To think that childcare costs should come out of pre tax income?

[Geraldinethegiraffe]

I know many mothers who say that after paying for childcare they pretty much break even.
Some of them end up being SAHMs because of this. Or their partners put pressure on them because they earn less than childcare costs.
So why can’t childcare cost come out of pre tax income as a work enabler? Some other countries do this.

Yeah, it’s called Mothers At Home @PacifyLulu, I’m not involved in it so you would have to take it up with them about mothers vs parents.

YABU - plenty of people have been talking about this stuff for years. Funnily enough, nobody is that interested until their PFB tunns up. By now a lot of us have moved on and are worrying about our pensions. Where do you stand in that?

If your employer has a workplace nursery then you should be able to use salary sacrifice to pay for it. That’s pre-tax.

The main issue we had with tax free childcare is that you both need to be working to claim it. DH lost his job due to the pandemic. He was out of work for months but we had to keep paying childcare costs because we needed to keep DS's place for when he got back into work. He's working now but it really was crippling.

Agree @mindutopia - there does have to be some personal responsibility! Twins/multiple births excepted, of course.

I’m don’t imagine the state pension will pay for much so I won’t be relying on it.
I’m not too worried about the future work force being dependent on birth rates. If the country needs more workers then immigration will relax.

Sorry, that was to @RedMarauder

@Mylittlesandwich

The main issue we had with tax free childcare is that you both need to be working to claim it. DH lost his job due to the pandemic. He was out of work for months but we had to keep paying childcare costs because we needed to keep DS's place for when he got back into work. He's working now but it really was crippling.

oh crikey - thats awful...

when i read the first bit i thought "well why would you need childcare if you are not both working" but then it made sense. I dont know the answer to that one - its a rubbish system

I think all parents should be given the same and then if you want to spend it on childcare you can.
15 hours or whatever free and then you pay the rest, out of your gross salary. The only fair way to means test.
We hear all the time how government can't fund lifestyle choices.
I think that applies to everyone not particularly those that work.

Just playing around with some numbers- let's say you were on £50k a year and needed to pay a nanny or child carer someone £10 per hour to look after your child / children for the same hours you worked then you would need a salary increase of £35k to £85k to pay what is effectively £19.5 k to the nanny / child carer and still be on the same income.

To get to the £19.5k you would pay £15k tax and pension contributions on this additional income (of £35k) and the nanny would also pay £3k tax. So there is a double taxation on the original income. Or put another way to pay a nanny or child carer £19.5 k a year means a total income tax of £18k has been paid to the Government or an income tax rate of 92%.

I think this is right.

I’d rather see child benefit for every child than this.

I’m so lucky that I have access to a workplace nursery that treats nursery fees as salary sacrifice so mine do come off my pre tax income.

It’s the reason we could afford a second child tbh. It really does make a massive difference.

@1dayatatime I'm in London and the people I know who have or have had nannies have at least one parent earning over 100K - and not always the male partner - and at least 3 children. (I'm excluding the handful of people I know who are super rich.)

If people have one or two children they tend to use nurseries and childminders, as it means they don't have to employ someone.

@5zeds Being someone who likes education I rather some of the babies/toddlers I know and know off are given funded early years childcare spaces.

It's better long term for society than giving well-paid parents child benefit.

@Atalantea there are some benefits that would have allowed assistance with childcare but we don't qualify for any of them. We're in that bracket of earning too much to get help but not earning enough to not need any. DHs family stepped in a couple of times to help us with nursery costs when we just didn't have the money. Having him in nursery was handy as it gave DH a couple of days to job search and go to interviews without us having to worry about childcare but it really was a stretch.

Lots of interesting points made - Won’t be able to address them one by one.

My reaction to the overall sentiment expressed in this chat is that I now understand much better why the UK is among the worst ranked countries on family friendly policies.

www.unicef.org/press-releases/sweden-norway-iceland-and-estonia-rank-highest-family-friendly-policies-oecd-and-eu

Even on mumsnet there seems to be very little appetite to support families better.

If this thread is representative we can just assume that on average people in the UK are ok with our population declining and a shrinking minority of young people bearing the brunt of paying taxes and caring for the elderly in 20-30 years.

As a person who could do my job anywhere in the world (mostly online) this does not make me keen to raise my family here.

Re pensions: totally different topic but since this came up I absolutely think anything other than defined contribution is going to be unaffordable for generations to come. So any measures to encourage women to save more are good in my view. That said, not sure this is particularly relevant to the childcare topic

Love how threads always turn into finding reasons to subsidise London living costs.

I dont think tax free stuff helps lower earners as much as other types of schemes for childcare and presumably people saying childcare costs are more than or very similar to their salary tend to be earning smaller amounts. Remember the 20% is only on the bit of their earnings over the personal allowance anyway which is a bigger chunk of their total earnings. Its better than nothing obviously.

if you use the workplace nursery scheme then the savings are much higher than the tax free childcare but obviously only applies if the child is in nursery not other types of care

www.enjoybenefits.co.uk/staff-benefits-savings/workplace-nursery-benefit

OP - where do you think you’d rather live and raise your family (that you’d get a visa)?

My employer provides a workplace nursery and offers a salary sacrifice scheme to take fees from pre-tax salary. It's still eye-wateringly expensive, but less than the private nurseries in our area, and it's good for staff retention.

@geraldinethegiraffe I think some are realising that the solution to an ever-increasing elderly population can't just be more babies - because those babies, in turn, will become an even larger elderly population. We need better solutions such as immigration.

I'm in favour of increasing measures that tackle child poverty and equalise men and women in the workplace, but I can well understand why some aren't keen on the idea of financially encouraging childbirth, given population issues/climate change etc.

The government does pay 20% but up to £500 per quarter! Need to remember this when doing the monthly calculations!

@PacifyLulu I would consider moving to Scandinavia, Germany, Portugal, Italy or Canada… all places which we as a family don’t need visas for because my husband is not british.

@trixies totally with you on not wanting MORE births. But keeping births+immigration at population replacement level is pretty important if we don’t want to saddle future generations with massive economic and social issues.
If we want to minimise our environmental impact we can start by changing the way we consume, not by making it increasingly difficult for average families to live well!

So my thoughts are your choice to have children, there are already tax free childcare etc, why should there be more

You don’t have to have children, it’s a lifestyle choice