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!

Benefits that are not means tested include:

• free school meals for all primary school children in London
• free breakfast clubs (currently being piloted but a Labour manifesto pledge)
• attendance allowance
• free public transport in London for over 60s
• free prescriptions for over 60s
• free eye test for over 60s
• state pension
• student disability allowance
• etc etc

Plus there are all the govt services that are provided “free” regardless of wealth:
NHS
Education
etc etc

and why post in AIBU if you don't want to hear the answer, but spend 3 pages of replies justifying your position?
Unreal!!

Are you fucking joking?!

Whatever you tax you get less of. This is effectively a tax on high earning single working parents. So we’ll get less high earning single working parents. Whether you think that’s positive or negative depends on your societal views.

The OP doesn't have to tell us if she doesn't want to but it would provide clarity. I do suspect there is a equally high earning partner. If I am wrong and the OP is a single parent I apologise and in fact commend them hugely for bringing up a child alone and maintaining a very succesful career alongside this.

I think it weakens your argument to be so insulting.
Whilst you may not agree with the Op, they haven’t been insulting or patronising. But have been on the receiving end of both. With an added dose of vitriol.

This is a strawman argument. There doesn’t “have to be a cut off”, it is a political choice. We don’t charge for the education of children whose parents earn £100k nor do we charge for the healthcare of people who earn over £100k. In your world, why aren’t they paying fees once their child goes to school? Do they suddenly become poor and unable to pay?

People earning £100k are already paying more than people who earn less - they pay more tax. So you want them to pay more tax into the general pot and pay for themselves.

We either want to encourage people to have children and contribute in the workplace or we don’t.

Exactly this. But it seems impossible to rationalise with some posters.

This is a very weird argument OP. You haven’t ‘lost’ anything, you are not entitled to it. This is like me saying that I’ve ‘lost’ my universal credit because I earn too much to claim it

You won’t. If you’re a single parent you do everything possible to advance your career because you’re acutely conscious that everything depends on you. I remember (many years ago) being delighted when I became a higher rate taxpayer because it was a milestone of achievement. To be honest I didn’t pay much attention to the amount of tax I paid, my focus was always the bottom line on my payslip.

Exactly this. But it seems impossible to rationalise with some posters.

yep

Whilst you're earning 160k and wanting to use funding and tax free, your childcare provider will be making minimum wage and paying tax on your payments and funding.

You haven't lost anything. You simply aren't eligible for tax payer assistance for your childcare costs as you are in the top 1% of earners.
What does your DH earn? I expect there is an even higher household income in your family @ChildcareCost. If, on the other hand, you are a single parent, I agree that these schemes and the child benefit limits tend to penalise single parents.

@Noonehastheanswer thank you for answering. @MoveOverToTheSea any response? I doubt it!

The same can be said about other benefits. Some people reduce their hours so that they can claim universal credit. Is the solution that we should pay universal credit to everyone regardless of income?

I agree that it's a political choice. I don't agree that someone earning in the top 1% of salaries in the UK needs to be persuaded to continue to be part of the work force. It is very much to their benefit to work and earn well so they will do so, unless they have an even higher earning partner. They are also unlikely to need financial incentives to have a child compared to so many parents on average salaries.

When I was on that salary level, with two DC and a single parent, I got a Nanny. So much more flexible on hours, and also did housework. You should perhaps consider this, instead of railing about the injustice of others getting same service cheaper than you (they earn much less than you do).

Rather than looking at what you feel you’ve lost, consider the very fortunate position you are in. Yes you’ve worked hard, as does everyone else, you just happen to be in an industry where it’s highly rewarded.

Also the effective rate of tax between £100-125k doesn’t affect you, because you earn over £125k, so it’s not something you should be factoring into your argument. Your actual tax rates (20, 40 and 45%) and your NI rates are what you should be calculating tax on.

You could always give up work and look after tlhe children you chose to have. Why should someone, grafting on minimum wage in a care home pay tax to support someone on such a high salary as you. Entitled.

Absolutely disageee, she’ll get £5700 after tax a month, if she has twins or two nursery aged kids the bill will be 4800, so she is meant to house, feed and clothe her children on £900 a month?! people on benefits have more than that to live off. And she hasn’t mentioned a partner - maybe she’s a single mum or maybe parter is a low earner and she needs to provide for partner too. This is really ignorant.

She could, of course, and some women do, but that means less tax money to fund childcare for everyone else.

This incessant penny pinching attitude is really tone deaf when benefits are being slashed and people are actually struggling to live. I find it quite upsetting. Sick pay and UC are awful. Be grateful you've got a good job with prospects and a child. We all pay tax for things we don't use. It's how an equitable society operates.

Why should someone, grafting on minimum wage in a care home pay tax to support someone on such a high salary as you. Entitled.

This doesn't make any sense! The care worker could be caring for a millionaire...

Why do you see it as a loss? You’re just not eligible.

So what you're saying is that if you're on 137k a year you can drop to 73%FTE (less than 30 hours a week) at no cost to yourself and the difference will come from tax, and that's a problem.
If it were me I'd say roll on part time hours!

If you’re that bothered, go part time. Then you won’t even need so much childcare. Are you a single parent or is there another earner in the household?