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Tax Free Childcare - losing eligibility over £100,000

61 replies

123456kent · 26/11/2022 10:50

Hello,
My husband earns very near the £100,000 mark, and so in March we’d expect him to lose our eligibility for TFC and 30 Free Hours once he has a bonus/salary increase. Has anyone confirmed they are no longer eligible on the website? What happens? Do they take back any of their top ups? If we were to maximise on building up this account between now and then (to earn the maximum amount of top up) will it be stripped off us as soon as we say we are no longer eligible? Thanks

OP posts:
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thetulipsarelookinglovely · 13/12/2022 08:23

I would increase pension contributions to account for any bonus and salary increase so he ends up with the same adjusted amount. They base it off of gross salary minus pension contributions (the adjusted amount).

Completely agree with @Walrus6. Paying so much tax whilst being cut off from benefits like childcare help is really grating. Especially as we know couples with a higher net joint income who can still claim.

Janieread · 13/12/2022 08:25

user1497787065 · 28/11/2022 00:03

So parents earning almost 200k annually still get 30 hours free childcare? Complete madness.

I appreciate that childcare is expensive and when I had my children there was no government funded childcare but cannot accept that the taxpayer funds childcare at that level of salary.

I totally agree. That's crazy.

Frapped · 13/12/2022 08:28

UnicornRidge · 13/12/2022 03:45

Politicians pit people against each other.
£100k is not rich in London. There is not much left after paying rent, bills and childcare. £2.5k rent, £0.5k bills, £2k nursery.

You should direct your anger at billionaires and tax-dodging multi-national like Amazon and Starbucks.

This is a two person family though. Either one is a stay at home parent and don't need 30 free hours or they're both earning and actually earn more than a 100,000 which is is hardly breadline (even in London!)

Janieread · 13/12/2022 08:29

UnicornRidge · 13/12/2022 03:45

Politicians pit people against each other.
£100k is not rich in London. There is not much left after paying rent, bills and childcare. £2.5k rent, £0.5k bills, £2k nursery.

You should direct your anger at billionaires and tax-dodging multi-national like Amazon and Starbucks.

What's the other parent doing all day while the child is in nursery? Can't they get a job if 100k is such a struggle?

Frapped · 13/12/2022 08:29

Janieread · 13/12/2022 08:29

What's the other parent doing all day while the child is in nursery? Can't they get a job if 100k is such a struggle?

Posting goady threads on MN

Janieread · 13/12/2022 08:30

Frapped · 13/12/2022 08:29

Posting goady threads on MN

😂

UnicornRidge · 13/12/2022 13:49

Single parent family. Can't assume everyone on £100k have a stay at home spouse.

iknowwheretheothersockgoes · 13/12/2022 14:48

UnicornRidge · 13/12/2022 13:49

Single parent family. Can't assume everyone on £100k have a stay at home spouse.

I think there's an assumption that single parents can't also be high earners 🙄

theholidaymum · 01/01/2023 19:28

that's what will happen to my husband's bonus. We will out all the bonus into pension until DS goes to school. It just isn't worth it to loose all the benefits and paying 60% tax at the same time.

Confitofduckand · 01/01/2023 20:06

It is astonishingly unfair when you look at the other side of it.

A child living in poverty is eligible for 15 hours free childcare from the age of 2.

When they turn three, their richer peer gets 30 hours free childcare, but the child living in poverty still gets only 15 hours.

I posted on this a while ago on MN and was really shocked that so many agreed with the system because of the argument that non-working parents don’t need childcare. The reason those children are offered 15 hours at the age of two is to close the attainment gap that correlates so closely with poverty in the UK (and elsewhere) - it is quite difficult to get a job that fits inside 15 hours of childcare, so it doesn’t serve all that effectively as a ‘back to work’ scheme.

I had posted because, as a governor in a nursery, a child on a child protection plan (at significant risk of abuse), was not eligible for more than 15 hours. A social services case worker could have awarded 30 hours, apparently, but that wasn’t happening. Their wealthier peer, however, got 30 hours and a (paid for by parents, but inexpensive) hot meal (As governors, we had a policy that we would use the school’s budget to fund free school meals for the children whose parents earned below the FSM threshold in a primary school setting, but because the children from lower income backgrounds were only in for 3 hours a day, they missed the chance of getting the funded lunch). Even worse, during Covid, the 15 hour children were ‘bubbled’ in one room and the 30 hour children were put in another, so we had segregation by parental income.

I was chastened to learn from that MN thread that I started (… and from the board of governors on which I was sitting), that this is not considered unfair by many and is not the cause of the moral outrage that I had thought it would be.

Not much of a solution for OP, but it is my opinion that the highest income threshold on this scheme is generous (and that it is the poorest who should be funded 30 hours).

theholidaymum · 01/01/2023 20:34

Just to clarify that 30 hours “free” isn’t really free if both parents workings full time - in order to qualify both needed to work. We still will pay £1100 per month to top up outside of school hours and food/expenses we still need to pay.
my point is if the parents are already in benefits and not working, it’s better to get free food vouchers or some sort rather than asking for extra hours “free childcare “ which will end up costing them more. Unless the government will agree to pay a fair price for “free hours”, which I don’t see happening.
so many nurseries or childcare settings are closing down near us because of it. While we still pay a ridiculous amount of childcare fees just because of shortage of options.

UnicornRidge · 01/01/2023 20:59

@iknowwheretheothersockgoes This assumption is sad. Many female single parents earn much less than men. Then they assume other female single parents can't be high earners.

@theholidaymum Very unfair. Pay so much tax but get no help on childcare. In Denmark, they pay slightly higher tax on salary, but no council tax, childcare is a few hundred a month only.

happyfishcoco · 11/01/2023 12:13

Confitofduckand · 01/01/2023 20:06

It is astonishingly unfair when you look at the other side of it.

