Childminder pay

[Foxinsocks1]

I know there were a lot of threads about this a few months ago but I’ve not seen anything recently.
We’ve used the same childminder for 10 years, all 3 children went from a year old and now go before and after school 2 days a week and some days in the holidays. When lockdown came in we continued to pay full as mine and my husbands pay us continued to be the same. We are both stable in our employment and so didn’t question paying in full. About 6 weeks ago my SIL who also sends her children there asked CM to pay a reduced rate since not using the service (SIL furloughed). CM said to us we could pay 60% as requested by SIL.
Me and DH said we’d continue to pay full as we haven’t been financially affected and didn’t want CM to be struggling whilst we’re saving.

We’re still financially stable but I’m just wondering now if we should have accepted 60% offer. SIL basically saying we’re stupid for still paying but our rationale is CM said it on 1st June she could open but we chose not to send them as schools still closed and we still haven’t sent them despite 2 of the children now being back at school as we don’t want to mess up the bubble situation.

Also I’m now wonder if CM has done the government grant thing so she herself May have financially benefitted

She probably did qualify for the grant so she will have had that, and will get it again in August.
If everyone had continued to pay 100% then she wouldn't qualify, because you need to state that you have been financially impacted by the virus, but it sounds like not everyone has paid 100%.

Tbh, if everyone has been paying 60% and she gets the grant, then she will have made more money than she would have without the virus. And she wont have the expense of feeding the kids.

The grant was designed so that people like you could reduce or stop payment, and the service provider would still receive a salary so you could have reduced your payments; do you usually use her during the summer holidays? Can you reduce them for that and then go back to normal in the new term?

I think there’s only my SIL reduced payments. The other parent we bumped into and she said she was continuing to pay full.
My children don’t go over the summer so we only have one more month of payment before they will go back. She wants the children back now but school aren’t being helpful as to whether they are actually allowed back.
If she’d said ‘I’m reducing payments as the children aren’t attending and I have received the government grant’ then no problem but she’s not been clear and I don’t like asking.

The grant is designed so that no-one benefits financially, whether self-employed person or client.

The childminder will only qualify for it if her business has been adversely affected and they will be checking. We have to declare this.
So, if she claimed because other clients were furloughed and unable to pay her, then she won't be profiting and she'll be taxed on it anyway.

You won't know unless you know her exact income and finances during this time and it isn't really something that you should worry about. It's between the childminder and the HMRC. I have to say, none of the childminder groups I'm a member of have been talking about profiting from all this: quite the reverse.

For what it's worth, the childminders I know are all incredibly grateful to any client that was able to pay them anything at all. I don't like that someone, who has no idea of her financial situation, is trying to make you feel bad for doing something that may well have meant the difference between re-opening or going out of business.

Thanks @Tanith you’ve really reassured me. At the end of the day we love our CM, she’s gone above and beyond in the past - she looked after 2 of my children whilst I gave birth to DC3 on Boxing Day free of charge as my parents were away, and I wouldn’t want my children going anywhere else which is why we’re willing to pay (and able). I’ll ignore SIL, it’s just hard being called a fool but our conscience is clear. I’ll leave the grant to be between CM and HMRC as you’ve said.

@Tanith

You really arent entirely correct.
The get the grant, your business needs to be adversely affected financially. The grant is 80% of your average earnings, but your business does not need to prove it lost 80% of earnings.
She could have lost 40% of her earning (by clients paying 60%) and then recieved the 80% grant. She ends up with more pay (and yes, she will pay for more tax but it still works out as higher pay).

The grant was a blanket payment. It isnt worked out on how much you have lost; it's just 80%. If she has been earning anything more than 20% from parents continuing to pay, then she will have made more money.

No, you are not correct @BobbieDraper. It has nothing to do with earnings, the grant is 80% of profits.
For most childminders, that's going to be low. Those that make too little to be taxed won't even be entitled to claim.

@Tanith

Childminder's dont have massive overheads.
For people who have large overheads, which come out before profit, the grant barely touches the sides.
Childminder's do not have giant overheads. If they receive a grant of 80% and parents are still paying 60% of fees, then they are not going to be struggling.

The OP feels like she needs to keep paying 100%. She doesnt; the grant is there to step in and provide some income so that parents who are not receiving the service can pay a reduced fee. She shpipsnt be worrying about the childminder having no money because she has access to a grant to cover the loss.

I think if she’s open now, all you’re really doing is paying your retainer until you know your children can return to CM. I think what you did was a lovely thing. Childminders might not have a lot of direct overheads but if they can’t earn they can’t pay their mortgage and then they have to give up their job and can’t provide the service anymore anyway.

@Tanith

Oh, and people earning under the threshold for income tax do qualify for the grant.

OP you did a kind thing, childminders don't make a lot of money, we don't know her situation and if you can afford to still pay whilst your jobs are stable then I'm sure she is really grateful. Even if she is making a little more during COVID for a few months, rest assured she'll be back to making a basic wage pretty soon 🙄 Like you said, a good childminder is worth their weight in gold, it's not worth damaging your relationship now saying actually, we don't want to pay, even though our jobs are stable and you're open but we don't want to send them. Imo.

OP you did a kind thing, childminders don't make a lot of money, we don't know her situation and if you can afford to still pay whilst your jobs are stable then I'm sure she is really grateful. Even if she is making a little more during COVID for a few months, rest assured she'll be back to making a basic wage pretty soon 🙄 Like you said, a good childminder is worth their weight in gold, it's not worth damaging your relationship now saying actually, we don't want to pay, even though our jobs are stable and you're open but we don't want to send them. Imo.

OP did do a kind thing, but she also shouldnt be made to feel guilty if she chooses to take up the offer of paying 60% for the remainder of the term.
She isnt doing anything wrong either way.

I know that having my kids at home has cost me more than having them in school and paying for afterschool care. Paying for subscriptions to home education sites, paying for tutors to do zoom sessions, buying more board games and more garden toys and with libraries closed I ended up ordering £270 of books from Amazon (one if my kids vets through 2 novels a week. The other reads 1 a week).

Having the kids home, despite still earning the same, has cost me more. A reduction in fees from my afterschool care has allowed me to spend a little bit more on things so the kids had a productive and active lockdown. And my childcare provider assured us that with the government support, and us paying reduced fees, they would be able to open fully again afterwards.

I don't feel at all guilty for paying a reduced fee, despite earning the same, because our childcare provider had access to other support.

If she’s open then you should be paying 100% regardless of whether you choose to send your kids in.

If she’s open then you should be paying 100% regardless of whether you choose to send your kids in I agree.

If CM is open and can provide service, parent pays.

If CM is closed and cannot provide service (and claims self-employed grant) parent doesn't pay.

If CM is new and can't claim self-employed grant you might choose to pay something as a retainer.

But generally you don't pay for a service you don't receive.