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.

It does, and it also needs to encourage it lower down the income spectrum too. The number of people faced with a decision about whether it's worth their while earning more, in some cases even whether they can afford to earn more, is really unacceptable. This thread has been about higher earners, but low income families working out whether more hours will put them over the FSM threshold are making decisions in the same way.

Really you believe your wonderful 78000 tax-payers pay ALL the taxes funding the rest of us. How unworthy are we.

You do realise that taxes are not just used for 'benefits (including the funded hours, the child benefit. the UC, the tax credits etc ) - but for the NHS, Education, Defence and the rest.

Slightly bizarre to believe that 78,000 of you are selflessly supporting the rest of us.

Wonder where my (and everyone else who is poorer) taxes go then.

The top 1% of earners pay 33% of all income tax.

The top 10% of earners pay over 60% of all income tax.

In addition to these payments they also receive back far less than the average person. No child benefit, no 30 hours funded childcare, excluded from tax government free childcare savings scheme etc.

Nobody earning under 45k is even a net contributor.

The system is massively reliant on a relatively small number of people funding everyone else.

I have absolutely no idea. What I do know is that people earning less than £100,000, often with degrees and 'decent' jobs are struggling to feed their families/afford to have DC at all. So I don't suppose they can afford the extra to fund the childcare places for people earning over £100,000. Surely the money would have to come from somewhere?

Perhaps childcare should not be free because usually, children are a choice; why should other people fund your lifestyle choice?
On the back of that point, MNs will usually scream, 'our children will be caring for you in your old age so that's why childcare should be free - we are bringing up the next cadre of carers'
(if that's your ambition for your child, then ok - is it theirs?)
100k pa and you think it should be free?
No, means test

Oh God man. Please don't do this. Don't try and make out you're not rich. You're very very rich! The reason people with less money than you get tax breaks/free hours is BECAUSE THEY EARN LESS MONEY THAN YOU and can't afford to pay the nursery costs if they work. You can afford to, so you have to. Why is this so hard to understand? How is it unfair?

...and I stated that of course we can question people's life 'choices', as long as we bear in mind that some folk have more choice to start with, and that is often due to having some sort of privilege (though clearly not always).

Sometimes I wonder if people actually realise benefits are funded by the taxpayer if everyone is on benefits, who is actually paying??

Because it's not fair the high earners are paying the most tax, paying out but don't see any benefits for themselves.

Now THAT'S where the problem lies for sure.

We currently pay around £3.2k a month for two kids at nursery in London. It is painful watching all that money go just so we can both work.

That said, we can afford it and the country doesn’t have the money to be providing things that individuals can and will pay for themselves when those that can’t pay are going without so no, I don’t think free childcare should be universal.

However, I think the £100k cut off is too blunt, it should be tapered so you’re not suddenly losing a huge amount the moment you go a penny over £100k.

I've said this before unthread but I'll say it again, it is not as simple as that.
There are studies showing that government funded childcare is not an expense it's an investment.
People are reducing their taxable income to £100k by making additional pension contributions etc which is less tax take.
Women with higher earning partners (more often than not this way round) are giving up work to be a SAHP, again reducing tax take and taking women out of the workforce.
The government are trying to get recently retired people off golf courses and back into the workforce whilst there is an untapped workforce who can't afford childcare as they would be paying to work.
Some parents want to SAH but I genuinely know of others who have reduced hours and given up work entirely as the sums don't add up.
Economically this is madness. It's also terrible for women who are putting their careers on hold, not building up a pension etc due to the lack of affordable childcare and the cliff edge of £100k.

Everyone isn't on benefits.
Almost everyone benefits from things which taxation funds.
Some folk who receive certain benefits also pay tax on their income.

Are you familiar with the concept of a society where those with the most help those most in need?

"The system is massively reliant on a relatively small number of people funding everyone else."

Good. As it should be. There has to be a downside of aiming high🤷🏻 if you're smart enough and have the resources to succeed in life, it has to be balanced out somehow for the rest in society.

You need to incentivise those who can help to continue doing so.

As I explained in a previous post I once received a £20k bonus and kept not a single penny of it due to the tax and childcare rules. Are people faced with that situation just supposed to suck it up and say nothing for the greater good?

How many people whether they be higher or lower earners would be happy to have an effective marginal tax rate of 100% or more?

And due to this policy the government will have LESS money to spend on those who need it! If you have t understood this yet look at scrunchmum’s excellent explanation above.

No let's bring back the workhouses and make sure people who are poor suffer for being absolutely inadequate.

Yep.

People respond to financial incentives rather than other peoples moral takes. This is as true for someone on six figures as it is for someone reliant on top up benefits. Disincentives to work when a person otherwise would are bad for all of us, whether the person concerned happens to he somebody one sympathises with or not.

I am not sure the point of your reply, tbh.

What 'policy' - what I describe is a caring society, not a policy.
Wouldn't anyone who was comfortable want some of their comfort to also be passed on to someone in need?

We actually need to incentivise people to care about those in society who are less fortunate than them?

It wasn't a dig at you @Perhapsanorhertimewouldbebetter it was the poster you responded to. I just wonder if people realise how good they have it on these salaries like the OP's. Many can only dream of having that kind of annual salary.

Only if the person was deserving and genuinely trying to help themselves. I will now run for cover!

Yep, and it would seem they need incentives to actually care about those less fortunate. Sigh.