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?

I am still puzzled as to why childcare subsidies taper off so abruptly for higher earning women,

Indeed! There is so much talk about it ‘paying to work’ for UC claimants or those on tax credits (for now), but when a higher earner ends up paying the majority of their salary on childcare costs it’s let them eat cake. Who wants to do a stressful job that you have to train for years for to actually receive so little for it? Many other European countries have far more progressive attitudes to women working and having good careers.

I am still puzzled as to why childcare subsidies taper off so abruptly for higher earning women

I'm not sure the subsidies are different for higher earning women than they are for higher earning men!

There was a thread on here about the cost of nursery not long ago. Our £67 per day was definitely at the lower end! It's the cheapest around here by about £10 a day.

I feel ya, OP. It's a couple of years off but we'll be in the same situation.

I'd up pension contributions if possible to bring you below the tax threshold. If you don't take it, once your kids are in school you'll be earning £20k less pa. Might be worth the short term hit.

I'm not sure the subsidies are different for higher earning women than they are for higher earning men!
Well - on paper, yes. But - in my experience - extra childcare costs after the maternity leave are usually compared against the mother's salary, as both are "incremental" at that point. It should not be the case, but it is quite common, I think.
And I am probably blinkered by my own situation. I am a single parent, a professional in an area where there is a lot of feel-good noise about encouraging women, with a lot of funding thrown now specifically at female-centered programmes. I am on a good salary and yet my childcare cost for two school aged kids are more than my mortgage, and I have just finished paying off debt incurred for pre-school years. My exH is not considered responsible for any of the childcare costs - it was dismissed by the court as frivolous lifestyle expense. Until that changes, high-paying careers for women often come on an "impossible" difficulty setting.

Yes, everyone loves to advocate for women in work and the government comes up with fairly useless policies like gender pay gap reporting but when it comes to tackling the real life day to day issues that actually impact on the decision to continue working after having children, they’re not interested. I wrote to the government about the 100k cut off and how it impacts both high earning women (who often need more comprehensive or flexible childcare, which costs more) and low earning women who are spouses of high earners. The response was you can afford it so pay it. I think they also reported me to the tax free childcare body because I then got questioned over my income (I still qualified for TFC at that time).

Fair amount of envy in this thread.
*
Of course it's not unreasonable to not want to be materially WORSE off from receiving a pay rise.

Some people, honestly.*

It's not unreasonable to point out wealth when it's obvious , either. That doesn't necessarily equate to envy.

Only about 155k women in the UK earn over 100k so there are definitely still barriers.

I am still puzzled as to why childcare subsidies taper off so abruptly for higher earning women,

The rules are the same whether man or woman.

But, yes, all these "cliff edges" in the tax system are very damaging and unfair. At the very least, it should be tapered away, but even that is damaging - just look at the 62% marginal tax rate on income between £100-£125k when highest rate tax is "only" 45% on income over £150k. The whole tax system is a shambles and despite promises to simplify it for the last 25 years, it just gets more and more complex and unfair.

Fair amount of envy in this thread.

And? So what? Someone on an average income being envious of someone on a top 5% income does not mean their opinion on wage and wealth inequality is meaningless.

And? So what? Someone on an average income being envious of someone on a top 5% income does not mean their opinion on wage and wealth inequality is meaningless.

Except if their ‘opinion’ is merely kicking off out of envy. The OP didn’t ask if she was being unreasonable to have more money than some other people.

OP have you considered looking at au pairs?

Might work out cheaper for your family

"otherwise the childcare would essentially eat my salary and make it not worth me working. "

I just don't get your logic. The Childcare increase is covered by your DH wage rise. (which as many have said he can salary sacrifice). So if it is worth you working now it will still be worth you working. You just won't be feeling luxuriously rich because of the payrise.

Your childcare needs at this level will be for a short time, his salaries will increase.

But yeah, tbh, are you diamond shoes rubbing? This isn't the "squeezed middle". Your household income is 3 x national average.

The company essentially want to buy the work DH has done, in addition to a pay rise

Hang on, OP - they don't already own the work their employees have done in the course of their employment?

