Childcare vouchers definitely going...

[morningpaper]

apparently

adding £2,400 to the childcare bill for top-tax earners

morningpaper I didn't say that. I said that taking away the tax benefit of vouchers reduces the marginal financial benefit of working. If the numbers are such that the person is hardly better off working at all, then they are very likely to choose not to work. It's not rocket science.

Letting them have that extra few pounds a month via their vouchers, makes working a viable alternative for many

But that's what I'm saying. I don't imagine hardly anyone will give up work because the childcare vouchers will be removed, as morningpaper said. So taking away the benefit of the vouchers and reinvesting that money into people who are really struggling seems fair.

About my sis - I'll look into that. Thanks!

yes starlightmackenzie, totally agree - my childminder increased her fees the minute childcare vouchers were introduced. net effect to me = zero.

when governments subsidise ANYTHING the result is that the subsidised suppliers put their prices up! benefit to the public - NONE

I am sooo late now but it is an interesting discussion!

So what category of struggling parent is going to benefit from 2.5 hours childcare a day for 2 year olds?

Good point there: For most people with 2 children at nursery, you will break even on £24,000 per year (i.e. you taking home around £70 a day after tax, and nursery costs are around £35 per day per child)

Gah! The whole system needs a majot overhaul but no doubt there's no money for that either

Impossible to be fair to everyone. It sucks!

major

yes morningpaper, plus the extra petrol costs, clothes, lunches cost etc of going to work

Monday - we were saying earlier that it doesn't make sense to do that but perhaps would be better to allow parents of 3 yrs olds to bundle their 2.5 hrs sessions up and give a bit more so you could get say two whole days free childcare. Proper days that would enable you to do a full days work beween dropping them off and picking them up.

I'm not sure anyone would argue with that!

I would like that fleecy - i think what may be a barrier is that when you try to offset your free 12 hours from private nursery costs, the hourly rates are so disparate that you don't actually get a free 12 hourse ifkwim (i.e. the hourly rate paid by the government for the 12 hours can be very different from the hourly rate charged by the private nursery). So I don't think my nursery would let me pay for a 3 day place even if the government said I could bundle the free hours into 2 days

Sorry if that makes no sense - I know what I mean!

I wonder how many women will give up work altogether because of this. After childcare (two kids with CM) I only make £350 a month (working two days) but it will be only £275 once the voucher scheme is scrapped.

And I earn £30k pro-rata which is above national average. And my childcare fees are only £60 a day which is quite low for two kids. The effects will be worse for people with kids in nursery and/or on a lower wage.

I agree the scheme is inequitable currently because it is not available to all - tax relief should be available to all on the basis that childcare is a necessary cost of working, just like a company car.

Monday - I get what you're saying. Hmm, 'tis tricky isn't it. I'm glad I have a normal job where I don't have to make these decisions - and I really should go and do some of my work now

Yes, Starlight hopefully that is what will happen.

I was initially outraged about the vouchers going but not so much now. We are all going to have to pay more to get the country out of the fix its in.

I am a socialist and I want to pay more to help people less well off.

I just wonder whether cutting the vouchers will backfire, if lots of women on around £25k quit work altogether.

I actually doubt any nurseries or CMs will cut their fees actually.

I am sure my CM would argue she can't afford to cut her fees as it would make it not worth doing.

I don't see why anyone would cut their fees

Everyone is buggered and childcare environments are in the same boat as everyone else

starlight £62 per day is a way more than the average though. Isn't it closer to £35 a day? And on that level, there really isn't a lot of profit (I was friendly enough with the nursery manager to know that she was really struggling after insurance, heating, accountants, food and a cook, etc). So those levels wouldn't go down and as morningpaper pointed out "For most people with 2 children at nursery, you will break even on £24,000 per year (i.e. you taking home around £70 a day after tax, and nursery costs are around £35 per day per child)". These are the people, often second salaries, who are being disproportionately hurt by the loss of childcare vouchers and I think it is socialist to care about them. And it's good economics...

(and it doesn't affect me personally, I'm a SAHM mum now because working for a hundred pounds a month was not worthwhile for the amount of stress it added to our family.)

why on earth do they want to get 2 year olds into nurseries.
seems far too young to me.

Just to add my voice - I'll be livid if they scrap them!!

And I am one of those "well off" higher rate tax payers. Yes, we have such an extravagant lifestyle with both parents working and two children in nursery, a smallish mortage, paying for our pensions and saving something for our kids later in life.

It's so extravagant that we can't afford to eat out, we are lucky enough to go on holidays as our parents offer them too us. Charity shops are great for clothes - new ones just don't happen.

The vouchers changed things from being completly broke to actually have a bit of cash, not much but a bit.

And to rub it in, someone I know lives on benefits, lives in her ex partners house ( pays no rent) goes abroad twice a year at least and seems to have a house full of new things. Yes, please Mr Brown, give my voucher money to people like her!!

PS Sorry if I sound a bit bitter, I am a bit.

Like others, childcare is a neccesary evil for me to be able to work to support my family. I resent paying it out of taxed income as it is a neccesity - if I didn't have childcare I couldn't work. The vouchers make it a bit more bearable.

In terms of breakeven - my DH earns about £23k, pre vouchers, we worked out that we were paying about £150 amount to allow him to go to work, and that was before we paid petrol etc. Agreed he could have given up work, it would have made more financial sense, but he didn't want to look after the kids all day

carrie - I've no idea, and they haven't explained it at all. Another terribly ill-conceived badly thought through initiative from Gordon Brown

The only reason that Brown has offered 2 year old free places is for an easy soundbite when his party is doing appallingly in the polls.

Scrapping childcare vouchers makes me absolutely furious and means that working for me will become almost financially pointless.

I hope his advisors are reading this web conversation and re-think their ideas. I also hope that the Tories follow suite - they currently have said nothing about wanting to continue the scheme...

Makes me livid too. Yes I'm a higher rate taxpayer and so is my partner. Yes we can probably afford childcare without the tax relief. But so what! We have paid a fortune in taxes over the last 20 years, keeping these MPs in their fat cat expenses and second homes, never claiming any benefits, now we are finally getting the chance to get of some our tax back. I'll be furious if it gets scrapped.

he is a very bad and very silly man as ALL of my mummy friends and anyone i know thinking of babies think this is RIDICULOUS!!!

at least he won't have to worry about the cost of childcare when he's out of a job and is a stay at home dad!

well done gordon we'll all be voting for someone else!