A child living in poverty is eligible for 15 hours free childcare from the age of 2.

When they turn three, their richer peer gets 30 hours free childcare, but the child living in poverty still gets only 15 hours.

I posted on this a while ago on MN and was really shocked that so many agreed with the system because of the argument that non-working parents don’t need childcare. The reason those children are offered 15 hours at the age of two is to close the attainment gap that correlates so closely with poverty in the UK (and elsewhere) - it is quite difficult to get a job that fits inside 15 hours of childcare, so it doesn’t serve all that effectively as a ‘back to work’ scheme.

I had posted because, as a governor in a nursery, a child on a child protection plan (at significant risk of abuse), was not eligible for more than 15 hours. A social services case worker could have awarded 30 hours, apparently, but that wasn’t happening. Their wealthier peer, however, got 30 hours and a (paid for by parents, but inexpensive) hot meal (As governors, we had a policy that we would use the school’s budget to fund free school meals for the children whose parents earned below the FSM threshold in a primary school setting, but because the children from lower income backgrounds were only in for 3 hours a day, they missed the chance of getting the funded lunch). Even worse, during Covid, the 15 hour children were ‘bubbled’ in one room and the 30 hour children were put in another, so we had segregation by parental income.

I was chastened to learn from that MN thread that I started (… and from the board of governors on which I was sitting), that this is not considered unfair by many and is not the cause of the moral outrage that I had thought it would be.

Not much of a solution for OP, but it is my opinion that the highest income threshold on this scheme is generous (and that it is the poorest who should be funded 30 hours).

their richer peer gets 30 hours free childcare

  1. both parents' work does not mean rich or richer.
  2. they get 30 hours of free childcare because they are at work and no one takes care of their children.
  3. why would a 3-year-old need 30 hours in school when one parent is at home? or even both parents are at home doing nothing?
  4. who get 30 hours are paid a lot of tax.
  5. everyone can have free 30 hours, when the child is 4 years old in this country. I think that is good enough.
theremaybetulipsahead · 12/01/2023 09:38

If it was solely about need for childcare then people on maternity leave wouldn’t be entitled to 30 hours, but SAHP with the same age baby not. It is about ‘rewarding’ those who work.

LongStoryShorty · 22/01/2023 00:58

I thought it’s if you earn 100k after tax, is that right or not?

nannynick · 22/01/2023 08:45

It's using data from your payslips. So if your gross pay is higher than 100k but your employer offers a salary sacrifice pension scheme, you can pay more to pension which sacrifices gross pay, resulting in a lower gross pay figure being reported to HMRC.

If your gross pay is higher than 100k and you pay in to a personal pension / SIPP then I don't think that counts as reducing your pay for the purposes of TFC eligibility.

Greenfairydust · 22/01/2023 08:56

Really?

Why on earth would someone with a family income of £100,000 expect the tax payer to fund their childcare?

This really needs some serious reforming.

LongStoryShorty · 22/01/2023 13:22

our family income after tax is about 9-10k/ month, but it all goes… we are not paying for childcare as I’m looking after the kids as I run my own business.

theholidaymum · 22/01/2023 19:29

Greenfairydust · 22/01/2023 08:56

Really?

Why on earth would someone with a family income of £100,000 expect the tax payer to fund their childcare?

This really needs some serious reforming.

You need to remember that these people are also the one paying the most into “tax payer money” so why they can’t get help with childcare?

they also pay a ridiculous amount of taxes any if one earns over £100k and the other parent not as much or none.

Penfold1635 · 19/03/2023 12:16

I know it sounds like a lot, but two children in full time nursery near me is over £4000 a month. One person on a £100k (take home around £5500), after nursery costs there isn’t much left!

rwalker · 19/03/2023 12:21

user1497787065 · 28/11/2022 00:03

So parents earning almost 200k annually still get 30 hours free childcare? Complete madness.

I appreciate that childcare is expensive and when I had my children there was no government funded childcare but cannot accept that the taxpayer funds childcare at that level of salary.

There’ll be paying a huge amount of tax why shouldn’t the get the 30 Hours there not cash cows supporting the rest of us
and they only earn that much because they got off there arse

I earn 29k a year btw

kashka81 · 17/08/2023 17:58

My husband and I earn £177k/year combined. Still below £200k but I bet a lot of people here would say we make really good money. Now, let me break it up for you...

We live in London and my son's nursery costs us £1.7k/month (some people have to pay a lot more than this, trust me). The other son's afterschool clubs etc come up to around £400/month. Mortgage on a London-based property costs us just under £2k/month (again, this cost can be a lot higher). That's 90% of one salary gone, and I haven't even factored in bills, commute, grocery shopping, car insurance, petrol etc. Imagine if this was to be paid by one, single parent... or if we had two kids below the age of 3 to pay childcare for.

We struggle to save anything atm, and the 30 free hours scheme will really help our household budget. I understand many people here live outside of the large cities but the cost of living differs depending on where one's based so please bear that in mind when posting such comments.

rwalker · 17/08/2023 18:01

user1497787065 · 28/11/2022 00:03

So parents earning almost 200k annually still get 30 hours free childcare? Complete madness.

I appreciate that childcare is expensive and when I had my children there was no government funded childcare but cannot accept that the taxpayer funds childcare at that level of salary.

Why shouldn’t they they’ve probably paid nearly twice as much as my entire salary in deductions
I don’t begrudge them 30 hours
and thank you for subsidising the rest of us

Mammyloveswine · 17/08/2023 18:14

My heart bleeds..

Perfect28 · 17/08/2023 19:25

@kashka81 living in an expensive place is a luxury and a privilege many cannot afford.