New childcare tax break to be announced by the Government today - what do you think?

Xenia you keep giving this example of this poor single mum on £50,000pa but if she's paying a mortgage she would end up owning a house, which is a pretty large asset by anyone's standards - and one which a lone parent on benefits could only dream about.

Plus you have ignored the fact that she should also be in receipt of child maintenance, which depending on whether the father earned below £800pw (gross) would be 12% or £800-3000 per week 9% of his salary.

And aren't you always telling us that in your world childcare costs are joint? So £7,000 of her childcare costs would no doubt be paid for by the father...!

Yes, that is the issue and it was the same with those people on the margin who lose 100% of their single person allowance once they go over a certain level (cannot remember the level) which also means a marginal rate of 60 or 70%.

curryeater, that sounds hard and you are trying to do the right thing. Can we help? I remember the stage when we both worked full time and had 3 children under 5 and our childcare cost was 50% of each of our pay (or one of us was working for nothing whichever way you want to look at it). I felt that my career had progression and would have salary rises (which proved true) so it paid off inthe end but all that coming home to doing washing etc is very hard.

Eventually we could afford some help so we'd put the washer and dishwasher on and the cleaner would empty it a few times a week which helped but you need money for that.

I think there should be much more publicity of what net pay people have left over even on £60k salaries after they pay for mortgage, full time childcare, travel to work and tax/NI. I don't think people have any idea that a single mother on £50k pays £14k tax/NI, £14k mortgage, £14k childcare for one full time nursery place and is about in the same money left over bracket as a sdingle parent on benefits with all her rent paid. People just say - wow she earns £50k she must be rich.

Ultimately those stll working will win out because they are keeping careers going (loads of women on musmnet who give up work in all kinds of good jobs find in essence they hardly ever can work again at the same levek, career shot to pieces because they chose to have 5 years at home cleaning and doing childcare which they didn't much like anyway) and secondly when they keep working they may get promotion. The£100k mothers are not squeezed middle and it's easier for them and you tend not to get to £100k unless you keep working up and up. Also when children go to school those paying a lot of childcare won't have to so they have a bit more money then.

yes, I appreciate that. It was more about the argument really; the argument was that 50% was too high, but we as a non-wealthy family are paying 72%.

Lily, don't forget that 50% tax payers also pay NI.

But your point about marginal tax rates is well made.

Right, Lily, I get it.

And your 12.05 post is spot on.

Strix - thank you! But I am just moaning, there are lots of people who need them far more than me, I would rather you gave them to a really desperate person or charity. I just need to get my itchy ebay fingers tippety-tapping (selling, and then buying, as soon as we get paid) and she'll be sorted for very little money. It's just, you know, how suddenly there is so much leg that wasn't there yesterday

I'm hoping that the gov is reading this. I'm going to give you my breakdown of income and general outgoings in the hope that the gov can see that the so called middle is so squeezed we can do no more and if you squeeze us more, there won't be any tax for you to claim anymore.

Income is £46k before tax. Looking at my pay slip,
Tax and NI combined is £860.
So that's more than £10k out already. Leaving us £35k.
Mortgage is £750. Gas and elec is £100. Council tax is £150. Of course there's water bills, tv license and others. So lets call that £1200/month x12= £14400. Leaving us £20k.
Childcare costs me roughly £800 but £243 is from my wage anyway so that costs another £10k. (For these purposes I've only multiplied £800x12. I know that £243 isn't taxed but I'm just adding it here for convenience as am on phone).
At one point I was paying two lots of childcare as older child has only started reception last September.

Leaving us with £10k. This is to cover food, nappies, insurances for car, house etc, petrol, mot, Christmas, birthdays, activities, clothes, etc. for two adults, 1 reception and 1 toddler.

My dh was made redundant. When he was working, his pay paid for the childcare. Thankfully because I had a job, he could setup on his own and thankfully despite this recession, he's doing pretty well. But because he's self employed, he couldn't claim any benefits of any sort. So we tend not to include his income and we are surviving on mine. His income is a bonus to us. But due to the nature of self employed and new, I can't really count on that regularly.

