I’m not being flippant- I genuinely don’t get it- childcare costs

[Strictlymad]

Please could you knowledgeable lot help me?

I promise it’s a genuine request I’m not being flippant!

theres been a lot of posts recently about childcare costs, being better off earning less due to benefits, UC top ups etc and I don’t disbelieve this but don’t understand what I’m missing. We are struggling and not getting any help at all. There was a long thread yesterday but I’ve lost tract now and didn’t want to hijack.

situation is - dh earns 41k, I earn approx 6k self employed from home whilst also being full time carer to toddler ds who has complex medical needs, we also have 6 year old dd.

ds can’t attend childcare due to his needs so work for me is limited. Mortgage on 3 bed house is 900 in south east, dh commutes to London so running two cars. Applied for uc but not eligible, get standard child benefit. Ongoing application for dla for ds but takes months.

i do appreciate we have more than many and am grateful for that, there is more to life than money- every day I’m grateful ds is alive. I’m just curious at these posts of others saying if dh earned under 100k we would be better of cuz of the ‘help’ - is there something I’m missing!!

thanks all

Bump

I am not in the UK , so hope someone else can help you...

Free childcare hours stop if you earn over £100k (after pension contributions). And that can be worth thousands a year.
Plus you lose the £2k a year in tax free childcare. So your childcare bill can go up dramatically if your salary after pension goes from £99k to £101k.

I personally don't think it's a huge issue. For the few years of nursery you can put a bit more into your pension and still get the help. Then when nursery is over you benefit from the higher wage.

(There are other things, not childcare related, to do with the loss of personal allowance gradually over £100k which increases the marginal tax rate)

Can you claim Carers Allowance. I agree with you I don’t think many of us really understand how it all works, sometimes I think the government make it difficult so people don’t claim.

I think you've answered your question yourself. They're talking about the help with childcare costs, which can be significant for people with two pre-schoolers.

If it wasn't for your DS's disability then you'd be able to claim for childcare help which would cover up to £2,000 tax free childcare and 15 "free" hours a week. That's a significant benefit.

@Strictlymad that specific thread was in relation to a lone working parent who rented. It was due to high rent and childcare costs. In that situation universal credit would be payable to a higher income level due to the allowances. It was also taking into account free childcare hours and tax free childcare which anyone earning a taxable income over £100k can not get. It was a slightly misleading thread as it was talking about "benefits" but those benefits included tax free childcare and free hours rather than financial support.

It's the free hours of childcare that they are referring to, your little one is also eligible but sounds like they will need specialist provision that your local team can advise on from about 3/4. I know it grates when people on a household salary of over £100k moan about lack of help forgetting that people on far lower incomes are funding that help! (Eg me)

I don’t know but it annoys me too.

The people getting thousands a month are those who are renting and paying a lot for childcare. That doesn't apply to you.

Do you really need 2 cars if your DH works in London? Can he cycle to the station for example?

Second the recommendation to claim carer's allowance but you need to be careful about this as you're only eligible if you earn under about £150 pw, which you're quite close to, but it might be checking the actual rules and even deliberately keeping your earnings a few pounds below the limit because you'll then be entitled to about £70? pw.

The help is for childcare isn't it, and you don't use childcare? That's what people are referring to (you lose the entitlement once someone earns 100k).

I can put in a claim for carers if/when he gets awarded the dla but it all takes months and months

Ah thanks, maybe the wording was what threw me! Benefits and top ups I’m thinking why am I missing! I do vaguely remember being told if we sold and rented we would get uc but because we have a mortgage we aren’t which I don’t quite get but hey ho!

Yeah we pay all the tax NI etc but don’t even get a free prescription or dental check up! That all adds up!

Could you get rid of one of the cars? I am assuming DH doesn’t actually drive into London?

You might be eligible for more help if/when dla is awarded. But most people aren’t being given wads of cash, despite what some people seem to believe.

Thanks, we did cost it out to get rid of the car but the rail fare was more than running his little polo!

im pretty consistently under 150 per week net after costa for business materials so hoping the carers will be eligible.

Don't children get free prescriptions and dental care?

There was talk on the thread of UC top ups? But I got confused!

UC helps hugely if you rent and are working with a child under school age in need of childcare.

He does, we costed it as cheaper to run a tiny polo than a daily rail fare

That thread was pretty disingenuous - it took a very narrow circumstance to show how ‘hard’ it was for people earning £100K compared to a similar income to yours, OP. Lots of cherry picking to circumstances to make their point.

if we sold and rented we would get uc but because we have a mortgage we aren’t which I don’t quite get but hey ho!

The difference is that with each mortgage payment you are buying more of the house outright. At the end, you will own a sizeable asset. If you got UC for your mortgage, @Strictlymad , the state would be buying your house for you.

Rent gets you nothing. It allows you to live in that place for that month, but you have nothing to show for it.

UC is to make sure you can afford to be housed, but it can’t contribute to buying you somewhere to live.

I think what the thread was getting at is that there’s a massive cliff edge once you earn over £100k as you lose the free nursery hours.

It is unfair because a couple could earn £90k each and get 30 hours of childcare. But a couple on £25k and £100k would not get the free hours.

Yes you’re right I hadn’t twigged that part, just thinking plainly monthly expenses are monthly expenses!

So if I’m correct, the threads this week are showing that it’s not a linear system? That’s there’s so many ifs buts and maybes that it can never be truly ‘fair’ and a slight tweak in circumstances can make a huge financial difference

And it creates a 100% tax rate potentially between £100-140k if you have two children.

This means you are better off earning £99k vs £130k if you have two children, for example. Which makes no sense.