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??

duchesse

I read all the posts. I don't see your point?

Of course I'm not saying anybody shouldn't go back to work, there should be choice. However, if there is any subsidised childcare it should be fair and not used to support a lifestyle choice for one set of parents and not another.

Do you not think that a sahp seeking work should be entitled to subsidised childcare? A student who also is investing in their future career? Because these will not be entitled to support.

ROFL that working is a "lifestyle choice".

1. When you work, you pay tax, often more than any childcare subsidy you might receive so the government is still "making a profit" off you. So not the same as a SAHP paying no tax.

2. If you take a break from your career for the entire time you have children, you will re-enter the market at a much lower grade and thus be earning less and paying way less tax over your lifetime.

You do realise, morethanpotatoprints, that people in work are paying the taxes that run this country. Because it sure doesn't seem to be businesses who are paying. So even if I personally were making a loss from working, the government would still be making money from me. Grossly unfair, but it hardly means would be any kind of drain on society.

I also want to add to my point above: "c) those few pounds a month you do manage to take home make all the difference to whether you can actually pay the bills or not."

This highlights why cutting childcare subsidies is a really bad idea, because if one partner is only making a £100 profit, but that means the family can pay rent, and then childcare subsidies are cut by £200, that family will a) lose their home and b) one partner will have to give up work as they are now losing £100 a month instead by both parents working.

We have the highest childcare costs in Europe - other countries realised long ago that to keep your workforce able to work and contributing to the economy, you need to give them affordable childcare.

I pay more in taxes than anything I get back in childcare vouchers or cb. We are hardly rich. I'm a lower tax payer but receiving no working tax credit. I'm sure I'm in the squeezed middle.

We definitely pay more in taxes than we take out in benefits. But we have free healthcare, clean water, roads that work, a pretty decent education system, etc etc... and there are not many people dying of hunger in the streets (although I think we could see that more and more :(). I can live with paying more in tax than we get back in benefits- that's the way it should be!

The town I live has the largest numbers of homeless in Kent. People literally freeze to death in the winter. My job in London would bring in around 35k-40k but here the max I can get is £16/17k. Yes house prices are a lot lower, but we pay very similar fees for everything else - £200pm on council tax (with 15% discount for single occupancy). To get to London before 10am (rtn travel card) is £65. As a single parent, commuting 1.5hrs each way and paying that amount in travel alone is impossible. My nursery, as I said before, is £77 per day and is only open until 8pm. I would need to finish work at 6pm on the dot to make sure I was back to collect her, and let's face it, there is a lot of pressure to stay longer and usually a few days a year where it is really needed. I just can't see how I can make it work without perhaps retraining, which again I now can't afford to do due to nursery costs.

Can I ask what you're going to do about school?

Things get far more difficult when school finishes at 3:15.

My point is that I can't afford to work. So I am a stay at home mum. I can just afford to put DD into nursery for 3 hours twice a week, so I get a small break and can do housework but other than that she is with me 24/7. When she goes to school I may actually be able to take a part time job!

I understand what people are saying about paying more tax than the subsidy in childcare they receive. My point was fairness and the ability of a sahp to be given subsidy when seeking work. Students to be given subsidy because they too will be tax payers. I also think the reduction in subsidy is fair when everything else is being cut and there are so many people without basic needs being met. Its only my opinion but expecting subsidy to fund a lifestyle choice that a person has made with one of the reasons affording to move to a better catchment area for schools, doesn't seem right to me.

Newpencilcase.

You don't have to be employed for your dc to be doctors, nurses teachers etc. I don't see how that is relevant. I'm not using childcare so costing nothing, my ds 21 is still employed

May be removal of employers NI on nannies too worth £2k a year which will help working parents too. on a £25k nanny gross wage the parent has to pay in addition 13% employer NI £3250 so this will help if it applies to all small employers.

I read that the £2000 employer NI cut can only be used by businesses, charities and community employers eg sports clubs, not employers of domestic staff.

I suspect the rules have not been fully written yet. The long HMRC doc I read said businesses and charities and apparently possibly some new information today suggests all employers. It is certainly worth looing at as employer NI for hard working parents who may be spending 50% of husband'#s and 50%$ of wife's salary on a full time nanny for 3 children under 5 who costs them £25k out of their already taxed salaries as it is also have to pay 13% employer NI.

