Government's "new" great childcare plan....

[duende]

I know there was a thread about it here a few weeks ago, but now a bit more detail is available:

parents to get 20% of childcare cost back

Now, I can't help but see it as a bit of a con. First of all, annoyed by how they sell it - our childcare bill is closer to 10-12k, so £1200 per year is NOT 20%.
Also, at the moment, both me and DP get the full amount available in childcare vouchers, which they will abolish. I get £243 per month, DP gets £220, and I am a higher tax payer.
Surely we will not be better off with this great new deal they have come up with?

Also, this will only be available to families where both parents work, current childcare voucher scheme is not restricted this way.

Am I missing something here, or are they about to screw people over again whilst dressing it as a positive move??

When DH worked for a small company they just paid the nursery £243 a month direct so I'm guessing they (and hundreds like them doing the same thing) don't count in the stats?

Not sure if it has been mentioned on the thread as I haven't got time to read it all (I am at work) but we have had some formal confirmation of the plans.

It will be implemented from Autumn 2015, however parents in existing childcare vouchers can remain in them for a further 5 years (so until Autumn 2020). It also said that it will initially be just for children under 5 but will be rolled out to under 12's at a later date

Without doing the maths, I am sure this is not a good thing but I have worked out that my 2 will both be at secondary school by Autumn 2020 so it is irrelevant for me but I really do feel the government would not be doing this if it wasn't cheaper than the vouchers.

Also, not keen on the 'pay now, claim back' aspect of it as a lot of families genuinely cannot afford to pay out £££'s even on the basis they can claim it back.

Ffs.

I work a measly .44 of a job thanks to cuts and have to spread this over three days as a condition of the job. I am already at the point where working is hardly worthwhile. I was considering retraining for this reason. I am a professional with an MSc and skills... but working doesn't pay and due to commuting I need to shell out for nearly 33 hours of childcare weekly though my actual hours worked vary from 18 to 24 (we can't manage to find more flexible childcare in our area).

I really do believe this government wants all women who are not self employed to stay home.

Nappy - you also save the NI. So if you are higher rate taxpayer then tax would be 40% and NI 2% so saving £102 p.m per parent. If at top rate then saving is 52%. Employer saves 13.8% NI as well so this will hit businesses as well as individuals.

On the new scheme the maximum saving is £100 per month per child.

Oh and if you joined the scheme after April 2011 as a higher rate taxpayer you can only get a reduced figure not the full £243, so that the amount of tax you save equates to basic rate.

We won't be able to use the new scheme as I work part-time at NMW and earn less than 10k a year, so bad for us.

This is all very confusing, and I don't quite understand how the Tories are screwing us all over yet (as I am sure they are) BUT, just sayin,many of you have asked how one half of a couple who is studying will cope r.e the changes, and I just wanted to say that, afaik, students have never been entitled to state funded childcare!
You may get a discretionary bursary from somewhere, but after I had ds I was a student, and I got nada towards childcare from the government. (pre-Condems).

I am not sure that sahp's should be entitled to childcare help either tbh. If you are out of work, but have a partner who works, then between the two of you, you should be able to manage without childcare.
All of these things should be treated as Household benefits:
CB should be available to Households earning under x amount,and so should childcare help.
I hate it when any government tries to get into our pants and reward marriage/penalise singleness/dictate who works and who doesn't.

Every time I think I can't be shocked any more, something like this comes, and literaly astounds me.
4 months of negotaitions, you say? And these people making these decisions must be on a different planet. Because the childcare cost sof £6k are just presposterous.
I only ever worked p/t since having both ds's but my nursery fees were more than that. I know becasue I had £243 of vouchers going out of my salary every month.

I shudder. Honestly.

I get £243 in vouchers from my public sector employer and will continue to do so as I move internally to a better post with pay in the 40% area (but less than the CB tapering band). DH is private sector and currently getting £120-ish in vouchers off higher rate taxed income but is about to be made redundant and will potentially go self-employed/freelance so would certainly look at the new scheme when it comes in.

