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!

They end up with the same as a couple earning 45k each of both households have nursery age children.

Do you want those families excluded from funded childcare assistance as well? If not why not?

If she does, the system will have to pay for her childcare hours and won't get her taxes.

Isn't it the best illustration that the system is wrong?

Noone on over 100k needs help with childcare costs.

that's bullshit

I'm all for the Scandinavian model with universal statefunded childcare. But as this isn't likely to happen soon (even if it would be better for the economy) then OP can either moan about her "losses" or work less.
It is quite tonedeaf though to moan at 160k. It really shows how far away you are from "normal" people's reality.

£13k a month gross pay and needs the government helping….what the hell.

Other benefits aren't means tested. The OP pays a lot of tax why shouldn't she get funded hours?

You’re forgetting that in those countries, people are proud/hpybto pay taxes because they recognise that’s what they get in exchange.

Nit a system where people always grumble about taxes, feel it’s acceptable to grumble because disabled people get ‘free money’ (never mind they wouldn’t be able to eat otherwise) and generally have a huge go at increased benefits ‘because people shouldn’t rely on the state’.

so yes I agree that fully state funded universal childcare is great.
But only if people ALSO ascent it’s a benefit. That by receiving that money, they are receiving a benefit like many other people in the country who receive UC.
So yep. If @ChildcareCost agrees she is receiving benefits too (and might therefore fall into the benefit scroungers category), then yes it’s a great idea.

Why should anyone receive a benefit when they dint need it?

Akso what are those benefits that are not means tested?
Apart from PIP that is based on need/disability, I dint know of any other…..

Yes.

Wipe away your tears with £10 notes, OP.

I was under the impression that the 30 hours were to help those out of work due to childcare costs, or those losing a majority of their take home pay to nurseries. I don’t think your salary falls into these categories so it probably wasn’t intended to help you.

Which is why it is available for a family where each parent earns 99k a year?

We weren’t eligible and it didn’t even occur to me to be catbum faced about it.

Annoying but there has to be a cut off point somewhere and how many parents, realistically , where both are earning £99k or even £95k each. Statistically a lot less than the families where both are on £30-£50k each and still struggling with the cost of living.

I think the funded hours should be for everyone, for a couple of reasons:

1. It’s unfair that a single parent with 101k income doesn’t qualify, but a two parent household where both parents earn 99k each do.
2. High earners like OP pay a lot of tax. The system shouldn’t encourage people to fiddle their income so it’s below 100k, by paying into their pensions etc.
3. Most importantly, the criteria mean that some people may end up “trapped” in abusive relationships. If a partner is such a high earner that the family doesn’t qualify for funded hours, then the other partner may be “forced” to be a stay at home parent and lose their financial independence.
4. The country needs more babies (future tax payers).

No economic naivety here but a healthy dose of reality. I earn monies to fund my lifestyle, if I do not have the monies I do not do it.
I do not expect the general taxpayer to make it easier for me to live a lifestyle that I want.
Hence why I stopped at 2DCs, knowing that I could afford them on my salary, go on holiday and pay for private school if I wanted. For that I live in a small terraced house and sacrifice the big house people on an equivalent salary have. Paid a child minder as needed. MY choice my lifestyle - it is why one climbs the greasy corporate pole and gets paid more to have more and take yourself away from the safety net.
Personally think £100000 cut off is too high and should be around 60-65K and household income over £100000 means you lose.

I say that as a single parent who got eff all from the EX and still has a very comfortable lifestyle on circa what OP earns

While I understand the threshold and also do think £160k is a huge salary i think people are maybe not fully understanding the the tax knife edge £100k is especially if you have children under school age. You lose the childcare hours, the tax free childcare, your personal tax free allowance and maybe others I'm not aware off.

Yes some won't have had help years ago, I didn't for my first but I am still glad the government is now improving the support for working families.

I think it would be far fairer if it was more staggered for example lose half the hours at £100k, then say half the 'tax free' at £110k, etc. Make £100k less of a knife edge and help prevent the brain drain by making earning that level in the UK attractive.

The nastiness and tearing down on this thread is depressing.

Well, my cousin is a nanny and I can assure you that she's not mega wealthy!

I didn't say nannies are "mega wealthy." I said they are expensive.

But the OP childcare costs aren't going to change. Other people on lower incomes will have 30h funded. She was already paying the full fees, that isn't going to change for her. She isn't losing anything.

More and more people are going to fall into this “trap” as the threshold hasn’t changed since it was introduced. Eventually there will be enough of them in the senior levels of the public sector that it will be changed - just as the pensions cap was lifted because it negatively impacted hospital consultants.

There are clear ways to avoid it as many people have said. OP I don’t know why you don’t do this for the few years your child needs child care - it’s perfectly legal.

What a stupid system that is deliberately set up so people can get around paying tax! There was a chart published quite recently that showed how the number of taxpayers dramatically falls around the £100k threshold and then starts rising again at about £130k.

There should be a clear, progressive benefits and tax system that doesn’t have these cliff edges. It should be very easy to design it - probably AI could do it for you. But around the edges there will be some winners and losers and govts hate having losers.

Endless means testing of every benefit is pernicious, as is a system where lots of people pay no tax. We all need to be invested in the system, which means we all need to pay in a bit and we all need to get out a bit - with those at the lower incomes paying in less and getting more out and vice versa for those at the top. A system where people are either payers OR receivers is not stable in the long run.

I've asked this question and what their joint income is. I haven't had a response.

I have a feeling you won't get the answer as I suspect it wouldn't strengthen the OP's case.

Why is that relevant? Op would have been able to access 30 hours free childcare in the roll out of she earned 99,999. Now she can’t.
As such she is considering how best to proceed. As every £100k earner coming after her will. It just results in people like Op reducing net pay.

@Sceptic1234 because she pays 60k in tax and NI.

What is the point of working and putting yourself forward for high level roles, when someone not interested in doing anything to further their career happy to sit with a no stress job gets all the support of the day for childcare. Why do you think that someone who contributes little tax has more of a right to childcare support? Like OP has said her childcare bill is enormous. As is her contribution in tax.

It’s actually people like you have the absolute gall to give out that others do not deserve it. It’s no wonder so many women give up work regardless of income.

With that attitude people shouldn’t deserve UC or any supports because they are spongers?