Childcare reform: what about parents not on benefits?

[justwren]

So universal credit claimants will be entitled to more help with childcare costs as announced by the govt this week.
What about those who aren't on benefits?
We're the ones who have to be finding 14k a year for one child in nursery. I'm not entitled to any benefits because my husband earns £34k a year. That's hardly millions!

Why is there no support being offered to the families who are having to pay for it in its entirety?

Good insight. And ridiculous. Productivity and tax revenues and living standards will not rise unless they address the punative thresholds at every level of the tax system.

My biggest childcare bill was £2400 a month. Two in full time wrap around, one toddler in day nursery full time. If UC hadn’t covered a huge portion of that (I was on a much lower wage back then), I’d have been fucked post divorce, out of a job immediately and out of the work force for fuck knows how long, plunged into poverty and all the issues that brings.

Luckily, my eldest started Y7 the following year and my middle is now in Y7 so my bill is c.£1000 a month for an amazing childminder.

@ScruffyGiraffe I've been really interested to read your posts. I agree there's lots that needs reforming, but I do wonder, could there be a perverse incentive to what you propose? Our taxation system is based on people being taxed as individuals (and was a hard won right for women, who a few decades ago were taxed as an appendage to their husband ). My thought about your idea is let's say a single mother had worked hard in her career and was earning 50k. In your scenario she's taxed as a couple would be on a joint household income of the same. Surely it's going to be a disincentive to that single mother to get into a new partnership/marriage? And conversely, is it going to be a disincentive to both partners in a marriage to work (or to work to capacity) ? I'm just interested in your thoughts because while I understand what you're saying, i think there could be all sorts of knock ons. Another one I've just thought of is what about house shares or other living arrangements where people not necessarily married are living in the same household? I feel the right to be taxed as an individual (not as an appendage or part of a household) is important. Oh and what about a situation where in a separated couple , the child is with the mother most of the time but spends some days/ weekends/ nights with the father; does the father also get taxed less? Is the tax the mother pays variable depending on how much the child is with her? I mean, there's a hell of a difference between say a single widowed mother who has the children 24/7 and a single mum whose children spend several days a week with their dad.
Really interesting posts, but as you can see, lots of questions swirling round!

Yes it’s ridiculous. If they can’t help everyone then surely it should be those entitled to child benefit to include the middle earners. Or some other way of including more people. But to just help people on UC is not enough.

I mean, there's a hell of a difference between say a single widowed mother who has the children 24/7 and a single mum whose children spend several days a week with their dad.

Yes I was thinking that. And what about situations where the dad is around and paying decent child support, it should be the dad where possible that pays for the child not up to the government. There would be so many variations it just wouldn’t work. I also think the right to be taxed independently is important.

Only working parents get the childcare element of UC.

UC is not necessarily an out of work benefit.

@SquidwardBound that doesn’t help most working parents still. The average person earning 30-35k is still going to struggle paying £1k per child childcare a month

@freyamay74 In countries where tax is on a household basis it doesn't literally mean all adults in the household: if you have adult DCs living at home they have a separate allowance as an individual "household". If in a shared house with friends/ lodgers etc all have a separate allowance. What it means is that a family unit will not get double the allowances if everyone else. The same way that benefits operate now (because that benefits the Government, because they have to pay less out...) but not tax (because that would not benefit the Government, as they'd have to cease effectively double-taxing single adults/ parents).

I do understand why women campaigned for separate tax in the UK, given women's plight at that time: very few options to own property in their own right, or leave abusive marriages, or own property in their own right or progress careers properly or even have bank accounts in their own name. But now, this system is actually disadvantaging many, many women and children. Society has changed, we are able to leave abusive situations far more easily. Men also walk away from their children far more often, a double edged sword. So what was thought to be beneficial for equality at that time is now actively piling more disadvantage on the already disadvantaged.

A couple co-habiting or a married couple would get a single allowance. By default this would be split 50/50 so women in couples would still have financial independence and autonomy. If it suited them better to distribute it differently they could - by opt in signed by both parties that either party could revoke at any point - redustribute the allowance between them as they see fit. This would also remove the anomalies in terms of one dual parent household losing child benefit for example at £60k and another being able to earn £120k before that happens, just because they split work/ childcare in different ways. It is a simple system that would be fairer for everyone and would not disadvantage women in relationships at all: many would benefit in fact.