So. It's by no means rich. It's by no means rolling in it. Yes if I had no kids, I'll have £800 more a month! Or even more due to not having to buy nappies!

But the fact is we do. And we are providing for them as best we can. Some weeks my son gets school dinners and I then take packed lunch. This week we both are on packed lunch. To save £11/week of lunches for him and save £15/week for me.

We are eating out the store cupboards and only buying necessities like milk and bread. I'm making tuna pasta and corn beef hash (ala uni days!) to save money etc. I'm not attending panto and all that to save £100 for the family. I time going out times with the kids so we don't have to eat out. Or I bring lots of fruit and snacks to tide them over.

Not trying to be 'woe is me' because yes we are thankful we can pay mortgage etcetc but just to give the picture that the middle is by no means rolling in it. And yes I'm shopping at Aldi's esp since they've just opened a couple of months before Christmas!!

What people don't realise about the child benefit cut is that imo it is entirely ideological - it is part of the 'divide and rule' politics that makes them set the 'squeezed middle' against the 'deserving' and the 'undeserving' poor. All the rhetoric about strivers vs skivers, and the arguments that 'people on low incomes shouldn't be subsidising those on middle incomes to receive child benefit' is not putting a case for the cuts, it's turning groups against each other.

the child benefit is a brilliant example - they say 80% of people agree with it. But that's the 80% not affected by it. The same with the benefits cap - they ask a load of people if they agree with it, and people not affected say 'yes that sounds sensible'.

You can't just ask people who are not affected, because how will they know what the implications are. The child benefit cut is so that when the people affected by the benefits cap say 'hey, we are already poor' they can say 'yes, but look, we've hurt the middle as well'.

The cut to the top rate of tax is inexplicable. Their argument that 'the rich are paying MORE tax' is insane - because the reason they are paying more tax is because their earnings have risen more - the only salaries that are going up are the very top ones.

I fully appreciate that everyone needs to contribute, but I don't appreciate why it is families with children that have to bear the brunt of it. A re-jigging of the tax system would have been far more progressive, because it is intrinsically fair. Imo they should have left the personal allowance where it was (because raising it to 10k and then taking all the money back again through benefits cuts is just increasing admin). Then the HRT threshold should have been moved to 70k, which is more in line with where it should be - 42k is just crazy - BUT should have been put up to 42 or 43%, and THEN abolish the 50% rate of tax. You'd need to jiggle the figures to make them work, but that way the top incomes really would be contributing the most. I'd have even been happier to leave the HRT threshold where it was and stick a penny or two on it, rather than this divisive and unfair cut to child benefit, and the divisive language used to justify the benefit cap also.

Make Childcare Costs 100% Tax Deductible

WE should have a thread whereby the squeezed middle class go and tell their stories, and then we should send it to the government and to the newspapers and ask the government to please announce immediately what they plan to do about it.

There is an e-petition on making all childcare completely tax deductible. I posted a link recently, I'll see if I can find it.

curryeater - because of the way the CB is withdrawn, we are between that 50-60k bracket. Every extra pound dh earns, 40p goes to the government in income tax, and with 4 children, 30p also is taken off the child benefit. When you factor in national insurance contributions as well, it means that for every extra pound dh earns, we are 28p better off.

With even more children you can end up paying the government more than you are earning.

It's marginal rates, but marginal rates of tax are what can highlight unfairnesses. What is the incentive for dh to work longer hours to boost his salary if 3/4 of it goes to the government? And certainly for people on 150k +, they argued that 50% was too high a rate to be an incentive, so I cannot see why for people on 50k, 72% is ok.

Curryeater,
How old is the DD who is in need of clothes? (just wondering if I might have some to spare)

mam29, great posts. Your circs are really similar to ours (except DP has been a SAHD instead of me being the SAHM). I feel a bit tearful actually, I am sick of working so hard and being so fucking broke all the time. DP is starting work next week, we will be paying 2 pre-schoolers in childcare and all the housework falling to us at evenings and weekends so is this actually going to feel like a better life? (not relevant as it is what he wants and needs to do, so my selfish desire to have someone loading the washing machine while I am at work is neither here nor there)

Lilybolero, what do you mean by 72% tax as you have children? Sorry if i am being thick.

