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 think you’ll find I’m not. It’s still not a party political issue.

I don’t think YABU to query the fairness of it. In your shoes (depending on how much you do earn and your feelings about continuing to work FT and have career progression) I’d be inclined to scale back for a few years. The sudden, rather than tapered, cut off is unfair, IMO.

It’s odd.

You have to wonder how much this policy has already (and will in future) impact productivity.

Like it or not, people aren’t going to work a day a week for free - and the loss of childcare help plus removal of the personal allowance create some crazy tax rates.

I’m not really sure why people are accusing me of not wanting others to get it (which I’ve never said) or that I’m pleading poverty (as I’m not) - the issue is that the scheme creates enormous incentives to work less and pay less tax due to the rates it creates.

The op is the (higher) taxpayer in this scenario. It’s not as if she’s not contributing.

This. According to HMRC there are twice as many people earning £99k as earning either £98k or £100k.

It shouldn't be a cliff edge but there are simple ways around it, OP.

There is a cliff edge, and it isn't particularly fair and is probably even counter productive. However on £160k, you are not at that cliff edge. You are way beyond it. If it were up to me it would be universal, I imagine it would pay for itself but it's not. Just one of those things. Suck it up.

I paid over £30k in just income tax and employee’s national insurance on my salary last year so I’m not apologising for my much tax I pay. I volunteer for charities helping disadvantaged children and advocate for social mobility. I vote for parties that want to help people on lower income and I oppose the two child benefit cap. However, given a choice between voluntarily paying more tax or not, then I’ll choose not, thank you.

And nursery fees don't last forever although at the time I found it difficult - two in nursery with limited vouchers was paying out more than I earned - but it was for eight months only. Lived on DH money and savings

I sympathise with you but you won’t get much sympathy here! My husband earns over the 100,000£ and I work part time as a nurse.. we are not entitled to anything so I work to send my children to nursery so that I don’t loose my qualification as a nurse- just holding out until they are both at school! It sucks beyond and feels completely unfair because we are so much worse off than many of our friends who are on combined higher incomes and get all the support- makes no sense!!

you are brave OP posting this 🤣🤣

my husband earnt over the threshold so we never benefited either. My part time wages basically funded childcare so i ended up stopping work until the free 15 hours kicked in so I could go back part time. This doesn’t seem like the best idea from the government - effectively pushing someone who was working into not working whilst simultaneously paying for childcare for those on benefits who are not working.

what people don’t realise is what we are asking for is participation in the programme our taxes are funding. Middle earners like OP are the ones getting humped in taxes. It’s as if the NHS said if you earn too much you have to pay for your care. If you bake the cake, you want a slice. Now we can’t even have the slice. Eventually everyone will leave… other countries will happily take high earners and offer them good public services in return.

No, the objective of the welfare state is not to take money from higher earners and give to lower earners while excluding them from those services themselves.

What next, excluding higher earners from schools and the NHS? By your logic that is the correct thing to do, as helping higher earners through accessing these services isn’t the purpose of the welfare state.

You can’t expect higher earners to keep having to pay higher and higher rates of tax - but then start excluding them from the (almost!) universal benefits that tax is funding.

I contribute regularly (food and money) to food banks.
I can't get anything from a food bank because a) I'm not skint enough b) I don't need to.
Who can I complain to? Should I be absolutely fuming? 🤔
Get a grip OP. You don't need it, and despite your very welcome and valuable contributions, you can't have it! 👍

Unfortunately that’s just the way the system is. You won’t get sympathy on here, even if you are a woman and successful in your career.

Personally I believe there should be some childcare for all, no matter salary, albeit much lower hours. The social interaction in childcare settings is instrumental in development and safeguarding to a degree.

Unfortunately when there is no free childcare to all, some families rely on their own family and decide not to use other options, whether their salary dictates they can afford it or not.

It’s not just people like OP who fund the welfare state for everyone

including all people ( pensioners etc) than something like 50% of us are net contributors so that’s people on way less than 160k - the median salary is under 40k

this was including education and health

I understand perfectly. I mean it's not exactly complicated. Op earns too much to qualify for assistance they'd be entitled to if they earned less. They also pay more tax. They feel hard done by. I've studied the depths of my list of things that bother me and this isn't on it. If op wants to start a campaign to change the situation a post on mn is not the way to do it.

So work less and make yourself eligible

Many people work a day a week for free on much, much lower salaries. Teachers, social workers, nurses, care workers all consistently work 45/50 hour weeks for no additional pay. You have the privilege of choosing to work fewer hours and still have a great income by any standard.

Someone who earns £100,001 needs to earn another £37k before they are financially in the same position as someone who earns £99,999. That £2 pay rise is actually a £12k pay cut once you factor in the childcare costs, and all of your pay rises and promotions for the next £37k are just to get you back to where you were financially when you earned £99,999.

If you can’t see that as not really fair and a huge disincentive to work harder and increase your earning capacity, then you’re missing the entire point of the OP.

I can see she feels hard done and can see why by but I can also think it’s a pathetic attitude

I’ve voted Conservative all my life (I can’t stand Labour), and I agree with Blossomtoes in regard to this thread.

It's an exceptionally stupid scheme.

I think OP you'd have done better to focus on the idiocy instead of fairness.

the problem is treating people who get off there arse and do well like cash cows generally backfires they ether cut hours or clear off so nobody wins as they contribute less in deductions

No I fully understand the point she’s making, I just don’t agree it’s unfair to expect someone earning a very good salary to also expect state support for childcare.

Yeahhh I gotta agree with this. Sorry OP.

Its tough but honestly on that salary I think you are a little out of touch complaining about it.

There has to be a limit. Or where does it stop? Bankers on £350k + getting it?!

In the nicest possible way I think coming on an Internet forum with many different walks of life while there is a cost of living crisis and people are using food banks isn't really going to get you a load of sympathy...