It would simply remove the discrimination against households with only one adult, who at the moment are being hugely penalised.

In terms of perverse incentives, I'd argue that actually the current system is what provides those: making it financially ruinous still to leave bad relationships. It is hard enough anyway surely to make that choice and raise a family on one income, and do all the work yourself, you don't need double tax levied to discourage it further! Setting single parents on a level playing field, being able to earn the same amount as other families before being taxed or paying higher rates etc would be basic fairness. Obviously as with benefits, you would need anti-abuse measures to stop the very tiny cohort of people who'd consider pretending not to be in a relationship for the purpose of ripping off the state but those systems exist already for the purpose of benefits calculated per household and would identify those same people pretending to be in that situation for tax purposes. The amount of fraud involved is tiny, compared to the economic benefits to be had by reducing child poverty and enabling single mothers to work more, not having huge career gaps and losing their earning potential, increased productivity, a small reduction in tax rate in return for far increased tax revenues over a lifetime...

Thanks for engaging with this discussion.

Yes I was thinking that. And what about situations where the dad is around and paying decent child support

Again, a vanishingly small proportion do that, sadly.

@Overthebow
it should be the dad where possible that pays for the child not up to the government.

Absolutely, and having a proper system for enforcing this with significant penalties for dads who avoid paying would help massively.

At the end of the day, unless one parent has actually died, children have two parents, whether those parents are still together or now. You can split up from a partner, but you don't divorce your children. Of course it should primarily be the parents who pay for the children they're created, not 'the government' - which in reality means taxpayers, often strapped for cash parents themselves who are struggling to pay for the children they chose to have themselves.

You don't work... so what do you need childcare for? I've a child with disabilities, I'm a single parent, I'm currently unemployed due to child and therefore not entitled to childcare either. So what's your fucking point? If you don't work, then look after your child yourself. Problem sorted. Stop bashing everybody else. Believe me, I'd rather be working and I'm sure my daughter would rather not have a disability rather than living off pittance.

But yes obviously, another thing that absolutely needs changing and is a huge nepn red flag for our successive Governments' attitudes to women and children is the dire state of child maintenance. The minimum rates need to be at least doubled if not tripled as a percantage of earnings to reflect what it costs to raise a child, how much of their income they'd be contributing to that if they were the parent who hadn't scarpered. And it should be enforced with the same enthusiasm the Government show for enforcing for example non-payment of Council tax: trashed credit record, eventually imprisonment.

But regardless of that there will always be many lone parents. And increasing proportion in fact, partly because we have now encouraged women to leave abusive relationships. Why would we want a system that on top of them trying to do two parents' work and be the ones who stick around to pick up the pieces, also then want to tax them more than a couple on the same income even if they do what people say they want them to do, and work full time to provide for their children themselves? It makes no sense at all.

This would also remove the anomalies in terms of one dual parent household losing child benefit for example at £60k and another being able to earn £120k before that happens, just because they split work/ childcare in different ways

I don't see this as an anomaly at all! It's comparing apples and oranges. If a family choose to have a SAHP and the other parent earns 60k, then if losing child benefit is such a deal breaker, then there is still one parent with capacity to work! And any household with a SAHP had no childcare costs, half the commuting/ transport costs ... it's a pretty privileged position. A household where the parents earn 60k each are likely to have huge childcare bills (there's quite a lot of hours and pressure to earning the big bucks) plus there're probably running two cars etc

Being taxed as an individual, on what I as a woman earn in my own right, and not being penalised just because I earn on a par with my husband, is not something I'd want to see changed

A couple co-habiting or a married couple would get a single allowance.

@ScruffyGiraffe so are you actually proposing a tax rise to two parent households then? Families like mine would have their tax allowance cut in half and pay more tax than they currently do? No thank you, we pay enough already. I wouldn’t support that at all.

At the end of the day, unless one parent has actually died, children have two parents, whether those parents are still together or now. You can split up from a partner, but you don't divorce your children. Of course it should primarily be the parents who pay for the children they're created, not 'the government' - which in reality means taxpayers, often strapped for cash parents themselves who are struggling to pay for the children they chose to have themselves.

