Loss of 30 free hours will cost me £37,000 of pre-tax income

[ChildcareCost]

9 month olds are eligible for 30 free hours from September. If you earn over the threshold, you do not get this 30 free hours plus the £2,000 of tax-free childcare.

My nursery typically charges £2,150 a month for an under-3. This works out at c. £10 an hour assuming a 50 hour week (open 8-6).

They have circulated the free hours schedule this week, and the monthly cost with 30 free hours is £1,100 hours for an under-3 (noting funded hours only cover 38 weeks).

This means the loss of the 30 free hours will cost me £12,600 a year. Plus of course the loss of tax-free childcare at £2,000.

So, I need to earn an extra £14,600 net just to cover the cost of not being eligible for this scheme.

To earn that £14,600 over £100,000 – I need to earn a gross figure of £137,000.

Surely this is not fair on the parents excluded from the scheme? It doesn't seem proportional that I need to earn an extra £37,000 just to recoup the loss as a result of not being eligible!

I’m not even clear what you think my point is.

But my point is as I describe. I don’t resent other people having childcare support, I think it’s incredibly important.

I resent not being eligible for it!

I agree with you OP. I think help with the cost of childcare should be universal. Some people on here are very bitter about their own life and earnings and can’t see past that to see that the 100k cliff edge is a harsh way of doing things. They witter on about ‘the taxpayer’ forgetting that you are the taxpayer.

Well if a household can earn £199,999 then maybe this should be the threshold?

I think it should be universal.

Given the lengths people are going to (and will be making even more effort to go to in future with the new offer) to claim, I suspect the government won’t find it very expensive vs trying to exclude people.

Having an income like that puts you in an unfair advantage in so many respects, OP. Take some time to think about it. Do you give a shiny shit about poor people being stuck renting at twice the cost of a mortgage for example? And I hope to God you are not going to tell me that you are in the position you are in purely because of merit, there will be good fortune stamped all over your journey to get where you are.

I completely agree OP. Any cliff edge like this does not make sense - it’s crazy that you can get a pay rise to take you over £100k then end up with less each month. Where we live, full time childcare is over £2000k per month, so with two children and no childcare support, this eats up a significant amount of the take home pay of £100k salary. It also can lead to (mainly) women leaving the workforce - I know of more than one couple where the woman is a teacher / nurse and when they’ve lost the 30 hours due to their husband going over the threshold, they would be losing money by working when paying for two children in nursery so therefore have stopped.

So you want a socialised system and more tax would be taken - you can't have benefits and live on benefits unless everyone pay in more, in the way of tax

@Absentmindedsmile

Wow. That is so very discriminatory to suggest people who disagree are unintelligent therefore low earners!

I'm all for support for the difficulties of cost of living, but if you're on over £160k you should be independent . When the financial shit hits the fan in next 1-5 years,your attitude will be even more painful

Exactly. Most people on here saying 'childcare should be universal' would provably not be in favour of being taxed more to pay for it. So how do they expect the government to fund it?

Your response is incredibly naive.

If the tax system encourages higher earners to work less then the subsidies they pay towards funding lower earners also reduce.

You may not like it but the higher earners are the ones that bankroll the vast majority. Most people don’t even come close to paying their own way let alone subsidising others.

The government isnt a massive pot of money, there has to be limits. In an ideal world it would universal however that’s not the state of the country. I would love limited money for schools, healthcare and communities.

If we want universal free childcare the tax rate might have increase again to provide that. It’s not free after all.

There’s a separate conversation on government wasting money or under funding in all areas. But that’s a bigger conversation than this thread.

I am probably controversial and think the limit should be lowered and similar to child benefit while a sliding scale for free childcare.

The OP's level of entitlement is staggering

Can you show these % of tax at 82% and 47%

as I can see them on this, the highest I can see is 39% and that includes NI contributions

But why would you be? You earn 4 times the national average! And even with the 30h free, spread over 52 weeks that equals around 2 full days of "free" childcare, for which you need to pay food and such. The other 3 days a week are full price. As an example, at our nursery it goes:

• 3 days full price at £70
• 2 days funded hours with £15 for food etc a day

= £240 per week = £12,480 per year

If you're on £40k, that's 31.2% of 1 salary.

In your case, 5 days at £70 = £350 a week = £18200 a year. So 11.3% of your salary.

Yes you also have different tax rates and other things you're not eligible to, but saying childcare costs aren't fair for you, while dismissing theyre still way more unfair for the rest of us is a bit rich.

Higher earners wouldn’t need to look for workarounds if childcare was universal hence taxes would increase.

I hear you. It sounds like you've got it really tough. Sorry people aren't being more understanding. Maybe a Change petition? Or GoFundMe?

I don’t understand this. You haven’t LOST anything. You’ve not lost £37k. You earn the same as before. Your childcare costs the same as before. Unless I have misunderstood the title of your post.

Also at £160k do you really need this benefit? When I had two children in nursery and my salary was £37k I managed with 15 free hours. For one child only. I can’t understand how you can possibly feel hard done by!

No doubt does a better job and doesn’t scam expenses , anyone who thinks the politicians are poor needs to open their eyes.

OP I do understand your frustration and also congratulations on your earnings in a no doubt skilled role, we need higher tax payers and yet everyone seems to hate on you for been successful, the joys of being British and learning to stay in your lane.

As a director of a business I suffer the same hate, I didn’t get any free childcare as my DS are now 18 & 21 but I do think the way it’s capped is unfair.

it’s not a race to the bottom! I understand what you are saying about the additional tax but I’m not sure you’ll get a decent debate on here.

You earn a lot stop moaning. The childcare is for lower/middle earners you are neither

Between £100-125k you lose your personal allowance, creating a 60% tax rate. Plus 2% NI.

Over £125k you pay 45% tax plus 2% NI.

The 82% is the tax + NI + loss of childcare hours and tax free childcare = ~£11k benefit to earning £60k over £100k with one child in nursery.

Well it isn’t, given anyone earning under £100k can claim.

Hi,

I'm not in the over £100k category but I agree with you. This country should not expect the wealthy to subsidise everything and not benefit themselves. I've heard about means testing pensions and honestly I think it's just ridiculous.

It might only help for one of the nursery years but if you haven't maxed out your pension contributions, you can use the previous 3 years pension allowance to reduce your income to try and come under the limit.

Your income is £96,586 per year net which equates to £8,0448 per month

and you want social benefits to include you, the same as someone on NMW

taking home net wages £1793 per month

can you explain why you feel you need that money?

has it every occurred to you that without the workers the wealthy wouldn't be rich