I decided to work out the difference in our family income that has changed by changing job roles in recent years.
A few years ago DH and I were both teachers, earning about 31K each. Now with promotion DH earns 62k and I plan look after the children after this baby as childcare costs in London will exceed my wages. Our household income therefore is the same, simply one person earns what two used to earn.
I was surprised to calculate how big the difference in take home is with both scenarios:
- (one earner of 62k)
Earnings after tax: 46k (no higher tax bracket)
Childcare voucher savings: (2x930) 1860
Child benefit: 1700
Total: 49560
- (two earner of 31k)
Earnings after tax: 42k
Childcare vocher savings: £600
Child benefit: 0
Total: 42600
So that's a huge SEVEN GRAND difference in budget, on the same household salary.
I'm not arguing that we should get more from the state, we're obviously in the bracket of a good household income and it's right we're not entitled to benefits in the current climate. I do however think benefits need to be brought into line based on family income. With the proposals a household with two incomes of 49k could be taking home nearly 40k more than us and receive more vouchers/ child benefit. I can't think of the reason why family income is not used to calculate entitlement.
If anyone is interested a nusery place in London i around 1100 per month, so 2 is £2200, so requiring a salary of £36,000 to cover fees (and excluding costs of commuting, similar to the savings of childcare vouchers so it balances out)
*this is my calculation, I'm no expert so someone may find errors!