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?

AnyFucker I'm not coming across innocent. I'm honestly surprised that a payrise can leave you worse off. And I think it's wrong that 2 people can earn 99k (£198k total) and still get funded child care but if one person earns 101k and the other 1k (£102k total) and they wouldn't. It's genuinely bonkers!

@AnyFucker

It's not about it "not being her worth working"

Unless childcare should solely be paid by females ? It is a joint cost and one that the whole family meets to preserve both their careers. That's what we did anyway. It's only for a few years, and reaps benefits later in ongoing earning/career potential. For both of you.

The "not worth her working" thing is all over mumsnet, childcare costs are a huge factor in women not returning to work. For what its worth, I agree with you. I've worked throughout having kids and I would strongly encourage women to do it as a matter of course.

If i were making government policy, however, I would base it on people's demonstrated behaviour not what I would prefer them to do

@fortunatefamiliar

Alsohuman I live your level of optimism that what I don't get will be given to someone else! You realise that it doesn't work like that right? More over what isn't used is removed from circulation.

I know exactly how the taxation system works, thank you. It’s your playing it I object to. I’m actually really angry about this. It totally illustrates how completely ridiculous public finances have become. The entire system needs a total overhaul.

MN is fast enough to condemn fraudulent benefit claimants but it appears to be absolutely fine for the more affluent to manipulate the system to wring the most they can out of it.

I think OP has got her question answered so this convo doesn’t need to turn into a bitch fest like most the other threads nowadays on MN

@fortunatefamiliar that’s brilliant!! Well done to your husband.

I'm in a similar position with a lower tax band- into the 40% one so my childcare vouchers halve, but because I'm not far into the tax band, I'll end up worse off for the next couple of years until I'm further into the band.

I'll be buying a really nice bike on the cycle to work scheme and doing voluntary contributions to my pension to bring my pre tax salary back down.

These sudden cliff edge drops in benefits/childcare allowances are daft.

When I saw the amount you would have to pay per month for nursery I was flabbergasted. My 2 aren’t there yet, scary prices!! But then I worked out your monthly income & you can more than afford it.

I know it seems a bit shit to be losing out now, but you have said yourself you CAN afford it & in 3 years will be significantly better off for it. He’d be crazy to turn it down!!

This is the opinion of someone who will sneak my 3yo in as an under 2 for as long as humanly possible

Nice problem to have.

Chartered tax adviser here. Accept the pay rise and put enough into his pension to stay under the £100k.

This is what my husband does. I work part time instead - if I worked full time I would earn less net than I do on a part time contract due to loss of tax free childcare and 30 hours funding, the 60% effective tax rate for earnings over £100k etc. Cliff edges in the tax system work like that, that's why it's a bad idea.

It's explained well here (no connection to me)

www.hbaccountants.co.uk/60-tax-risk-on-your-bonus/

MN is fast enough to condemn fraudulent benefit claimants but it appears to be absolutely fine for the more affluent to manipulate the system to wring the most they can out of it.

The ‘more affluent’ probably have extortionate mortgages and two lots of nursery fees are eye wateringly expensive. You really don’t get much left after those big expenses. After nursery fees drop off they’ll be laughing but it doesn’t mean they don’t need help in the meantime.

Plenty of posters on here are open about the fact they can’t afford to work so rely on benefits to look after their children. There are plenty of working parents with ‘decent’ salaries that really do struggle to meet the costs.

MN is fast enough to condemn fraudulent benefit claimants but it appears to be absolutely fine for the more affluent to manipulate the system to wring the most they can out of it.

Is it? Whenever there is threads about benefit cheats posters are told to mind their own business & not be nasty.

There were threads on the changes to IR35 & posters were not getting dragged like the OP.

@fortunatefamiliar

SantanaBinLorry why won't I have childcare to pay in 3 years? That's a bonkers claim.

I've paid in far, far more tax than I have taken out. And we will continue to do so. I pay for those not working, those working but claiming UC. I have absolutely no issue with a society which has a benefits system. I think our current benefits systems is pitiful, and would happily pay increased tax for more benefits, even if they aren't benefits directly to us. However I do begrudge a system where you become worse off at certain salary points - whether it is when you lose eligibility for CTC or UC or a situation like ours. There should be a sliding scale, where you are only ever the same off, or better and never worse off, otherwise it creates issues like these.

To be honest I think you can afford it you would just prefer not to pay from your own pocket. For a “standard NHS worker” as you put it I’m not sure how you have come to the conclusion that you have paid more tax in the pot than anyone else. Let’s be blunt OP you have a good combined income. Of course there is a cut off point for CTC you don’t expect to get it on top of a perfectly good salary.

This post was really shitty OP

There are families out there struggling to pay their bills and keep a roof over their kids head right now and you are here covert gloating about how rich you are now.

This is ridiculous, I mean where do you draw the line? Can people discuss holidays, house renovations, talk about getting their 5 a day?

Am I meant to feel sorry for a couple who earn over 100k? Why shouldn't you be paying for your own childcare? I am surprised it's so high in the first place. That is a way to save this country money.

