Child care schemes for higher earners?

[FTMaz]

Hi everyone,

Ive seen a similar thread to this which received a lot of hate so before I start please do not think I am looking for loop holes or to be dishonest I am looking for genuine schemes/ incentives.

my son is 1 year old and due to start nursery the end of April. I am returning to work part time earning 34k (total wage this has already been worked out pro rata). This is on an employed basis. My partner and I are not married but we live together. He is self employed and earns upwards of 200k per year including dividends. I have looked at the free nursery hours for working parents and based on my partners wage we are not eligible - fair enough. However does anyone know of any other schemes or incentives for child care that apply to those earning over £60k. I realise that we are in a privileged position, however my understanding is that these schemes are to allow people to work and it seems that for me, given the wage I will be earning it may not be financially sound for me to do so albeit I am returning to work for non financial reasons (I work with serious child protection cases and feel that currently I am not using my skills which are valuable).

thank you for replies in advance!

Why is it hilarious????

But you’d be happy for someone who probably works very hard to pay for childcare for someone who doesn’t work yet will no doubt have 5 kids, a new car, massive tv, smokes and has 2 dogs.
you people just don’t get how this country runs.

I thought the higher earner was recently changed to over £80k, up from 60k. Where is everyone getting the 99k threshold from…?

The system is broken. You can find yourself in a position where receiving a £25k pay rise or bonus actually leaves you worse off than not receiving it. By any measure that’s ridiculous.

Where childcare is concerned I strongly believe it should be universal. If that means taxing some people more to find that then that’s OK. The problem with the current system is that it incentivises some people not to work.

If one parent earns over 100k it means it probably isn’t worth the other lower earning parent working at all while their children are of nursery age unless they are on 40k+.

The tax system has too many points where it is not worth earning more. That’s just ridiculous. Everyone should be incentivised to earn their next pound.

We are in a similar position and we get 15 free hours now DC is 3 years old. The childcare ate a lot of my salary (as the lower earner on £55k, although the burden was shared) but I decided to return to work for my career/ sanity.

Loss of 30 funded hours for nursery and also loss of tax free childcare both occur at 100k. Child benefit is removed in full at 80k.

The double whammy is a marginal rate of income tax + NI of 62% at 100k kicks in as well. Quite easy to end up with an effective tax rate of over 100% at that point if you have nursery age children.

Why doesn't he leave the money in the company and you live on reduced dividends from him + your wage?

Thank you @Hamilton6382 yes, I got myself muddled. It’s a terrible set up. If it was both partners earning over the 100k before it kicks in, might make it a bit more palatable.

They already do.
At least when we lived in Sw london there was always a request for £££ at the start of every year. And repeated termly.

Ok it wasn't private school fees but I thought it very cheeky given it was a state school. Imagine if you didn't have £££ to hand over for this fund and that fund? What a way to make parents feel welcome and judged!

Why the snarky comments? You do realise that most people don’t even ‘support’ themselves, right? It’s the higher tax payers like the OP’s partner who prop the system. So you wouldn’t be paying the OP’s childcare bill, her DP pays enough into the system to cover that and then some.

Why is childcare so much cheaper in the rest of Europe then? My (high earning) colleague pays 250 euros per month in Germany.

How generous of you! I’ve kept my brain damaged DD off benefits for five years because we can support her on our combined £70k, rather than take money from the country’s pot so I can have a nicer car. Wtf would you spend the money you feel entitled to on? Gold plated prams? Gtfoh.

Taxes. Funded by people paying higher tax than UK.

The highest 45% rate doesn’t kick in until 277,000 euros in Germany. It’s £125K in the UK. Those earning £100 - £120k in the UK pay an effective tax rate of 60% (can be greater than 100% if they have kids and lose childcare support). Tell me which countries in Europe have such a high rate?! The UK is seriously bad value for high earners. If we don’t resolve this, our economy will stagnate more and more.

A lot of European countries pay higer taxes than UK.

You are missing the point. The ones we rely on to pay for everyone else, get a really bad deal in the UK. We have got it very, very wrong.

The map shows a highest rate of 45% in the UK but that isn’t the highest rate. It can be 100% if you earn over £100k and have nursery age kids.

This, also the child is luckily going to nursery at the start of the new tax year.

It may help you to think of it this way:
The rules for how to allocate the funding for supporting children (funded hours for early years education, tax-free childcare and child benefits) are set so as to ensure that no child that needs support is excluded, and that the administration of these benefits is simple and cheap to run. Obviously no system for where the cutoff shoukd be will ever be perfect. Lives are complex and each family situation is different. The cutoffs are placed so that a large number of families that don't really need support are going to get support, because any change in rules that removed it from them would accidentally also remove it from somewhere where it is really needed. It just so happens that you aren't one of the lucky ones who are getting help they don't really need bit that is ok because you don't really need it.

The "funded hours" (they aren't really free) aren't much use to you anyway given your affluence level. The amount that nurseries get from the government is a pittance well short of the actual costs of providing a good service. Childcare settings can try to pare every possible provision to the bone to minimise costs or come up with complex schemes for other charges to make ends meet while providing a service that costs way more than the government funding amount to run. Some settings are giving up trying to jump through government hoops and won't offer the funded hours at all so that they can honestly offer the seevice that parents need at a transparent price that reflects the real cost. In all honesty given your household income you will I assume be choosing the childcare solution that is best for your child regardless of cost, and such a provision is unlikely to be one where you would make much saving with the funded hours if you were eligible.

The incentive you have for returning to work as a higher earner is that you won't retain your higher earning power if you don't. The employment marketplace is fine with you taking maternity leave but if you stay out of the workplace until your youngest child starts school you will find yourself a lot less employable and very unlikely to be able to earn your current salary level. That along with the typically higher job satisfaction level that is typical for higher-earning jobs ought to be all the motivation you need.

The various kinds of support that you aren't eligible for are in existence to help overcome the barriers that many families face that would otherwise prevent them from thriving. Kindly meant but you simply do not face these barriers at all, so you are ok.

Actually, the UK has a higher tax rate for higher earners than Germany does.

Germany’s higher tax income comes from taxing ordinary Germans on the median wage more than the UK does. The UK median earner enjoys a low tax bill (28%) relative to most of Europe (44%).

Actually low and middle earners paying more. As decribed up thread those erning over £100k PAYE are paying the highest taxes in the world and stil can't acsess the free or subsidised child care.

I wish people would take their problems and off load them on another thread. The OP just asked a question. I don’t see reason to be nasty. Some benefits are universal.

the old childcare vouchers which was reduced tax didn't have an income limit but they replaced it rich tax free childcare which does. The vouchers scheme still runs but is closed to new entrants unfortunately

Some benefits are universal.

Which gets forgotten constantly. And the old child benefit was for some time as well

A lot of European countries pay higer taxes than UK.

Yes because lower & middle earners pay less tax here...