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!

A person on minimum wage isn’t a net contributor so will not be supporting anyone. And what do you think will happen if there are less high earners, who are actually the ones supporting everyone else, to pay tax?

OP will be paying a lot of tax and probably will be until she retires. It’s really not much to ask to get a very small proportion of that back in childcare costs. We all need the next generation and we all need high earners paying tax.

OP I advise you to move countries. This the way ways it’s going/ high earners are leaving.

Many of the negative comments will be from “net recipients” because there are more of them than net contributors!

it’s so bad for the economy that working hard doesn’t pay. The government need to get on top of this.

A person on minimum wage isn’t a net contributor so will not be supporting anyone.

They could be. I’m really tired of having to point out that a healthy person with no children becomes a net contributor at a far lower level.

Bit different. Someone on universal credit is taking out of the system. Someone like OP is a net contributor, paying huge amounts of tax. Why should she have to pay for everyone else AND herself?

Over a lifetime, it is highly unlikely that a person on a low wage will be a net contributor.

Yes, maybe. But, it’s easy to reduce hours for a short period or increase pension contributions so everyone loses.

I don't expect the less well off to have any sympathy for high earners (even with our first child in 1984 we paid 50% of our net incomes after tax on full time childcare so this high cost is nothing new) but the UK has low productivity and all kinds of incentives for people to work less and pay less tax. That damages those who are less well off. So if you are badly off and selfish you probably do not want higher earners to be subjecf to effective upper tax rates of 63% (plus add 9% stujdent loan charge or even 15% on top of that) as it means that person works less. At my age I work less because tax is too high. My doctor siblings stopped Sunday work when upper rates were about 50%. Loads of people work less either because they don't want to lose child benefit or they don't want to lose the personal tax allowance and 30 "free" term time hours for 9 month year olds. Does the state really want all these people not working at full capacity who otherwise would be paying even more shed loads of income tax and NI?

It might be easy for some but it certainly won't be easy for all. Most people on high incomes with small children in their 20s, 30s will likely have very high outgoings for housing, etc too. In any case, that's a separate point.

It would be over 13 yrs of my state pension!

just to say, I emphasise with you - I earn slightly more than you, and was irritated when people I know who brought down 2 salaries to 99k each talked about getting their “20% back” on fees, whereas I got nothing, and constantly get berated for “being a high earner”.

@oh and to all the people complaining here saying “why should you get free childcare” - the answer is because we top 1% pay the most tax into this country and get NOTHING back.

So when low paid workers go to the shops they don’t have to pay any VAT? God I must have been conned out of thousands! If they dare to have a pint they get a refund of a couple of quid? I’ll remind the Batman next time I’m in!

Look at the stats. There is lots of evidence (in terms of net pay figures) to show ‘bunching’ around cliff edges (child benefit and free hours). So clearly many do reduce earnings.

Nothing?

You don't get your bins collected? Never used the NHS or the police? Never driven on roads? Never used parks or museums?!

I’m sorry but I havnt a clue what you’re saying!

That's true but why is it that we purely base contribution on the wage earned and tax paid? The contribution of someone working as a carer is arguably far greater than someone earning a very high salary in one of the late David Graeber's bull shit jobs. There are plenty of these types of jobs.

But they are not net contributors because they happen to pay VAT on goods? They take more out of the system, than they pay in.

Because same to lots of people, I've had to pay full childcare until my first turned 3, which was way before this new scheme. I'm not whingeing that I lost all of that money compared with people who will get the scheme from day 1, that's just how it is.

When they fill up their cars with petrol or diesel
Whej they pay for any service
When they buy cigarettes
When they but alcohol
When they pay councils tax….
When they go to their job as a care worker, shop worker, warehouse worker, hospital/care home/office ckeaner…

Allegedly theyre not contributing to society.

Don’t worry, this bullshit sticks in my throat too.

Earning six figures and complaining about no free childcare is beyond grabby.

Sell your home abx go live in a cramped 1 bed flat op - then you might have a point.

Or perhaps because it's entirely irrelevant to the point.

Er. I'm not sure why you are arguing the point. You said it would be easy to reducing earnings. I said that some could but not all. In this specific situation, the OP says she earns >£160k so it's hardly going to be easy to reduce earnings to £99k. If you are near the threshold, that's obviously different.
If you really want to talk about unfair cliff edges and disincentives to work, the loss of the personal allowance over £100k is the most ridiculous one of all.

The system disincentivises work at the higher tax level.

Unfortunately, the entitlement across all sectors of society is rather out of kilter with the UK's economic situation.

I have had two children go through childcare (1 still has a year left). My youngest has never received any funded hours (and won’t). Because he goes to provision that doesn’t accept free hours after the decimation of the childcare sector due to the funding crisis.
I make that choice.
I still think it’s inequitable.

Because same to lots of people, I've had to pay full childcare until my first turned 3, which was way before this new scheme. I'm not whingeing that I lost all of that money compared with people who will get the scheme from day 1, that's just how it is.

Same here but I'm pretty sure I paid a lot less than what it costs now.

You don't get your bins collected? Never used the NHS or the police? Never driven on roads? Never used parks or museums?!

But people get that even if they pay hardly any tax