The ‘more affluent’ probably have extortionate mortgages and two lots of nursery fees are eye wateringly expensive

The less affluent probably pay extortionate rents. If you choose not to pay two lots of nursery fees - because that’s what this about, not can’t pay them, don’t want to - then don’t have two children of nursery age.

100k is 5.5 a month take home. Full time nursery fees are around 3k. Most people with recently purchased homes in the SE are paying 1.5k plus a month so that leaves 1k for two lots of commuting costs (normally a couple of hundred each) and all other living expenses. You can’t do it. I wouldn’t suggest anybody sympathize with such a situation but it really isn’t living it up. We want to encourage women to keep their careers so I think subsided childcare is fair enough.

The cost of living is just so ridiculously high!

Do you object to paid maternity leave as well? Like it or lump it, it is an investment rather than just a cost. There are many (well paid) families that are in the edge of not working because of childcare costs. It is in the government’s interest to keep them working. There are many other areas of expenditure you can criticise but I’m surprised on a parenting forum subsidised childcare is one of them. I’d argue it should be higher and nursery staff are paid more but that is by the by.

In the OPs case, her questions have arisen because the £100k threshold has been really badly designed. Most people (whatever their income) have a self preservation instinct. You see the same questions around the child benefit threshold.

Amazon only paid £220 million in tax last year despite revenue of £10.9 billion. I can’t believe people are seriously comparing OP to huge tax-dodging corporations and calling her a scrounger.

OP and her husband pay/certainly will pay proportionately a lot of tax. They are (most likely, I don’t know their situation so I’m guessing) net contributors to the economy. They aren’t depriving old people of heating or anyone of benefits.

The UK is one of the least family friendly economies in the OECD according to Unicef Rather than being outraged that OP wants to retain her free childcare and education despite her high household earnings we should all be furious that there isn’t high quality affordable childcare available for all British children, regardless of circumstances.

Rather than being outraged that OP wants to retain her free childcare and education despite her high household earnings we should all be furious that there isn’t high quality affordable childcare available for all British children, regardless of circumstances.

Indeed

I don’t want to be ‘that person’ (although I am going to be)... but my husband has just been made redundant, I work 3 days per week in a mid-band 6 NHS role, am pregnant with our second child so will shortly be on mat leave, and other than Jobseeker’s Allowance for DH we are entitled to absolutely fuck all. Nothing in the way of childcare costs, nothing in the way of universal credit... the only reason we won’t lose our house is that my PIL would rather pay our mortgage than see us homeless.

I am flabbergasted that you are so desperate for the system to work so well in your favour tbh.

Having been in a position twice before where a pay rise will make me 'worse off' I've alway taken they pay rise and found other ways to make my money work better for me.

In your situation the government could change the threshold tomorrow or the care your kids need cold change.

@Stripeytopgirl

When I saw the amount you would have to pay per month for nursery I was flabbergasted. My 2 aren’t there yet, scary prices!! But then I worked out your monthly income & you can more than afford it.

I know it seems a bit shit to be losing out now, but you have said yourself you CAN afford it & in 3 years will be significantly better off for it. He’d be crazy to turn it down!!

This is the opinion of someone who will sneak my 3yo in as an under 2 for as long as humanly possible

So you've worked out the income but have no idea about their other expenditures. £100k a year is hardly rich in many areas, depending where the OP lives their mortgage might be £3000+ a month.

The jealousy on this thread is pretty gross tbh. Someone comes and asked a question and just gets snide comments about covert bragging, £100k a year is nothing to brag about it's middle class, hardly royalty.

@Stripeytopgirl

When I saw the amount you would have to pay per month for nursery I was flabbergasted. My 2 aren’t there yet, scary prices!! But then I worked out your monthly income & you can more than afford it.

I know it seems a bit shit to be losing out now, but you have said yourself you CAN afford it & in 3 years will be significantly better off for it. He’d be crazy to turn it down!!

This is the opinion of someone who will sneak my 3yo in as an under 2 for as long as humanly possible

So you've worked out the income but have no idea about their other expenditures. £100k a year is hardly rich in many areas, depending where the OP lives their mortgage might be £3000+ a month.

The jealousy on this thread is pretty gross tbh. Someone comes and asked a question and just gets snide comments about covert bragging, £100k a year is nothing to brag about it's middle class, hardly royalty.

Sure, OP should be taking the hit. That said, it's a strange threshold that encourages this kind of crappy thinking.

A couple with two people on £90k would take home £125k after tax/NI and get 30 free hours. Their next door neighbours on £100k and £30k would take home £90k, but only get 15 free hours, even though their income is £35,000 a year less.

Of course both these couples are very well off. But if the aim is to incentivise people to stay in work, then the lower earning partner in the second scenario might still be in a position where they could be nearly equally well off with her (it's usually her) staying at home.

If the aim was not to subsidise the children of the wealthy (which I fully support) then it should have been on family income like so many others.