To think this working parents eligibility criteria is unfair?

[takehischipsandputthemonmyplate]

Ready to put my tin hat on but...

I am a low earner (£25k) and partner is high earner but not exceptionally so (£110k in London) so we aren't eligible due to my
partner earning over £100k. However we have friends who combined bring in far more (almost at £200k together) but are individually just under the £100k threshold and so will be eligible for the free hours from 9 months in September 2025, thus savings thousands on childcare.

I appreciate it's a case of my diamond shoes are too tight but this does feel like a flaw in the system.

Last year £30k was the FTE of M1, I got pregnant just before I started my first teaching job (career changer) during Covid and took an extra year off. This year I earn £13k something. I would only be able to work 1 extra day to have the 30 hours covered (7:30am to 6pm per day). The one saving grace is at the moment I do keep every penny or my salary as I’m under the tax threshold and so incentivises me to stay at home, not pay to be apart from my little one, pay tax, student loan contributions and have the extra stress and hassle of another day at work when I could keep myself under the limit for those and my high earning DH makes up the difference!

In my opinion neither a household earning 2 x 95k nor a household earning 1x 105k deserves free childcare. Just because one gets it doesn’t make the others claim to it more reasonable. And taxing per household has its own implications and complexities.

and I say this as my partner earnt a tad over 100k for the whole time my kids were in nursery. Ironically once my son started reception he took a massive pay cut because he was finding it too stressful juggling home work balance (probably because I made him commit to doing 50% of the pick ups / drop offs!)

I think you have to look at it over the course of your whole career not just the 5 years or whatever you pay childcare and realise for 100k +earners it’s small change. Plus with the pension break it’s probably more like 120k earners that are affected.

So you’re not actually paying any tax but think it’s unfair you don’t qualify for the free hours? You also said you currently pay £60 for the half day of childcare you need so I don’t understand where the other 1.5 days is coming from which you don’t need working 2 days but do need working 3?

Even if you did only 3 days you’d be 2k gross better off (that’s ignoring the fact you’re moving up the pay scale) as a family PLUS the benefit you’d get from the funded childcare. It’s obviously fine if you don’t want to do that but there’s absolutely nothing unfair about it in your situation! You’ve chosen to take quite a bit of time off work and not progress your career before working very part time.

My DH is also a high earner and I’m glad I have my own tax bucket that allows me to pursue my own career without being penalised for being married to a man that earns well.

I agree I think it’s really unfair. After 100k you go into the 60% tax bracket and essentially your taxes are paying for others peoples free childcare. It’s a necessity, could you imagine if all other public services were also means tested, nhs and school, where is the line? All it means people will play the system anyway (eg put money into pension or reduce hours). For me I will be financially better off to go part time so the result is the opposite of what the scheme intended. This will likely set me back in my career. I appreciate im still fortunate and people have it a lot worse. I live in London so everything is insanely expensive. I work my arse off and do 60 hour weeks in a stressful job and must pay for everyone else’s childcare plus my own!?

Agree it'd not fair. Particularly in London where childcare costs seem to be more than double the rest of the country, it is effectively driving you out of work

I was working full time before I got pregnant (not planned) with my second. I worked full time after my first maternity leave was over. I’ve chosen to stay very part time due to not being eligible for the 30 hours and have to therefore see the “perks” of remaining on a low salary such as staying under the tax threshold as the fact I’m not taking an extra 15 hours of funded nursery hours. Again, not saying that’s not my choice, but seems wrong that families with a higher income are entitled to it and we can’t. I’d happily work more if it wasn’t going to cost basically my entire extra earnings to do so just because my contraception failed!
DH pays more in tax every month than my full time pre-tax salary would be and we can’t even get a doctor’s appointment half the time. All 3 years olds get 15 hours of funding, but I can see the difference in how ready DD2 will be for school in September compared to DD1 who was doing 4 days a week in nursery at the same age.

The scrapping of benefit restrictions such as this is deemed by tax policy wonks as a quick way to boost growth. Thinking of cutting your hours to stay under £100k? Not taking promotion to stay under £100k? Government is incentivising these crazy steps. Madness. But they’d rather raise employers NICs and sent unemployment soaring.

Yes, single parents/single earner households are the ones worst hit; they only get one set of tax allowances for the whole household.

Apologies I forgot about the universal 15 hours and I do understand having twins makes it financially more difficult. I still believe you’d be financially better off doing 3 days especially as you move the pay scales and your DH putting his extra into pension. Obviously fair enough if you don’t think the benefit is enough to give up that time with your kids, but I can’t agree it’s unfair from a tax perspective!

