Tories campaigning to remove the childcare maximum income threshold

[FlakyPastries]

Kemi Badenoch has announced that the Tories want to remove the upper income threshold on childcare.

This means all working families will be able to claim it, including those earning over £100k.

Do you agree with this policy?

My baby’s nursery charges £30,000 and the free hours and tax free childcare is worth around £15,000 - so this is quite a significant benefit for those currently unable to claim.

It was a Tory policy, they conveniently forgot that didn’t they…. The cliff edge is an issue but I don’t see why those on incomes over a certain level should get taxpayer support, that money should be used for people genuinely struggling. I strongly believe it should be on household income not individual income with a threshold of £150k, ditto child benefit

I don't feel that strongly about this policy either way, but I find it a very odd choice for the Tories to have decided to focus on. Just not very politically astute!!

Yes it’s a good idea . High earners need something for the tax they pay .

Yes, I fully support it. This policy disproportionately hurts women.

It hurts women whose partners are the breadwinner, when it becomes better for them to stay at home than pay for childcare because the result is a breakeven.

It hurts women who are in careers and have to turn down full time hours, or promotions because they would net be worse off in doing so.

It hurts the economy when parents are forced to save bonuses into pension plans so they can reduce their adjusted income below £100k: money which otherwise would be in circulation in the economy now.

If they simply inflation linked the cliff edge since it was introduced it would be c£135k.

It is the right thing to do. Firstly, it discourages the most productive from being productive, and productivity is sadly lacking in our economy. Secondly, it was never designed to be catching the level of earners that it is now; fiscal drag is ensnaring more and more earners, just as it is with frozen tax thresholds. Thirdly, its fairness. Why should you take home less when you earn more? If you have 2 children in full time childcare you would likely need to earn £150k or more before you had the same take home as someone on £99k. Its messed up.

I do agree even though my dc won’t benefit.

I agree with Kemi. I’m nowhere near the threshold and my dc are grown but the behaviour changes around thresholds that disincentivise work/earning are generally a bad thing imo. I’m on over £50k but end up in the 20% bracket due to pension contributions. A few years ago my overtime was also taxed at 20% but as I’ve got more senior and wages have got higher so OT and any locum work is 40%. It disincentives me to work harder when I’m paying 40% on labour that someone doing the same job part time only pays 20%. VAT cliff edges are another killer. Restaurants shutting half the week or hotels closing rooms because a few extra quid pushes you into another rate and you are down by £1000s for doing more work.

People should not be in a position where if they work more hours or take on a better paid job with more responsibility and end up worse off than if they didn’t.

They also froze the tax bands didn’t they?

@bababamama do you feel the same re the state pension?

Yes, I do agree with them.

The current policy is poorly designed, a cliff edge like this shouldn't exist.

Motivating the population to work hard and save has to be the aim of welfare policies.

Can you explain this. I honestly don’t understand why non working families should get childcare paid. Aren’t they at home and can be looking after their own kids?

@Catza what would non-working families do with this free (sorry, taxpayer funded) childcare? Cook, clean? Pursue hobbies? Go for coffee?

All the things that I don't have time for, or need to squeeze in late at night or in wfm lunchbreaks, because I'm either working or looking after my child.

Maybe a morning a week so you can apply for jobs and attend interviews, other than that, hard no from me.

Its cos this one is a cliff edge and cliff edges are particularly stupid.

But it isn’t ‘subsidising’ childcare. It is taking less tax from them to recognise they have childcare costs to pay. Anyone on over £100k is paying a lot more than £15k tax so they are paying for their own childcare via transfer to the government and back.

Work cash in hand perhaps.

I understand that - but to my mind, that still doesn't justify making people redundant to pay for it. As I say, I'm not massively against the policy, but it's all about priorities, isn't it? And to my mind, this seems a strange priority for right now.

This is possibly a stereo type and definitely a generalisation, but some children with both parents who are at home and not working are probably better in nursery where they are away from screens, are being taught skills ready for school and are being fed better foods.

Yes I do. We have a combined income of around 120k. Thankfully no nursery fees now but we pay for wraparound care at school to the tune of £350 per month for 2 DC. Nothing like nursery fees of course but still an awful lot. Still waiting on Labour’s magic free breakfast club. We pay the most tax. We don’t currently get anything for free including school dinners. I did not agree with the roll out of free dinners for anyone on UC.

I have no issue with this but also wonder how this balances with her argument to insist people take more responsibility for their own lives, roll back the welfare state etc.

The priority is growth, and if are best people and higher earners go part time, or plough a large percentage of what would be disposable income that would have been spent into pensions, we're running in treacle.

We need to see these higher earners as an asset, not cash cows.

Why? When there’s a limit people take actions to get themselves under that limit. How many people who drop their hours due to this sort of policy increase their hours when e.g. the kids start school? Not everyone by a long, long way. There is a long term hit to productivity and tax take following these stupid, regressive policies. Massively economically damaging.

I completely agree about the importance of growth - that's why to me, advocating for redundancies in the creative industries and the green economy - two of the industries with the biggest potential for growth - feels counter productive. I am massively wary of any party claiming they can find £700 million just from 'cutting red tape'. It just doesn't feel like properly thought through, pragmatic policy making to me.

Hugely politically astute! It shows they understand and want to encourage growth! That’s massive! If we get growth we get better public services and more money in our pockets. The lack of growth is THE reason for the cost of living crisis!

I agree it is politically astute. It says we are the party rewarding hard work and encouraging economic growth, not encouraging minimal work and welfare dependency.

What is the actual evidence that providing funded childcare for a small number of high earners is going to drive growth in any meaningful way?