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?

A pay rise is forever, childcare costs are not.

1. you'll be better off financially once you stop paying for childcare and he still has his pay rise.

2. there are going to be major government spending cuts, to fund the cost of the pandemic. Government subsidised childcare could very well be a victim of that so don't rely on getting your free 30 hours forever.

£100k in the SE with two children just isn't that much and doesn't stretch as far as you think. The OP is right to work out/ask what is financially best for her family.

I don’t get it.

If you already pay £14k on his current salary

And his payrise after tax will be an extra £20k

Then that more than covers the additional £14k you’d have to pay without the free hours.

When you add in that you might still get 15 hours free so the additional could be less than £14k - even better.

You might not want to lose out on that money in the short term, but in the long term his pay rise will mean more than what goes into your bank accounts. If he chooses to change jobs, for example, he can negotiate a higher salary based on his previous one. The childcare issue is short term and I think it would be silly not to accept the pay rise. Would you accept a similar pay rise if it was offered to you?

Also, I haven't seen this mentioned yet but as part of his negotiations he could always discuss childcare vouchers. He could say yes to the pay rise, or perhaps maybe slightly less, and see what they can do about childcare for him on top of that. They will see that as a short term benefit for them, as they will see clearly that childcare will not last forever and they'll want him there for the long term. So it's worth him throwing that in there as part of his bargaining.

Clearly he should take it and then pay more into his pension to ensure he remains under the threshold, if at all possible. Anyone who thinks that people don't usually look for ways not to be worse off when they hit bottlenecks is woefully naïve.

wealthy and successful people trying to figure out how to manipulate things so as to extract every last benefit from the state

or: trying to figure out if they are at least eligible for one benefit considering they pay almost half their salary in taxes.

I believe from 100k you are not eligible for anything (child benefit, childcare vouchers, tax credits, etc) the only thing left if the free 15h childcare, which I understand are offered for socialization/child development. Why wouldn't people check if they can claim them??

You need to check he is definitely over the threshold. And work out the increase (not the total amount) in childcare costs if he is over. If you will be worse off then he should a) ask for more money explaining the reason why and if that is refused then b) accept the pay rise but negotiate a reduction in hours (maybe an afternoon off and have the morning WFH?) to take him below the threshold again (will reduce your childcare costs as well) and only if his company refuse to do one of those then look at deductions to take him below the threshold.

Don't know why you are getting all the moral outrage, people at every level work try to minimise tax and maximise income. It is no different to having a pension or saving into an ISA or working PT.

It is just the way that it is - we have had payrises make us worse off in the short term over the years but that is just the way that it is.

But if you are over the 100k threshold then yes you can afford it you just need to work out childcare vouchers and the 15 free hours because otherwise you are earning just under the threshold and taking money from the state you dont need

This is a no brainer. Definitely take the pay rise and put the extra into his pension so you can still claim childcare.

If he doesn't take the pay rise - there is no guarantee he will get a pay rise in future years and the pay rise will also help him just in case he starts job hunting in the next few years.

You are thinking from a lack perspective, like it's the last time ever he's getting a raise, refusing this raise will mean he'll have to refuse all subsequent raises until you don't need that free childcare anymore.

Are you saying you are both happy with his career stunting and not being able to move further up, make even more? Next year he might get another raise, or be offered an amazing new job. The only way is up.

Explain the situation and ask for higher rise to cover your loss. Do it with confidence and they probably won't even blink.

Otherwise I'd take the offered rise anyway. You'll be enjoying it for many years after the DC's are past nursery school.

Could he negotiate part pay rise and part increased annual leave?

People on minimum wage will be contributing to your childcare costs! That you can afford but would rather not pay for. What a problem to have, how to scam the system into paying for your childcare costs. And, there are so many wide eyed followers “who are advising”.

Its not scamming. You confuse scam with behaviour you disapprove of.

or: trying to figure out if they are at least eligible for one benefit considering they pay almost half their salary in taxes.

No they don't .

www.thesalarycalculator.co.uk/salary.php#graph-modal

Has the OP confirmed that her DH will be taking home 100k?

Why don't the people complaining about 'rich' people getting benefits actually DO something and stop voting Tory?

You are yourselves to blame for the benefit system. Not the people who are legally and correctly claiming the benefits that the Government have chosen to make available.

You chose this.

If your currently paying 14k a year but with dh wage rise would be paying 28k. This is only an extra 14k
With his wage rise of 20k you’d cover the 14k difference and have 6k extra yearly? Surely??

Haffiana yeah, we've never voted Tory.

Haffiana yeah, we've never voted Tory

Was going to say if your bloke can save his firm so much moolah he ought to be running his own business!

@fortunatefamiliar is your DH pay rise taking him over 100k?

I am confused, surely you won't need the 30 hours free childcare forever but you will need your husbands salary? If he takes the pay rise his salary goes up from there.

If I was in your position, I’d tell your DH to ask for a smaller pay rise and an extra weeks annual leave.