We can't afford the heating. I am working from home with a hat and gloves on in a room that is 6 degrees c. My daughter is playing downstairs with blue fingers. We have no money left, my other daughter suddenly has no clothes that fit and is going out in dresses well above the knee until the 25th when I will jump on ebay and buy up whatever I can get for her to last her till summer... and then it will start again. I walk 5 miles a day because there is no way I can afford bus or tube fare once I get off the train. I can't see what else to stop buying or turn off. I have a few things left to sell and that's it.

Everyone around me at work has been made redundant, I am working like a bastard, no one is getting a pay rise, no one is getting a promotion. Where is it leading?

If the govt care about childcare so much why do they let TORY councils close LA run nurseries, make them extortionately expensive or reduce their hours. If they want to subsidise child care, do it at the point of use.

£2000 would probably buy you just over a month at a private nursery in the area I live.

There is also a massive shortage of childminders around here. The only ones I could find were a smoker and someone who thought it was OK to slap kids around; found out later the good ones had a two year waiting list.

I worked when my children were little because I had to, but worked different hours to DH and we didn't have much of a life. I think child care or lack of it, dominated my life for around 5 years.

Thing is though that if you are in this 30-60k range of working hard to pay the mortgage and bus your kids and yourself to school/work, but having not a lot else to show for it, you can't just snap your fingers and jack it all in to live off the state. You would have to totally change your lifestyle to drop a lot of the things you do that you don't even see as luxuries.

It's the transition that hurts, and when CB/tax thresholds are moved while costs of living are going in the opposite direction and you have to run even faster just to stand still, that is painful and feels unfair because it's inflicted on you even when you were 'playing the game' as the Government seemed to be asking, work hard, pay your share etc.

I'm a central govt civil servant, I don't grumble about what I am paid or my T&Cs, they are very good. I agree that from 2005-10 we created too many non-jobs and had a creeping inflation of the grades of those which existed, instead of moving people through more visible salary spine point progression. However to correct that, we are now on a (2? 3? 4? year) pay freeze, a steep pension contribution increase, pensionable age drift (up), pension amount forecast (down - not that that means anything, as CS pensions for my generation will be paid out of the tax take in the 2050s on, whatever that amounts to). I didn't take redundancy because I believe in the value of what I do. But the government doesn't seem to - we now have zero 'employee engagement' type of strategies, no meaningful training, job/pay progression is a lottery of who can talk the talk, and the internal cynicism and lack of vocation is becoming so serious that I think it should be considered a business continuity/security issue.

olgaga spot on.

Stay at home mums reject 'housewife' tag.

Widow we are all mums. Some choose to work outside the home and pay someone else to care for their children. Some work in the home, caring for their children - not "caring" for, or wedded to, their house!

The term "housewife" dates back to the 1950s when women were expected to give up their jobs on marriage - whether they had children or not.

SAHM reflects the fact that you are staying at home while your children are young and need care - a necessary task which would otherwise have to be carried out by a paid worker.

Nowadays if women give up their job it's for their children, not because society expects them to. That is why most women feel the word "housewife" is obsolete and inaccurate, and why its use is considered pejorative.

Really good posts, mam29. It is high time the government (and the people) realise that hard working people are paying too much for too little.

My situation is a bit better than yours, but we have nothing to show for our hard work at the end of the month. Its no wonder people chuck in their job and let other people pay the bills. Ho hum....

Looked at hubbys payslip and wish I hadent.

bare in mind this is combined.

800quid tax and ni per month so nearly 10grand out of 41k is taxed. so its a lot.

our rents and bills approx 1000- per month possibly more.

so thats 12k before paying out food
travel
phone
other bills
childcare,.

we not exactly rolling in it .

what people forget about benefits is say they get 25-30k a year thats net not taxed so they better off.

Even faith doesnt get free bus pass and know someone paying 60quid a month school bus but how else you meant to get them to school?

