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!

I’m not disputing that. I absolutely earn enough to pay for my childcare. But paying less tax by saving for my future retirement is a completely rational decision in the system we have.

Yes probably the 30 hr relief should be tapered so that whilst you still lose it all at 100k but lose some from 80k - that would save the government some money and avoid the cliff edge

although anyone moaning on those sorts of salaries really isn’t reading the room

“I take home significantly more than the average person even after childcare costs” isn’t a reason to feel sad

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

This just about sums it up.

No she is not.

I don’t have a hatred of high earners. I do get fed up with people complaining about all the state support they don’t get while also trying every way to minimise their tax burden, while also complaining about the lack of decent public services, while also moaning about people (at the lower end of the income scale) having children they can’t afford.

Everyone wants to be ok the take, no one wants to pay for it. From the person on UC to the person earning £160k and complaining they have to pay for their own children.

My thoughts entirely

I wonder if there is any analysis on how many people are salary sacrificing and working part time to enable themselves to claim the free hours and tax free childcare.

I know a lot of people doing it - and that was just for the 15 hours at age 3.

At 30 hours from 9 months the incentive to do so is far greater - larger amounts over longer periods, and a great income band over which there will be no additional take home pay.

I suppose we will not see the impact of the new 30 hours scheme until next year, given it’s yet to start.

And that is bloody dreadful! You should be earning a much higher salary (nurses are underpaid), and yes, you should have free childcare

Maybe cut your hours for the sake of your child rather than the sake of your bank balance. Just a thought.

Agree

It comes down to should it be universal or not. Perhaps folk above a threshold should pay for the NHS as well and if not why? Why, because this one disproportionately affects women. And women, especially those high earning have to face down every single bloody hurdle possible. I know so many previously high earning women who have given up work to take care of children. This country is desperate for net contributors to work and we should do all we can to encourage them to do so. It’s only sound financial policy.

They don’t lose all the tax on the money you pay into your pension. They’ll tax it when you draw it down in retirement. It’s just deferring the tax.

You are not losing anything by not being able to claim for childcare. You are just not receiving a benefit that others on lower incomes can access.

I earned a similar amount to you when my children were little and there’s no way I would have begrudged not being eligible. In the same way I understood that I couldn’t claim housing benefit or universal credit.

Our taxes would be significantly higher if all those who didn’t need support received it! I remember being given £250 when my first was born. It was automatic back then to all families. I thought it was mental. Me and DH had a combined income of nearly £400k and the government was giving me £250 to help with new baby costs. What a waste of government money!

You and op have a point.

Still taking home 8k a month - paying for their own childcare for a limited number of years isn't going to bankrupt them.

@ChildcareCost - what about not being eligible for the other benefits listed - its not fair you cannot claim UC or Housing benefit because you earn too much....

I never ‘bitched about a nurse receiving childcare help’ though, did I.

I support universal childcare, because it helps women to be independent.

I object to being excluded, not to other people getting it.

there will be people who had ton of opportunities being born in western country with no visa issues and free excellent educated moaning how privileged you are (whereas they had same opportunities and more than the rest of the world and just didn’t take them

It comes down to your last sentence, a lot (not all) of the time. Saying the unsayable.

They gave up work because they felt hard done by? On that kind of money?

I am sure someone else got their job so the economy didn’t lose out

It was no different under the Tories. This isn’t a party political issue.

The absolute tone deafness of this complaint blows my mind.

Just get a much much lower paid job and you'll be able to claim all the benefits other people can then hun.

Tiny violins out for OP. Or big ones , OP can afford it. I think you probably aren't the part of society that need funded childcare OP, did you ever consider that ?

On that salary the taxpayer shouldn't be funding your childcare.

It's a contributing factor for the huge NHS waiting lists as no Dr wants to take any overtime for this reason (as we can't salary sacrifice into pensions like most high earners can)

Given your huge salary, you're being VVVVU! That scheme is to support low paid workers so they can actually work, not to give free stuff to people who can afford to pay for their own childcare. What planet are you from???

Households earning up to £198k are eligible to claim.

I don’t think it’s about neediness or low paid workers - if it were the cut off would be vastly lower.

This whole thread has to be a joke.

Assuming it isn't and you are for real. Your problem is is not any thresholds it is your mindset.

You are thinking you have lost.

You are earning 160k per year. You've won.

When I was working low wage with 4 children as a single parent I was supported by a top up UC. That did not stop me wanting to pursue my career and stop claiming it altogether. I've now done that and I am proud of myself for working so hard. I earn nothing near what you do and I have 4 children at one time three were in wrap around care and it was hard financially but I worked through it.

If you cannot manage childcare for ONE child there is something wrong with your spending.