I don’t think the doctor comment is relevant, DH and I are both intentionally just under the 100k mark and therefore also pay a lot of tax, but I don’t think that entitles us to a faster appointment over anyone else. I agree it’s sad the NHS is stuffed though. Jobs in this salary range often come with free or cheap private medical cover for the whole family so maybe that’s worth your DH looking into?

It’s ridiculous - and getting worse as more ‘free hours’ are brought in that higher earners aren’t eligible for.

It should be universal - penalising high earners in this way and encouraging them to work less is absolute madness.

My nursery is over £2,000 a month. I know people paying up to £2,400. I get £0 towards this.

As of September, I will be missing out on 30 hours plus tax free childcare. Now while the 30 free hours is nowhere near 60% off my bill, it should be around £600pcm reduction.

Plus the £2k tax-free childcare, that is £9,200 of childcare benefit I’m missing out on.

To earn that £9,200 over £100k, I will need to earn £124,000.

So that £24,000 of earnings… what do I gain? Nothing - a few hundred quid in my pension.

@Turbottimes I would love to see the data on people earning £100-140k ish

If you have children under 5, there is now no point at all earning in this bracket.

There must be very little tax take from this group at this point - they’ll either be putting it into pensions, or working part-time.

I agree as well, it seems odd that 2 different child related benefits that are both means tested have different thresholds, there should be consistency.

We also lost out because my dh got a bonus for recruiting staff to the company it took him over the threshold for our sons last year in nursery.

Yes but it's a choice to live in London isn't it. If you don't want those high costs then you move somewhere cheaper

'But women fought for years for separate taxation'

But they didn't ask for their entitlement to benefits and support to be dependent on their husband's level of income.

I don't think they should be eligible, but I don't really think you should be either..

The real reason is the cost of calculating joint income is higher.

This system seems to encourage two partners working at similar level, on similar salaries

IMHO that's a good thing and way better for gender equality than the "man with a big job / woman's job is less important" model

This is amazingly short sighted.

Where do you think the tax revenue is coming from to fund all these generous benefits?

Oh I understand that but I just meant that if you feel that the costs are too high then an obvious choice is to move. Keep your high paying job so tax is no different but live in a cheaper area🤷

I don’t understand how it is perfectly possible to calculate things like entitlement to UC on household income, but suddenly when it comes to things like this it’s considered “too difficult”.

I agree that entitlement to this (and child benefit) ought to be based on household income, not the income of the highest earner.

OP, sit down and do your calculations on how much more you pay nursery without the funding. Also factor in that you do not get to access tax free childcare which is approx 20% off the first 2500 nursery fees each term (if I remember correctly). Then calculate how much more you get in your pocket if your partner does not divert into his pension and decide from there.

If his bonus is in the 20-30k mark, you are probably better off still diverting to pension whereas if he earns huge bonuses, maybe better to give up any childcare contributions and pay upfront.

I don’t want faster treatment, I’d just like DH to actually be able to get an appointment to see a GP on the odd occasion he needs it. He shouldn’t have to pay extra for private GP appointments when he’s most definitely contributed enough towards it over the years! Apart from the years 2022-now I’ve paid tax on every paycheck since I was 16.

You can’t see how it’s unfair for families who have a higher earner not being entitled to extra funded hours than those who pocket more and still are entitled though? You shouldn’t have to fudge your pension contributions (that you might not actually get to see if you die before you reach retirement age!) in order to access funded nursery hours which would in turn encourage (mainly) women into increasing their working hours.

Anyway…considering returning to full-time work from September and take the financial hit of double breakfast and after school club for a year (which will be half my take home pay every month!) until DD1 starts high school the year after, but becoming expats is also looking more and more appealing by the day!

What am I reading? High earners are putting their bonuses in their pensions so that they can get free childcare? Surely it can’t be causing that much of a dent in a combined income of £130k?

@Curtainqueen you lose 100% of your childcare support if you earn a penny over £100k.

You are also taxed at 62% between £100-125k because you lose your personal allowance.

Together, this means you might earn £0 between £-00-125 OR actually bet worse off.

So eg earn £110k. Of that £10k over the £100k threshold you take home £3800.

But - you lose £9,000 in childcare benefits. So you’re worse off unless you put money in your pension to take yourself back under the £100k cliff edge.

What about NHS consultant married to a nurse? rebalance? so consultant works less hours? because that's exactly what's happening in many cases

Thing with household income is student loans are considered on this and this is unfair foe second marriages