Also its the higher educated that tend to get higher salaries.

I have student loans to pay back.

I dident buy at right time so can live off the equity of my house.
we wouldent be eligible for social housing.
I dont have wealthy family to give me deposit to buy

we dont have savings they dwindles when kids were born
we ont ahve private pensions.

I cant imagine the 50-60k are rolling in it.
As they will be more taxed.

if you have more then1/2children

childcare becomes very probamatic and expensive.

I want to go back hence why going self employed this year as no ones going to help us. we will get by and hopefully acheive our goals despite the co-alition shafting us.

The bus pass thing is really annoying; we are losing some or all of the cb, depending on dh's exact income this year (& paying a tax rate of 72% because we have 4 kids ; interesting how 50% is too high for millionaires but 72% is ok for families on modest incomes).

OAPs are all entitled to free bus passes, but our kids have to pay £52 a month just for a bus pass to get to school (no school bus so at the mercy of the public bus company who have a monopoly and therefore charge vast amounts).

I calculated that by the time my youngest is through secondary, we will have spent seventeen and a half thousand pounds just on getting the kids to school. They are at a state school, and there are no other options for transport.

And if dh jacked in his job we'd get them free.

It is really quite ridiculous that the Tories have played this game of divide and rule, making out that people on 50k+ are rich. There are so many calls on your income at that level, losing child benefit is a real blow.

Im not even losing my benefit when first announced at conference they mentioned £42,000 figure hubbys 41 but we far from rich we get by.

True we chose for our kids to have hobbies and activities as they enjoy them and think its good for them as schools offer so little extra currcicular.

We cant afford private fees.

we try have 1 cheapish uk holiday a year and 2-3days out as hubby works retail he works 50+hours week no overtime. He works weekends, nearly every bank holiday, worked xmas eve and boxing day so family time is quite limited feel like single parent most weekends when other families are together.

In week sometimes he works long days so kids dont see him at all so both school runs, homework, tea and bedtimes all down to me.
Then when he gets home he has homecooked meal on table and fairly clean house.

Im not worlds best housewife we live in house we outgrown
3messy kids. I have jno grandparent help with kids.
My family over hour away, mil never leaves house and only wants to see 1 child a t a time.

middle child 3 gets free funding this month 15hours which will help
but since september paid 2terms of preschool
since shes 18months paid 1 day private nursery fees with vouchers as its been good fotr her educational development because shes sept born got extra year of childcare to fund and unsure when can afford to start her younger brother hes 2 in april.

We dont own our own home we pay private landlord.
no housing benefot
council tax is fair whack and utilities rising.
We need least 1 car but running car and petrol is high.

we realy are quite cautious these ays rarly go out.
we budget and meal plan but each month im tweaking things .

lower income freinds think we loaded but i would day 40-60k depending where you live and net not rich .
We bit the age bracket going on luxury cruioses or have maximum amounts in our isa. We sometimes dont out heating on as no allowance to fall back on we on our own.

I stayed up late last night watched this week on cbbc1 and janet street porter defended oaps.

All she kept saying was

they paid in all their lives-like anyone hos worked in past hasent.

They largest most engaged voting group.

That brown brought in many of these benefits which now too hard to take away

Yet this next generation of retirees be wealthiest in generations.

But their benefits remain in line with cpi and others rpi which is less.

Their benefits not capped-ringfenced rises

they get to keep winter fuel allowance no matter how rich they are or if they live in spain.

Because its too expensive to means test yet they can do same for cb.

same with free bus passes issued paid bus companies which some hold and hardly use.Sometimes I wasl miles ith toddler in tow as buses so pricey £3 to get from one end road

Free tv licence.

I guess they thourght we small %of electorate.

Not sure how many families will lose.

also the 4 parents on 49k keep theirs

More and more people being dragged until higher rate tax.

yesterday one pensioners minister warned 20-30 group that we may never retire we have no private pensions. probably work until 73 and we would have paid in too.

Im not sure ho to vote. I hate labour,
if I vote ukip then thats a vote for labour.

Going to write to my mp.

