30 hours free childcare- means tested?!

[bingbongbang23]

Sure I will get blasted, but I only just realised that the 30hr free childcare is means tested. I have paid full price for my child for past 2 years- at a whopping £1240 a month, but it is what it is.

Selfishly, i was so looking forward to her turning 3 and getting the free hours. Would be a massive help with mortgage going up. However I don't qualify. And it is not a sliding scale, I don't qualify for anything. So I would actually be better off reducing hours so I would qualify for the free hours- in what world should that be the case?! Makes no sense to me!

Someone earning £99k isn’t an “imprudent moocher” but they’re eligible for the childcare funding. If £100k + earners are the top 5%, then not everyone (95% of the working population) earning under that is a moocher.

I do earn the golden MN ‘six figure salary’ but my income is decent and I don’t begrudge those eligible for benefits I am not. So many high earners think they’re hard working and deserving. I do work hard but I don’t think I deserve Universal Credit because I know many people on minimum wage jobs probably have it much harder than I do!

I would be embarrassed to whine about things like this if I earned as much as some people on here do. In the same way, I wouldn’t whine about the cold weather payment. How utterly classless.

@poorlypoppet in my experience is worse than than 11% as there's usually a bonus. For me the difference earning over £100k would be about 20% of my average monthly salary just on childcare alone and I'd get less of the bonus too which I usually use to replenish savings.

I think a lot of the issue is that 20 years ago £100k may have been a fabulous salary, but the way the cost of everything is going it doesn't stretch. Salary matters a lot less than wealth now. For example, I literally bought the cheapest family home in the local area and still have a massive mortgage but people even 10 years ahead of me could have the same home for half the money so way more disposable income. No idea what's going to happen to the people 10 years behind or what wage they'll need to have hope of a reasonable standard of living.

Article in the Guardian today reporting on research from the New Economics Foundation that says richer households will benefit from the childcare plans, only 12% of poorer families will have access to 30hours compared with 68% of families in the top 30% of earners.

What is the explanation for this out of curiosity?

Is the argument that the new 30 hours scheme is unsustainable and therefore nurseries will be more inclined to take private paying parents who are not claiming the 30 hours? Otherwise I can't see how family income would make any difference with 2 sets of parents both claiming the 30 hours from the government.

I think it's primarily because poorer households are less likely to meet the requirement for both parents to be working enough.

Yes it's because the scheme has a minimum income threshold as well as maximum income cut off and the poorer families are less likely to be working enough hours (16x minimum wage per week) for both parents (or one in a single parent household).

@Teder

"I would be embarrassed to whine about things like this if I earned as much as some people on here do. In the same way, I wouldn’t whine about the cold weather payment. How utterly classless."

The OP will lose several thousand pounds of take home pay because she hits the £100k 'cliff edge'.

Why work to earn £101,000, if you are going to better off to the tune of several thousand pounds to earn £99,000?

This is a well known flaw in the tax system, and it is entirely reasonable for OP to ensure her family is not worse off as a result of this cliff-edge.

You equate working hard with earning over 100k? Plenty of people work their fingers to the bone and earn minimum wage, I think they need the free childcare more than you! Your post just proves to me that you dont have to be intelligent to garner a high salary, you've been relying on something coming into play but didnt research the eligibility.

I’m sure if someone is intelligent enough to earn a 6 figure salary, they’re intelligent enough to ask for financial planning advice. That’s a very different tone to some of the posts on here!

The OP never said she thought she should get it over someone earning minimum wage. she's saying that removing it on a cliff edge rather than tapering it is ridiculous which it is. If you have two kids you suddenly lose 60 hours of free childcare and £4k tax free account money. So if you are earning between £100-150k you actually end up with take home pay lower than someone earning £99k which makes zero sense. Stop putting words in people's mouths. It may be a tad crass to complain about it but some people it can result in major issues.

Imagine you are a parent earning £100k whilst your partner earns 20k. you have two young kids. Your total take-home pay is £6900. You have two children in full time nursery at £3000 in total leaving you with a total take home of £3900. Mortgage is now probably over £2000 a month (mortgage of 450k or a 600k house), travel to work £240, council tax £250 a month, bills and gas £150 a months etc. Leave 1k a month for EVERYTHING else - food, clothes days out with the kids, tv, holidays, repairs to the home etc not exactly living the high life on that?

Compared to someone earning 90k and their partner earning 30k = same initial income. Total take home pay = £6940 (so actually a slightly higher take home pay). but they can 60 hours free childcare. so they have an additional 2k per month to spend. The design makes no sense.

You can also have both parents earning £99k and get it but one parent earning 100k and other earning 20k doesn't.

Haven't read the whole thread but OP have you looked at the small print? I think it's adjusted net income so you don't include pension contributions or charitable donations. Could you put more into your pension and do some direct charity debits? I think this is what we will do (actually already do).
It is a stupid system and penalises couples like us where one of you earns just over 100k and one of you about 20k! I am public sector as well so you would have thought it would be good if I was incentivised to work!

As a side note I'd be completely fine with a cut off just should be combined income. One income seems quite sexist as its usually women who are the lower earners and take time out of work.