to think it's bonkers but also not to turn down this pay rise

[fortunatefamiliar]

Name changed as I will likely get flamed.

DH and I have a very good household income, I am not denying that. DH is in a sector which pays well and thankfully has not seen a covid-related downturn. (I'm public sector but in a good job).

He was due a payrise in April but they deferred them due to covid, very understandable. As it happens their sector has been largely unhit and so payrises are now being discussed. DH has been offered a very large payrise as during COVID he did a really big piece of work which has saved the company hundreds of thousands over the next few years (company has a multimillion pound turn over) - he came up with the idea, in his own time did a demo to show it could work and then supported his team to get it up and running. He definitely deserves the payrise.

BUT

if he takes it it, it means we will no longer be eligible for DSs 30 free hours and DD won't get hers next year when she becomes eligible. After tax, the payrise will not cover the nursery expenses of the 2 children and we will therefore be worse off.

This seems like absolute madness! But it will cost us around £30k in 3 years, and the payrise will be just shy of that over than time period (after tax).

I've suggested to DH that he counter offers for a LOWER rise, which will put him just below the threshold for the free hours. This is still a good rise.

The alternative is to ask for a rise that will cover the loss of the 30 free hours, but this is quite a bit more, taking in to consideration tax.

It seems like a totally bonkers situation to be in (5 years ago we were scraping money together to pay the bills!) but can anyone else an issue with rejecting a payrise?

Didn't mean to enable voting.

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If he is in a salary sacrifice pension take the rise and increase the amount that goes into the pension to stay under the threshold.

I don't know but I'm impressed how often you managed to make it clear that you are both v rich and successful.

What boing says.

Either negotiate higher to cover tax or salary sacrifice for the 3 years of childcare.

Does that essentially mean that rather than paying for your own childcare which you can afford, you will be receiving funding from the government to cover your childcare? I'm a bit out of touch with this as my kids are teenagers now. However if I'm correct, why would you take money which you could do without?

It's adjusted net income, so pay extra into pension or make some tax-deductible charity donations to bring his income under the threshold.

CloudsCoveredTheSky I wouldn't describe us as rich! I'm a bog standard NHS worker. I'm actually a bit flabberghasted by all this. We both come from very working class roots and wouldn't in a million years have ever though this would be something we would need to consider.

Get your tin hat on OP. There is a thread on here where an OP is getting flamed for asking if she should sneak her 3YO into an attraction for the day as a 2YO to save a few quid. You're going to get roasted for trying to get £30k out of the government when you could more than easily afford it yourselves.

He can overpay into his pension to keep his income under £100k and you will still be eligible for the 30 hours.

You'll still get the 15 free hours, I presume?
I'd ask for the lower rise.

First, does that mean he'll turn down all payrises, extra bonus etc for the next 3 years and stick at the same level? That would be an odd thing to do and you'll likely end up worse off and leave his bosses purplexed.

Second, this is a very insensitive post, as to be in this situation you are netting over £100k pa. Have you noticed lots of people have lost their jobs? I'm sure you can make a decision on this without Mumsnet's help

Isn't the 15 hours offering universal? Check your sums! £30k is an insane amount for nursery....
www.gov.uk/help-with-childcare-costs/free-childcare-and-education-for-2-to-4-year-olds

Salary sacrifice pension is a good solution too if you are only just over.

Sorry, but there just seems to be something slightly morally reprehensible about comparatively wealthy and successful people trying to figure out how to manipulate things so as to extract every last benefit from the state. You would no longer need free hours because you could, you know, pay for your child yourself.

Sorry, but this sort of attitude boils my piss.

Definitely look into the best way of doing it, you'd be daft to make yourself worse off by accepting it. Speak to a financial advisor.

Bairnsmum05 because we do need the childcare subsidising - otherwise the childcare would essentially eat my salary and make it not worth me working. However my mental health needs me to work and his payrise wouldn't cover my loss of income.

I think the technical term, having done a bit of reading, is "squeezed middle" - we'd be worse off (though not by much).

Some good suggestions as to ways this can work. Thanks

Is it a PLC? Could they give him stock?

I am of the opinion that you take the pay rise, then in the future his salary will continue to grow. When your children are no longer in nursery it won’t be an issue.

Would you still qualify for 15 hours?

You are not rich 😆😆😆😆🙄

Why can’t you afford childcare with a100k+ income?

@Calic0 Would you say the same to someone on universal credit returning to work for the optimum amount of hours to max out their benefit and wages? This is no different.

You shouldn't be expected to lose money overall by taking a pay rise.

I think it's stupid for him to tell them he actually thinks he's worth less than the going rate for his contribution to the company. It could affect his negotiating power in future interviews and seems like a very silly and short-sighted thing to do, but only you know the details, industry, etc, OP.

Hercwasonaroll 2 kids, full time nursery is £14k per year WITH the free hours. It'll be double without them.

You don’t have to justify your backgrounds or your earnings to anyone. We don’t get the 30 hours because of my OH salary.

Everyone is entitled to the 15 free hours regardless of their earnings.

Does your OH company have shares? Could he ask for the pay rise to be given In the form of company shares which he could claim in 3 years time?

I agreed with the lady getting her just turned 3 year old into an attraction for free as an under 3 as she was skint. You on the other hand are taking this piss.

Probably. But given as said imaginary benefit claimant isn’t sitting on a six figure household income while thousands are on the bones of their arse, it’s not the fairest analogy in the world.

Take the pay rise. If you can afford childcare you should pay it. And then in three years time you’ll have even more money. And perhaps in line for another pay rise and have even more money.