Ok so in my case, my children's father isn't dead. He left when they were babies, though. And was then arrested for such awful crimes that he can never, ever see them again.

We were married for years before having children. He had a successful career, good income, was very stable, so it seemed. No red flags. Even a close friend in this area of policing who knew him well had no idea, no bad feeling about him. Nobody did.

So short of a crystal ball please do tell me how I should have foreseen him walking out on two babies? And why I should be taxed more than other households with the same income as me even though I am just one person with only 24 hours per day to do all earning and childcare?

This is the problem: there is still this pervasive attitude that single mothers must deserve it. You must just be an idiot, have married someone who was appalling when someone smarter like them would have magically known somehow what would happen.

You don't. You can't. It could happen to anybody. And to actively penalise the decent parent who sticks around and does everything and deep down still hold these prejudiced views that "oh well, that would never happen to me", "it must just be poor judgement on their part", "I'm sure they brought it on themselves" etc, is so, so wrong. I hope (and I mean this genuinely) that you don't one day find out for yourself how wrong those prejudices are.

For parents who are not together the parent who does not have residency should be pursued by the state to provide for their children
surely that would help single parents

No. I'm proposing that the same tax allowances you get are extended to single parents: that they can also earn £25k per year tax free, can also earn £100k before paying higher rate tax and £100k before starting to have child benefit withdrawn, etc. The fact you can't see how much single parents are disadvantaged by not having the options to utilise those choices that you as a couple can says it all really.

“Being taxed as an individual, on what I as a woman earn in my own right, and not being penalised just because I earn on a par with my husband, is not something I'd want to see changeD”
Totally agree

Well yes. I do think it is unfair, and a single allowance per household would make it fair for everyone as it could be split as they see fit. Why on Earth should any household get to keep more of their earnings just because of the particular split of childcare and working they've decided between them?

Single parents obviously have neither benefit in the current system: don't get to utilise the double tax free allowance etc that dual income households have, and also have high childcare costs when single earner households have free childcare with one parent at home. So effectively we're taxing the most on the households with the lowest capacity to work and pay, that have only one adult and only 24 hours per day not 48 to do both of those things. That is regressive and ridiculous.

You would not be "penalised" for earning on a par with your husband if what I've proposed was implemented. It's just that other people would not be taxed more than you are for the same household income.

I haven't suggested that at all though.

You absolutely cannot compare two people going to work all week though, with one person going to work all week. People need to be taxed as an individual.

And most people are not single parents because the other parent is dead or is such a horrendous criminal that they cannot ever earn money or have anything to do with their kids again! Most absent parents are perfectly able to continue earning and should continue to pay for the children they chose to have!

Tbh I feel it's outdated thinking @ScruffyGiraffe that married women are all assuming single mums are somehow feckless and undeserving. That's nonsense

Completely agree with all of this.

I'm not comparing two people going to work to one person going to work. I am saying that all households should pay the same amount of tax on the same amount of earnings. That it is unfair to tax a lone parent more on the same income as another household that has two adults in it. That anybody could argue against this is frankly mind boggling.

It would indeed. In my case contact was ceased when said father threatened my life amongst other violence. Everything therefore went through child maintenance. Allegedly they can't touch his money as he apparently doesn't even get benefits. Yet strangely he's managed to get an engagement ring for his next victim. In the last two years I have had probably £500 if even from him towards my child's upbringing. Doesn't stretch far when the child has disabilities which make it difficult for me to find employment. They don't intend to review this until October apparently 🙄 I agree that the state are useless at holding people like him accountable.

Tbh I feel it's outdated thinking @ScruffyGiraffe that married women are all assuming single mums are somehow feckless and undeserving. That's nonsense

Well if you are arguing that a lone parent should be continued to be taxed more than your household is taxed on the same income, despite them trying to do what you do in 24 hours per day not 48, then you are absolutely entrenching disadvantage and penalising people who are already having to do far more than you, without a higher proportion of their income being taken for tax on top. Effectively that is lone parent households like mine subsidising households with two parents. If you think that's ok and fair then you clearly do think we are less "deserving" - even to keep the same proportion of our own earned income that you are allowed to keep! - and I am not sure what else to say to you.