AIBU to hope the £100k cliff edge for funded nursery hours is removed?

[horchatatresleches]

News is that the education secretary is looking at nursery funding but it’s unclear if it’s to reduce or increase the support available at either the upper or lower thresholds. AIBU to hope that the harsh cliff edge which stops all nursery funding at £100k is removed or least replaced with something tapered so that people aren’t losing money for being marginally above the threshold?

Well they would still be net payers.

They pay £40k in tax and would get £4k back in childcare. Plus £400 if they also got the tax free childcare allowance back as well.

Either will do.

And furthermore, childcare usage will be temporary; the high end talent will be allowed to go from strength to strength, earn more and pay more in tax in the long run, rather than stifle their career to minimise how harshly their success is penalised.

Which is precisely why we shouldn't be making these problems any worse by enacting stupid policy deterring clinicians from working more in the NHS.

Here’s both:
ONS methodology
https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/methodologies/theeffectsoftaxesandbenefitsonukhouseholdincome
Bitesize statistics
https://www.bbc.co.uk/bitesize/topics/z9p3cdm

The BBC one doesn’t work and the ONS is eight years old and doesn’t contain any stats.

Afaik, GPs have been funded to take on any allied HCPs, like paramedics, physician
associates, etc; but not GPs? New GPs have struggled to get jobs. It’s about funding in primary care?

No, the NHS and state education should always be free. Households getting over £100k should be able to fund their own pre-school childcare. 🙄

This is like working in a nursing home. I think it’s reached the point where you could contact the Office for National Statistics directly about your issues with them using maths .

But can you not see how that dogmatic view point is so unfair and counterproductive?

A person earning £125,000 p.a. takes home £6,504.79 per month. Nursery prices can be £100 per day, so costs can easily knock on the door at £2k pm. This person has paid £3,536 in tax and £375.88 in NI, so nearly £4k in tax. I think they are bearing a pretty big load as it is without this cliff edge. Now it is good, but this is not the land of milk and honey people assume given the price of property and school fees (thanks again, labour)

Furthermore, the cliff edge promotes:

Not attempting to progress
Going part time
Not having more children (scrapping 2 child limit feels particularly egregious here)
Using pension contributions or similar sacrifice schemes to reduce salary

None of these are productive for a country that as a whole, is struggling with growth, productivity and a top heavy increasingly welfare dependant population.

Those who support the cliff edge seem driven by envy.

On GPs specifically, trained GPs are working proportionally fewer hours in the NHS than they used to.

https://www.health.org.uk/features-and-opinion/blogs/the-gp-workforce-paradox-more-trained-gps-fewer-in-nhs-general-practice

We do not want to do anything to make this problem worse, and while the cliff edge is even more dramatic now there are funded hours at 9 months, it's not a new issue by any means.

It’s individuals not households, but you are absolutely right that pre school childcare funding should stop at £99999.99. It wouldn’t make sense otherwise.

"should" being the operative word. And if salaries had risen at the rate of the cost childcare,then they would. But due to the funded hours, childcare costs for non funded children are enormous and wages have stagnated. Or alternatively, if the cap had risen with inflation then it would also be ok. But neither has happened.

Absolutely.

I think it would have been much better all round if, when it came up in the original discussions of introducing tax credits, there had been a raft of council/state run nurseries opened.

The money would have cycled from tax credits, and now funded places, back into the system rather than private settings.

Also the initial surge in childcare costs when tax credits came in wouldn’t have happened as more places and no balloon pricing in the council/state places would have kept other prices down.

So many of the original tax credit plans were excellent, yet in the end it was so poorly introduced.

Completely agree and am in this boat
Taking 3 weeks unpaid leave this coming summer
Have no wish to reduce waiting lists for no additional income when the marginal tax bracket plus childcare cliff edge are taken into account.

Everyone should benefit from public services and childcare should be a public service. It enables people to work and we want people working more particularly those who pay or could pay a lot of tax. All that is happening at the moment is people are sacrificing more into pensions and/or working less because why work more if you will end up worse off. I paid loads into my own pension for the same reason. It shouldn't nark people that I did because I pay so much tax and take so little out that its not wholly unfair and my pension will mean I'm less of a burden when I am old and believe me when our kids are working they'll have even more of a problem than we currently have with an ageing population without sufficient funds to support themselves

My nursery provider is £2200 a month and isn't the most expensive in the area.

We should be encouraging those earning in the 100k bracket to keep earning (and basically pay more tax). Especially when they are our doctors, dentists and other necessary services.

Instead the combination of the drop in personal allowance and free childcare often means that those earners choose to earn less.

Its not a case of “the rich” whining about free childcare, it’s people individually making sensible financial decisions for their family circumstances that ultimately mean the country gets fewer full time doctors and a lower tax take.

Add in that why shouldn’t high earners be allowed to use the service that they essentially subsidise for everyone else!? Ultimately if they were entitled to the free childcare they’d probably be earning more money, paying more tax and contributing more to our economy and society!

I also hope they remove the cliff edge for removing the personal allowance.

The cliff edge is stupid and there are a lot of people deciding that it is absolutely not worth working to go beyond it. The last thing the country needs is doctors for example deciding it’s not worth their while to work full time and yet that is the system that has been created.

Childcare provision needs another look. The government doesn’t pay nurseries enough and the whole sector feels precarious. We didn’t get any support other than the 15 ‘subsidised’ hours from 3 as we have been a high earning household. I reckon we easily spent £85k on nursery fees for two children and continue to pay for wrap around care. We could afford it but absolutely felt it during the nursery years.

It’s not really a sustainable position for the economy if high earners with children basically just spend all their money nursery or mortgages which is the situation we’re getting close to. My old nursery is now nearly £100 a day which is private school fees territory. You can’t really take the position that private schools are for the elite, luxury goods etc when nurseries (which are essential to enable someone to work) basically cost the same yet everyone is expected to suck up that cost.

Think they should pay for the NHS then and pay for state school?

Since childcare is required to work it makes more logical sense that anyone who works and therefore pays tax should get subsidised childcare. Ridiculous in SE England to work a usually stressful / high responsibility job to earn £100k (£65k post tax) then give 50% of your net income to the government while others get the same for a fraction of the cost?

The comparison doesn’t work, unless there is a huge, free at provision childcare industry.

The government doesn’t get your childcare costs. Nurseries are private businesses.

@blossomtoesyes obviously not, but childcare enables the ability to work and the government get income tax! They should be incentivising people to work, especially high earners, not creating a scenario where ppl purposely drop hours for subsidised childcare (or women stop altogether / let their careers plateau)