If they're saying your DH somehow owns the IP in this work that has saved the company thousands of pounds, it's clear that the reason they want to pay him for it is to obtain the exclusive rights to it (to prevent competitors getting hold of it, to avoid having to profit-share with DH or because someone has advised them to tie up this supposedly loose end).

It still strikes me as bizarre that they're under the impression they don't already own his work if he produced it in the course of his employment, but they're obviously worried about not owning it so it's definitely worth investigating further before doing anything.

I would look over his employment contract and talk to an Intellectual Property lawyer before signing anything or accepting any money from them - you and DH might be signing away a potentially lucrative piece of IP that would mean you never have to worry about nursery fees again!

*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*

Your attitude gets me too. £100k isn't so much money you don't know what to do with it. By the time you have paid a mortgage and childcare etc. you don't have tonnes left over.

It's really terrible that being in a position where you weigh up accepting a pay rise or you end up worse off. I hate the notion of removing things from people that have worked hard.

Except if their ‘opinion’ is merely kicking off out of envy.

Why the quotes? Is opinion not the right word? Is there a better one to use?

It's neat little get out, this point of view- oh, no, there can be no substance to what you think, you're just envious and therefore what you think is irrelevant, your opinion can only be motivated by spite, we don't have to listen to it, you're merely kicking off out of envy. Sure. Keep telling yourself that.

The OP didn’t ask if she was being unreasonable to have more money than some other people.
Last time I read the Talk Guidelines there was no mention of a rule that responses in a thread could only be direct answers to questions the OP had asked, but if they have been updated to say so I am sure MNHQ will remove all offending replies from the thread.

I hate the notion of removing things from people that have worked hard.

I hate the assumption that only the wealthy work hard.

@makingmammaries

And? So what? Someone on an average income being envious of someone on a top 5% income does not mean their opinion on wage and wealth inequality is meaningless.

Except if their ‘opinion’ is merely kicking off out of envy. The OP didn’t ask if she was being unreasonable to have more money than some other people.

No she asked if she should maximise her state subsidy, partly paid for by people much less affluent than she is. .

Anyone at the lower end of the income scale will be net beneficiaries of tax, not net contributors, and therefore would not be ‘partly paying’ for the OP’s childcare subsidy. The OP’s family will most likely be net contributors to the tax system over their lifetime and therefore will be covering this subsidy as well as contributing to the support of net beneficiaries.

It’s entirely misleading to say the subsidy would be partly paid for by people much less affluent than she is.

No it isn’t.

Hi OP! Sorry, Mumsnet doesn't like high earners, but woe anyone not having 6 months' salary stashed away for leaner times

I agree you need to look at this longer term and make sure your figures are right. I'd calculate your total childcare costs for the next two or three years (until both DC are at school), assuming you get 30 hours free on DH's old income (you can get tax free childcare until they're 11). I'd then redo these calculations but assuming you only get 15 hours free per DC, no tax free childcare (same salary cut off) but with DH's higher income. You might be surprised at how it works out.

The OP was badly written and unnecessarily goady but nevertheless it’s not unreasonable to be upset at being subjected to a flaw in the tax system. The fact that £100-£125k earners pay a higher rate of tax than anyone else (even those who earn more) is unfair and that’s even before you take the childcare into account which can see you worse off (30 free hours and the loss of tax free childcare for both partners).

Some of the replies here have been really unpleasant. Many posters are forgetting that high earners contribute to the economy in many ways - through tax, through spending - and so it is in the interests of everyone that individuals are not put off earning at this level because they would be worse off than if they earned less.

I have nothing against high earners and fwiw I don't think the OP is in any way UR- it is the people in this thread who want to pretend that the OP's household income is not very high that bother me, and the people who think that not being rich means any opinion you express on wage and wealth inequality and state responses to it is just nastiness and jealousy.

Some of the replies here have been really unpleasant. Many posters are forgetting that high earners contribute to the economy in many ways - through tax, through spending - and so it is in the interests of everyone that individuals are not put off earning at this level because they would be worse off than if they earned less.

It's also bad for society if some higher earners (such as GPs and dentists) reduce their working hours to bring their earnings back under the £100k threshold. Regardless of tax revenue, that just makes accessing medical treatment harder due to shortage of doctors/dentists!

@Alsohuman so do you disagree with everyone who lowers their taxable income &/or off-sets it?