of their social worker. The Fredericton father soon discovered many others had received similar advice.

"People come forward to say that, ‘Look, we saw your story and the same thing has happened to us,’" he said.

Collection controversies

The Department of Social Development has found itself drawn into two recent controversies over how provincial funds were spent.

Ron Powers received a letter in December saying the Department of Social Development’s recovery unit discovered an accounting error. Powers was given an extra $264 in 1997 and the provincial government was after its money.

But Powers received a letter from the department in February, saying the 16-year-old case was being dropped because of the statute of limitations.

The department established a recovery unit to help recoup money owed to the province.

A government official estimated the province wanted to track down $14.5 million. The unit had recovered more than $500,000 in December.