So, I will be looking carefully when the detail emerges to see whether one parent can be claiming pre-2011 voucher rates (for DC1, nominally) and the other be getting up to £1200 in tax rebate for childcare (for DC2, who hasn't arrived yet but will be starting childcare in about march 14).

Hey, MNHQ, Why can't political stuff stay in chat/AIBU where there us traffic?

ifnotnow no you are right, there has never been state funded childcare for students.

However, if you have a partner in employment they can currently claim £243 of childcare vouchers tax free which you may use while you're studying.

Under new rules, because you are not BOTH in work, you get nothing.

You also lose help for school aged children, at least initially.

Most parents will be worse off than now.

It feels like a con which doesn't solve very much at all.

here

This policy means that we are subsidizing working parents who as a couple can earn together £150K or more a year. I'm happy for my taxes to help out low paid couples but not couples that choose to both work and earn over £60K. Many middle-income parents lost their child benefit recently and it now appears that this money is going to be redistributed to help some very well-off working couples. This seems totally unfair.

I also worry that the Government is discouraging a parent that choose to stay at home and look after their own children. Why aren't these parents helped in difficult times too?

Joanna, I agree. They should use £60k as the threshold. Anyone earning over that can afford to pay childcare without help.

Joanna, who is "we"? The only people subsidising anything are those who are working.

ceeveebee and Joanna45

It is a typical Tory Government, I keep saying this to anyone who will listen.
Their Key responsibilities are making the rich richer and the poor poorer.
A lot of low income families will be financially better off with a sahp as they won't be able to afford childcare. We are going back to what it was like 20+ years ago.

Nobody is subsidising anybody. The government is allowing those who pay for childcare to pay slightly less tax on it.
Those who don't pay for childcare are not paying any tax on it anyway (obviously).

p.s. I do not support the tories in any way, but i do support a move away from vouchers that only some employers support towards tax breaks for childcare.... it's not about 'subsidising' the cost of childcare at the provision end (staff in nurseries need to be paid a living wage and imo ratios should not increase) it's about the govt. taking a slightly smaller slice in the form of tax on childcare to make it more affordable.

Badguider - where do you think the money comes from to give the tax break? From taxpayers of course.
Fwiw DH and I work and pay an eyewatering amount of tax between us, and childcare costs of over £20k but I do not think people like us should get help with our childcare because we simply do not need it. It should be targeted to those who do need it and who could not afford to work without it.

Well if the average childcare bill really is £6k and vat is 20% then the average person is paying £1200 vat then it only takes 1/5th of a person more to be able to afford average chilcare to pay for each person's tax break.

But apparently lots of people pay more than £6k in childcare and will only get £1200 so they'll still be paying some tax so actually it's far less than an extra 1/5th of a person required for each person.

Not sure what VAT has to do with anything?

My maths might be wrong but the £1200 figure is only if you have a £6000 childcare bill for that child. So for two children and two parents claiming vouchers you have to have an annual childcare bill in excess of £9300 for the new system to be better than vouchers.

Most people I know do everything they can to minimise childcare. So parents work weekends, one works early while the other works late. Grandparents do a day a week etc. The vast majority will be spending less than £9300 annually on childcare so under this system they will lose out.

While I appreciate that not everyone can claim vouchers but why couldn't the system that replaces them at least be as good as vouchers?

ceevee ignore me. I didn't know childcare was vat excempt.
anomaly I know nothing about vouchers as I am f/t self employed and dh's employer chooses not to offer them. This is why I am glad of the changes on a personal level.

I think this might help a lot of WAHMs with micro-businesses and encourage people who sell on eBay etc to declare it as SE earnings. That would massage the figures for unemployment nicely too

badguider I can understand that for some families this is good news.

I am concerned that reading this thread a lot of people are expecting £1200 per child. It's a nice headline figure. But the reality is that to get that for one child you need to be paying £6k annually. To get £2400 you need to have two children costing you £12k and for three its £18k. The families I know just don't have those sorts of childcare costs. That's not to say their costs aren't significant.

If you have two preschoolers in FT care I can't see how it could cost less than £12k - round here it costs more than that for 1 child in FT care.

Anomaly - where on earth do you live that childcare costs were so low? We were paying £12k for full time nursery.