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!

But with tax thresholds you only pay more tax on the amount over the threshold, this is more equivalent to the higher rate being applied to all your income.

31% of children in the UK live in poverty and the issue you want to be solved is free hours if you earn over £100k? I think it's important to get a sense of perspective and realism.

Best she get on and claim UC, and PIP, and Job Seekers allowance, and free prescriptions and free glasses and free dental care, and Employment and Support Allowance, and Diffuse mesothelioma payments and the Blind Persons Allowance, and all the other benefits that exist - oh wait, she's probably not entitled to claim for those either.... bummer huh?

£160,000 is a vast salary. It puts you in the top 1% of earners and you earn more than the Prime Minister. You don’t need taxpayer funded childcare. This country is on its knees as it is.

For a long time I worked part time, as it wasn’t worth working full time for the reasons you set out. I now put the maximum into my pension to keep just under £100k. Next year I’ll lose out because even with that I’ll be over £100k, but it’s just the tax free amount I’ll lose now and it’s not worth that much because my kids are older.

People get annoyed at the complaints about this, but they’ll soon care when they can’t get a doctor’s appointment at all because all the doctors are part time for this reason.

How have you 'lost' the hours? I can't understand this. Did you qualify for government assistance and then got a £61,000 pay rise?

I completely agree with what you are saying. And it makes it worse that a couple both earning £99k, so a household income of £198k, will be eligible for it. The system makes no sense and the £100k threshold across the board disproportionately affects people down South who have a much bigger cost of living/nursery fees.

It was Conservative not Labour.

You realise that without high earners paying tax, there couldn’t be benefits for lower earners.

It’s not a race to the bottom

Ps. You could move to a tax free country, then you’ll actually feel like you get benefit from the money you earn. Pay privately for school, health care etc. It’s a good idea, several of my friends have done this. At least until Labour leave the building.

That's an argument for making the cut off much, much lower.

Change your job and earn less money then.

I’d argue it should be universal.

Thinking about other European countries where they have universal provision, higher earners do pay a bit more in some places, albeit this is typically by a couple of hundred pounds a month.

I suppose that is fine also.

The figure is also distorted further by the removal of the personal allowance and 60% rate £100-125k - which makes it even more extreme than it could be.

You’re on £160k????

Sorry but you can afford childcare, cut your coat according to your cloth

I’m not a high earner.

Unfortunately you’re on mumsnet which has a crabs in a bucket mentality to those that have done well - even women.

You see as a high tax payer you should do nothing but pay and receive nothing. Probably why so many high earners are leaving the uk or finding loopholes to hide their money.

A lot of other high tax economies allow high earners to have free childcare like Sweden which has a higher productivity rating than the U.K. Almost like if we stopped trying to tear down those paying into the pot, more tax is collected as people want to work harder.

I am prepared for the onslaught of comments I shall get shortly but I really don’t care.

edit: I actually turned down a promotion as it’d put me in the higher band. There was no point. I went part time to look after my kids. I’m sure I’m not alone.

I actually do think it should be a taper not a cliff edge at £100k - but £160k would be past where any reasonable taper ended because, as you note, you're not in the position where you'd be actually better off if you earned under £100k. Someone on £101k would, and that's why I would support a taper.

I think you'll find very, very few people who think that paying all of your own childcare on your salary is too much to ask and that tax payers should pay it instead.

Do you deduct every other benefit you arent entitled to as well, to show how badly off you are?

You will get flamed but yup it’s shit. My husband earns over the threshold. I earn massively under (ICU nurse.) We can’t afford for him to overpay into pension as we need money now (2 kids under 5) and so he haemorrhages money to the taxman. We live in an expensive area and yes we are homeowners, albeit with a mortgage. But we aren’t rich. We would be better off having the same household income split equally between us and then we’d get the free hours. But unless the government decides to double my salary it won’t happen!

But I move to part-time and put £60k in my pension, I can claim it (cost to the gov of £14,600) plus they will lose ~£40k of tax revenue from me.

Who is that helping?

Try earning a 35k nhs salary in London and paying childcare with no free hours.

100k is megabucks to me.

I’ll get scolded but in this country there is very little to motivate one to do well. Working for oneself it makes a lot of sense to remain under the VAT threshold unless you can earn significantly more, if you’re employed and have a young family there’s little to motivate you surpassing the £100k threshold. And really for those saying £100k is loads, if you earn £100k that’s about £5700 take home pay, if you live in London and have have 2 small children that’s £3300 a month in childcare. You can’t live on the balance of that. A friend of mine on just over £100k had twins and given up work simply because it just doesn’t feel like it pays to after childcare costs.

The help is there for those who NEED it, not just want it. Hope that helps x

Those are your options though. Decide which is preferable to you and put it out your head.

If you can you should probably emigrate, lots of the best people are. The responses on this thread tell you the country will only get more hostile towards people like you.

Well don't then.

Earn based on what you want to bring home and stop trying to play the system.