The shocking photo that means this man's 5 children are banned from returning home

The family of an Australian Islamic State (IS) fighter would face the full force of Australian law should they return home from the Middle East, Prime Minister Tony Abbott says.

Fairfax Media is reporting IS fighter Khaled Sharrouf’s wife Tara Nettleton and their five children are seeking to return to Australia.

Amongst the children are Sharrouf’s seven-year-old son, who was photographed last year holding a severed head.

Mr Abbott said there would be no leniency shown.

“Crime is crime is crime,” he said.

“Criminals will face the full severity of Australian law and it is a crime, a very serious crime under Australian law, for people to go abroad and fight or assist terrorist organisations.”

Mr Abbott said even if a returning fighter offered to help authorities by warning others against going abroad, they should only be allowed do so after they had been punished.

"I'm absolutely delighted when a criminal comes out of jail, reformed and rehabilitated, for that criminal or former criminal to go and spread a message of obeying the law to others," he said.

"But I'm afraid you don't get off scot-free just because you say 'oh I've seen the error of my ways'.

"If you commit serious crimes, you should face serious punishment."

Mr Abbott's latest comments came as a United Nations report was released revealing the full extent of Sharrouf's support for IS.

The report, prepared by a team monitoring compliance with the UN Security Council's sanctions regime, found a money transfer business owned by Sharrouf's sister and brother-in-law had sent up to $20 million overseas to finance terrorism.

Previous reports about the money transfer business, which has now been shut down, had indicated the sums being sent overseas had been much lower.

When asked how authorities would care for Sharrouf's five children, should they return, Mr Abbott said they would receive no special treatment.

"The children of these particular criminals will be dealt with in the same way the children of criminals are normally dealt with," he said.

Amid concerns that the children themselves may have been radicalised, Immigration Minister Peter Dutton said authorities' response would depend on their individual cases.

"It depends on the circumstance, the ages of the children. If they're infants, for example, then they would be in state care as we've seen with some people who have decided to abandon their children and go off and fight in the name of [IS]," he said.

"Those arrangements would operate as they would with any family where parents have abandoned their children or are not acting in the best interests of their children."

Ms Nettleton's father, Peter, told reporters on Wednesday morning he did not know her or her children's whereabouts.

"I haven't seen my daughter for over 10 years. I have only seen two of the grandkids," the statement said.

"I don't know their whereabouts and what they are doing. I only know through the newspapers and television where they are and what they aren't doing.

"I still love my daughter and I hope she comes home safely."

Children's situation highlights need for discretion: Dutton

Mr Dutton said the case illustrated the need to have ministerial discretion around contentious issues like citizenship rights.

On Tuesday, the Government announced it would legislate "within weeks" to strip dual-nationality terrorists of their Australian citizenship, but deferred for discussion a more controversial measure to also revoke in sole-citizenship cases.

"We're not going to render somebody stateless, but if they are acting in the name of terrorism or a terrorist organisation, if they're involved in financing or an actual terrorist act, or an act preparatory to, we do say that that is a breach of your privilege to be an Australian citizen," he told AM.

"If there was a black-letter provision which said everybody coming back, including children, would face revocation of their citizenship then I think that would be something that people would want to debate.

"What we've said here and as again operates in the UK, there is the ability for ministers to assess individually the cases that come before them."

However, Mr Dutton confirmed if the roles were reversed, Australia would have a constitutional obligation to accept any citizens who had been stripped of their citizenship in another country, even if they had been found to be committing acts of terror.

"Well, if they were committing acts of terror they would face Australian law on their return. And that's a very important point; that this is not about a criminal sanction, it's about removal of a significant privilege," he said.

Opposition Leader Bill Shorten said he was "very concerned" about the children of Australian IS fighters and their safety had to be considered.

"These children are in warzones seeing terrible things," he said.

"Obviously we need to be briefed. We've seen some of the headlines in the newspapers, but making those children safe is important."

This article originally appeared on the ABC and was republished here with full permission.