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!

My entire salary is just under £14,000 a year. I’d be happy to swap and cope with your budgeting difficulties if you like. 👍🏻

here is the link to the screen shot showing tax at 39% for all tax on £160,000

where is the 62% or 82% as you claim?

Well couldn’t the same be said for anyone claiming free hours?

But you're not losing the free hours. Almost no one had those pre 3yo before this year. You just carry on as is while people with less income will have access to the new scheme, saving them some.money. Got nothing to do with you.

@MikeRafone i have answered your question here.

This is so patronising. People who earn £160k don't necessarily work harder than people on minimum wage, it's just different. You're ignoring all the societal and economic aspects which enable people to become high earners. I know a lot and, honestly, do I think they work harder than people on their feet all day or ward nurses at busy A&Es? Or many other jobs. No. As for the issue of whether the rich should be taxed more: yes. Because that's the backbone of a welfare state.

I was earning half of your salary and paying 90% of it for 2 x nursery when I had two preschoolers twenty years ago - we didn't get any help with anything other than child benefit, which we also then lost too.

Personally, given the state of the country's finances, people on at least 2x the average household income shouldn't be given subsidies/benefits but I'll probably get vilified for that! (I accept that childcare is expensive - it was when I was trying to stay on the professional ladder too - so when I had my subsequent children, we got a nanny as it was cheaper).

well why don't you include the lose of Universal credit in that calculation - as over £40,000 a year you stop getting UC

its not a tax rate though is it - its a benefit stopping

I am flabbergasted you think you should have any help with childcare at all when you earn such a salary.
No wonder the country is in a mess.

Its not a tax bracket

you are not paying that amount in tax

you are losing benefits as you earn more than is needed for benefits

And to add, the money saved with the new scheme by lower incomes than yours will almost certainly be spent back into the economy, while the 1% of wealthy people just hide their money away, put it in offshores or other schemes that only benefit them and not society. Then whinge again when their high taxes is used by everyone else (as if everyone else wasn't also paying taxes!!!)

It’s an effective tax rate created by tax and loss of benefits.

People will not work to lose 82% of their income, and will look for ways to mitigate that loss.

Exactly. The op is a ‘worker’ she’s PAYE for a start.

Thepeople I know earning around that work in finance and IT, an IT example being an enterprise architect. There are lots of jobs with that sort of salary after years of experience.

I’m really not in ‘hiding money offshore’ territory at this income - more ‘paying a large mortgage on average house in London and hoping to retire before 70’ territory.

The cliff edge is stupid and unfair and makes no sense, agreed. Fiscal drag is pulling a lot of us into it as well.
Keep working hard @ChildcareCost and soon childcare costs will be in your rear view and hopefully you’ll be on a lot more money and this will just be a distant memory and you’ll be able to enjoy your salary and your pension at some point.

how is this patronising? My point is these jobs pay you for your time so they’ll boot you out if you don’t have good childcare. It’s not some value judgment about working harder, it’s simply that they often aren’t compatible with nursery hours or provision and people have to pay even more childcare for the “luxury” of doing those jobs (meaning you don’t actually take home as much as you’d think in the end). Get over yourself honestly.

'160k type salaries is usually because the job is extremely stressful, long hours and low flexibility (and male dominated). '

@summerbaby333 lots of average paid jobs are also highly stressful, long hours and male dominated. I won't give you a list because this argument is so old and rubbish, I'm gonna die of boredom.

This is such an ignorant reply. The country isn’t in such a mess because of people like OP.

Your calculations are wrong in anywise - you don't pay 60% tax earning £160

4% of your earrings is at 20%
21% of your earnings is at 40%
9% is at 45%

national insurance is at 3% you pay less than someone proportionally earning £50k

your total tax is 39%

The amount of posters on this thread that don't seem to grasp quite how capitalism fucks the average worker over is incredible.

How many people are working in a profession where 160k is attainable???????
No matter how hard, how many hours, how many qualifications, the majority of us will never, ever EVER even sniff at that pay day.

If you are privileged enough to earn that money, it doesn't actually make you any more worthy ( oooooh, I pay more taxes) than workers on the breadline.

OP is pissed off at the " cliff edge " cut off, OK, we can see that. We can understand your maths.
But OP thinks they are hard done by because they won't SAVE 37,000 on childcare. And that is completely unrelatable to 99.999% of posters.

Also I’m not against being taxed more?? But does that mean I can’t even get the benefits of what I pay tax on? Should I not be allowed to send my kids to the local primary or use the nhs, all of which are government funded? Come on.

You do realise they are the ones who subsidise lower earners.

Even if they got 100% of childcare paid for they’d still be subsidising you.

What you are arguing for is greater subsidies for you. You want others to do more work for no reward and to pass that money to you.

Those numbers are so inaccurate I’m not sure where to start with the corrections!

cool well maybe I’ll quit and join you, and hope all the men making over 160k continue to fund our childcare.