Should tax-free childcare and ‘free hours’ be universal?

[Nursery772]

Having attempted to apply for the new 15 free hours for my nearly two year old, I discovered you are not eligible if you earn over £100k.

My four year old also receives only 15 of the 30 free hours for the same reason.

I am not sure if the additional 15 hours from 9 months / 2 years will be income contingent.

Between this and tax-free childcare, I will lose about £12,000 of post tax income in 2024/5 tax year.

This seems very onerous!

Should tax-free childcare and ‘free hours’ not be universal? It is an expense to allow me to work, and I’m paying quite a bit of tax.

Also being applied as a cliff edge is brutal, seems to create an artificial ‘cap’ on the amount parents of preschoolers can earn.

As the government can not afford to pay a reasonable rate for the policy it's currently struggling to fund which areas should be cut to fund additional childcare? Health, education, care of the elderly, policing, defense, etc. Which of these do you feel is ilu necessary or over funded?

🤦🏼‍♀️ read it again

@WithACatLikeTread

You seem to have a bit of a reading comprehension problem.

3.5M UC that do not work at all

1 in 10 = 35M working population

Logically, the total amount of UC not working relative to working is 3.5 / 3.5+x

With x < 3.5

Why are people making assumptions that extending the free 30 hours would be a net cost? You'd need to know not only how much it costs to administer the system but also how much is being lost by people adjusting their income, and what the longer term impacts of that are too. Sounds like a lot of guesswork being done.

I earn more than 100k so obviously I’d rather it was universal but as a general principle I’m not a fan of universal benefits so I don’t get wound up about it. I do think the mechanism to means test it is pretty poor. Both parents can earn 99k each but if one earns more than 100k you lose the entitlement. That’s a bit shit but I understand why it works like that since 100k already exists as a trigger for other stuff.

Yep - childcare / early years education is an investment

I have no issue with there being a cut off, but I do think it (and child benefit) should be based on household rather than individual income. Makes it extremely unfair.
Besides, a quick Google tells me only 4% earn over £100k, and of course only a fraction of those people would have toddlers. It seems staggeringly unlikely that it is worth the admin costs to means test childcare provisions.

I was presuming that at half the remaining number of that 10 would be on UC especially as even nurses or other professionals claim it. Go on though. Carry on with the work shy narrative.

Yes there should be help for multiple births for lower income families...my son has twins they can't afford for mum to work full time as her pay is less he's the main earner on £54k she works evenings and weekends while he does childcare. They have a mortgage nice car and holidays why should people earning more then twice his earnings need help....better house more holidays?

The government do actually publish those statistics - numbers in work, numbers who have to look for work, numbers who have no requirement to look for work. What exactly constitutes work shy is obviously a matter of opinions, but the raw data is publicized.

Rich and high earning are distinct and the disconnect between the two has become very stark.

You only need to earn around £180,000 to be in the top 1% of earners in the UK. But you would need more like £5 million in the bank to be in the top 1% richest. And you couldn't even get close to buying a top 1% by price home in the UK on a top 1% salary.

You can be comfortable on a good earnings but rich people don't get rich on salaries anymore.

People on £100k can afford childcare they choose to have more luxuries that doesn't mean you can't afford childcare just they prioritise differently then moan. There are lots of low income families that can't afford food....nurses for example. That needs addressing

No the threshold needs to be reduced to £100k per household.

But high earners pay less VAT and have more savings and pensions.

How do they pay less VAT?

Look at where you stand if you become ill and can no longer work my friend had a stroke and he couldn't continue work they all came home.

There was a really heartbreaking story on here a while back where someone was a single mum on just under 100k and worried about her and her kids becoming homeless if she tipped over or got the calculation slightly wrong because she'd lose so much she wouldn't be able to pay the mortgage and benefits wouldn't cover it either. This really is hitting vulnerable people.

This.

We are on a different cliff edge (both earned under £50k pre kids, both on over £50k now). Our approach has been to up pension contributions & take parental leave unpaid in school holidays.

By doing that we have kept child benefit. Basically we currently have a household income of just under £80k after tax with child benefit. One of us could put less into pension and have taxable income of £60k. If we did then we’d get around an extra £3.7k/year, half of which would likely be spent on holiday clubs for the kids. We’d lose £5k going into our pension & the time off in the summer. We figure we are better off for a few years at least just shoving money into our pensions. We also have considered that we might eventually have one or both of us drop down to 4 days a week and stop making the extra pension contributions. I’m sure people on all the other thresholds do similar things.

I think when you see you’ll get less than half of a bonus or payrise to take home it does make you think about whether it’s worth it or if it’s better to do something else.

In the case of the 20k bonus mentioned up thread I’d probably be looking at whether I could donate the money and adjust my taxable income on that basis (guessing it wouldn’t work putting it in a pension with the thresholds but maybe it would depending on usual contributions)

If this were true, couples with a single income wouldn't be hammered in the tax system (which they are).

Those people are not net contributors so they are choosing to make others subsidise them if they turn down work.

Higher earners already pay their own way and subsidise others. All they are doing is choosing to reduce the money they give to others.

Do you know how much housing costs in places like London, Bristol, Oxford? And childcare? As in, do you actually?

@110APiccadilly agreed. The 100k threshold is more based on an outdated view that someone earning this amount or over, will almost certainly be man, the wife would normally be a SAHP and therefore does not need as much “free” childcare.

Why is it you making the decision against your salary against you both making the decision against your joint incomes? Are the children not his? Does he not think he should be using his salary because his little woman wants a hobby? As a family you have lots of money make the decision as a family. Most people don't have the luxury of making this decision even with supported childcare they struggle to pay their share and live hanging on with their nails until full time school.

The answers are obvious then. Give up your high earning job and do one that benefits society, claim the benefits lose the holidays, house and luxury and feel better as you're being treated fairly.

We do the same wrt child benefit, albeit it's only one of us earning over 50k. Unpaid parental leave in the holidays, thus resulting in less money going into the Exchequer. The next step will be dropping either a half or full day. It's just not worth the extra effort at this point.