Sadly unless we start getting our voice accross then nothing get done,

How do families become as powerful as oaps,

we vote every election.

Those not effected by rises still getting their benefit wont care.
news kepts going on about how we just too wealthy and its only fair.
I know so many people working and non working living life on benefits and financially better off than us.

Today eldest cried as she wasent school dinners today as dident have money on me tuesday to pay for it.

The change is happening with cb nothing we can do.
But guess we can change out vote.

Problem is with media is they either very wealthy or have no one with kids to discuss the matter its like working families dont matter.

When they have families on tv its always the poorer ones. guess makes better veiwing.

If hubby were to hypotheitically quit his well paid job then state be screweed then.Not that he is but we striving and failing.

Until all groups treated fairly then we not all in this together.
new ssaid doubt he touch pensioners this side of election thats 2years away whilst families continue to struggle.

I wish i could pick labour shaow cabinet as whilst they have milliband and balls at top cant trust them.

I dont think ukip wil become 3rd party.
Lib dems have no power.

mam, that is very helpful.
I heard Iain D-S on Radio 4 the other day (he was very good and genuinely is trying help). He did make the point that under the last Government you could earn £60,000 and still get tax credits,. I suspect they would like those in work not to be having benefits. If that change did occur employers may then have to put wages up (in order to get staff) as a lot of tax credits, housing benefits for those in work support low wages.

I certainly agree that is the middle earners who are most likely to lose out, lose child benefit, perhaps will lose when universal credit comes in.

However it is done savings have to be made somewhere.

lexyma I believe we are the only developed country not to give some sort of universal child benefit.

There's no detail because they want to announce stuff a bit at a time.

mam yes, it is all unfair on middle incomes. Work hard, get promoted, just get into higher tax band and hey presto, it's all give, give and no hope of improving your own lifestyle. We will certainly not be voting Conservative, or Lib Dem again. Even my parents who were die hard Tory voters will not be.

Why is there nothing about this on news no detail?

mentioned on my fb and no seemed to have clue what was on about.

Tried too google and kept coming up with 2009 brown wants to axe childcare vouchers,

All I did find was

about new universil benefit

From dfw site.

Support for children within Universal Credit will be provided in the form of a child element. This will be included in a claimant?s Universal Credit award where they are responsible for a child or qualifying young person that normally lives with them. The child element is comprised of two rates; one rate for the first/only child and then a reduced rate for second / subsequent children.
Universal Credit will provide more support for childcare costs. Under current tax credit rules, support towards childcare costs is only available to parents who work more than 16 hours per week. Under Universal Credit, this requirement will be removed and support will be available to parents regardless of the number of hours they work. This will provide an important financial incentive to those taking their first steps into paid employment. It will mean that around 80,000 extra families will be eligible to receive support through childcare.
Universal Credit is expected to be particularly beneficial to lone parents, including those who wish to work a small number of hours."

Also im baffled how this will work out.

use 2examples.

family a-married couple man working mum at home.
man low income so they did get child tax credits, cb
inaddition to housing benefit and council tax relief.

so mans on 18k gross.
he then gets £1000+month benefits on top as hes low income.
he then gets newt amount same as someone on 38k gross.
I know this as know couple who get this and my oh used to earn 38k gross which is about £2300 net a month.
yes the mans paying tax and ni on his 18k but suspect hes getting more back from benefits than what hes paid?

family 2 single mum-so pays no credit no limits to work.

so she takes 6-12hour job

shes under the tax threshhold income tax,
You have to work min 16hours to pay ni contributions.
but gets free 8hours childcare to help her to work.

I dont feel they penalising women per say.

But do feel like they penalising middle incomes who soon will be entitled to no tax relief, no benefits yet they paying lots of tax and ni and everythings rising it feels unfair.

Watching question time on how pensioners should be protected is cheesing me off a bit.

I have bee working mum and a sahm mum

I do think choice is important.

you cant force people back to work if there are no jobs or they cant afford childcare.

Right now cant see and solutions agree benefit bills to high needs to be trimmed but they unfairness is awful.