I find the responses on here (and on the Daily Wail!) to be utterly bizarre. This is not a benefit (as in hand out), it is a tax break on what is essentially an expense that is incurred through work and given against money that has already been paid in. Some other expenses incurred through the course of work are also tax deductable. My membership of my professional body, the British Psychological Society is. Does this discriminate against non-psychologists? My partners purchase of equipment for his business is too. Does the tax break on his design software discriminate against non-designers?

The previous voucher scheme was fit for purpose for those lucky individuals who could access it. It wasn't fit for purpose for all families though as the majority, as I understand it, couldn't access it anyway. The fact the new scheme is available for those on a high income is a red herring here.

more than - this is no more 'a subsidy' than any tax break on expense incurred in the course of work is! It's not about giving extra money, it's about taking a bit less away.

Still laughing at the idea that actually having a job (you know, that normal thing that people do to earn money and keep the economy going) is a lifestyle choice.

morethanpotatoprints - I'm a full-time student so I need full-time childcare. I don't get (nor will I get) any kind of subsidy because I don't pay tax. I think this is perfectly fair - I still get to benefit from the NHS, roads etc etc.

I don't entirely understand why you think someone looking for work should have their childcare covered.

This is a tax break, you know, paying a bit less tax on an expense incurred because of your job.

Why are you struggling so much with the concept?

If SAHP were paid for childcare (and they already get the 15 free nursery hours), it would be a nett loss to the government.

If students were paid, it would also be a loss to the government.

When working people get this tax break, the government still makes money. Often more than that person actually working.

If I had a job and had to quit because I couldn't afford childcare, the government would get less money off me, so that means less money to then pass on to the poor/disabled/vulnerable etc etc.

morethan for what is worth, we have budgeted childcare cost in our savings. We should be able to keeping DD's place at nursery for 6 months while seeking work. Even under the current system, you lose your childcare vouchers if you lose your job. It's done via salary sacrifice.

Yes you lose your vouchers if you lose your job. However under the new system, if you are both working you will BOTH lose your vouchers if ONE of you loses your job.

So not only do you lose one wage, you also lose tax relief on the other income.

Utter madness.

" Even under the current system, you lose your childcare vouchers if you lose your job. It's done via salary sacrifice. "

Yes, one parent loses their childcare vouchers because they have no salary to sacrifice. Under the old system the working parent could still claim childcare vouchers while the non working parent looked for work. The benefit to the economy is that the non working parent gets back into work faster.

Under the new system the family loses ALL help. I think if someone had to look after children and look for a full time job they would slip into being a long term SAHP. Most families can only afford nursery for a very short time while a parent is unemployed even with vouchers.

I think the number of SAHM parents will increase with this new policy. Whether this a good or a bad thing depends on your outlook on life.

ReallyTired - whether it's good or bad depends only and entirely on the person forced out of work. For some it may be a blessing, for me it would be a living nightmare.

The Tories want women back at home so that all the jobs can go back to the men, who are of course the only people who really need or deserve jobs.

Eh? Don't understand that point Annie. If the tax break is only available to families where both parents work (or for single parents, the single parent works), how does that encourage women to be SAHM?

Because lower earners (usually women) will be forced out of work when their childcare costs go up. Simple as that. So many families are already on that very fine line between a tiny profit and a loss in terms of the lower earner's wage vs childcare costs. If they can't afford to tip from the profit to the loss side, then the lower earner will have to stay home.

The thing that angers me most about the new plan is that it is initially restricted to under 5s. The emphasis is always on nursery fees but this is not the only childcare cost.

I went part time (3 days a week) after DS1 then went freelance after DS2, fitting in work as and when I could and spending as much time at home as possible. This often meant working evenings etc but that was my choice as I wanted to be with them.

He goes to school in September and I am planning to go back to work (or at least work more) now that there are no children at home during the day.

Under existing system I would be able to get childcare vouchers until they're 15. Now, in 2015 I will lose all of my childcare vouchers because the cutoff will suddenly be 5.

I realise that expenses will be lower but after school & holiday clubs still add up to a hefty bill. This will encourage women into school hour, term time only jobs which, at the moment (although wrongly) tend to be lower skilled and lower paid.

I agree, it suits the government to encourage women to stay at home to make the employment figures look better whilst all the time waving their 'strivers' banner.

This policy doesn't help strivers at all.

newpencilcase, I thought the existing voucher scheme would continue for those already in it?

Annie, won't most families be better off with this scheme - accept that families with one child won't be but lone parents, and two-parent families with two or more children will be? Except where both parents are HR taxpayers in which case income > £90k combined in any case so hardly low earners.