Childcare tax breaks for working parents.

[youarewinning]

Please someone explain this to me? There seems to be a £2000 tax break for families where there are 2 working parents.

So does this excude single working families as it excuses families with a SAHP.

X posted with Twelve who explained better than me :)

Yes, but Ofsted inspect for education purpose and the free pre school education does not work to set hours, it doesn't start or finish at a certain time.
Working parents are having not only childcare but early years pre school education subsidised for much longer than children of sahps and this is wrong.
if it is not possible to draw a distinct line between childcare and education then surely it is fair for it all to be subsidised for those who choose to use it. Working parents choose to use it too, there are other alternatives.

I think it is bad that people are having to wait a year for this. If it's such a good idea then why not now. Things could easily change next year and it won't be possible after all. It doesn't seem quite right that the richer you are the more you will benefit. I thought it was up to £150,000 joint income. Which is a huge amount of money. Far far too high.

I will admit to being completely baffled by the idea that SAHP should have subsidised childcare in an economic climate where we have families living in B&Bs and eating from food banks, but I think that's an ideological difference.

However, you're not correct that all Ofsted-registered childcare is educational. To be an Ofsted registered nanny for example you need First Aid, insurance, and a 'Common Skills' course, which I believe is usually just a one day course covering development alongside a whole range of other topics. Once registered, there is no requirement to 'educate'. I don't know what the situation is for childminders.

bumblezz many sahps do not actively choose to become sahps. Being a sahp is simply the least worst option. Yes, of course a sahp could choose to get a job instead-but most jobs are simply not compatible, for a variety of reasons-with looking after your own children full-time.

I think it is awful to determine subsidised childcare in terms of contributing to the economy through working and paying tax, however being that this is the usual argument.
A working single parent only contributes tax for one person the same as 2 parents with a sahp so that argument doesn't stand really.

As for why a sahp might need childcare, is this really such an alien concept. let me see now, how about a break for the parent when the child has an ill sibling, or the parent is ill, or for socialisation, to job seek, for appointments, I'm sure others could add their own.

How about even just given the same opportunity? Many wouldn't choose it, but it would be good to know it was available if they did need it.

Bumblebzz, Yes I agree if sahps wanted an income they could get a job. Equally working parents could stop work and stay at home to look after their children if they don't like paying childcare costs. It would just seem more reasonable to me if the government gave each child under five the financial benefit and let each parent choose the childcare option that best suits that child.

fedup

I agree that being a SAHP is often the least worst option, due to the extortionate cost of childcare often not being covered by the addiitonal salary - and I see the govt assitance towards childcare as a step in the right direction to addressing this, so that people don't have to be a SAHP unless they truly want to be. However, it still means childcare is implicitly associated with working.

Those reasons you gave for needing childcare as a SAHP are all valid (and not particular to SAHPs - though I don't organise childcare so I can attend to appointments or have a break, just so I can earn a living. It's too darn expensive to spend on unless I am bringing in more in income than the cost of the care itself.) but due to their adhoc nature, and the lack of economic benefit, I don't think they provide sufficient argument to justify taxpayers funding the cover.

However this is just my opinion (and seemingly the government's, though that is always subject to change.

Bumblebzz I also don't necessarily agree that sahps need childcare, but they do need help in caring for their children as all parents do. Childcare fees cover costs not just for supervision of children but also for food, heating, equipment and resources at the place of childcare. All of which children who stay at home need too!

LaLay

Childcare fees certainly don't cover those costs for me and many others. I pay my nanny £14.50 per hour and that just covers her salary/tax/NI/my employers NI. Food/heating/resources etc including feeding the nanny) has to be paid for by me and I can't use any childcare voucher scheme towards these costs.
To be honest childcare vouchers - and the new scheme - cover such a drop in the ocean of annual chidlcare costs I'm not sure your envy (if that's what it is) is well placed.

Viviennemary you don't benefit more the richer you are - you benefit more the more you pay out (though of course someone who gets a £4,000 tax break on a £20,000 nursery/nanny bill is still £8,000 worse off than someone who gets £2,000 tax break on a £10,000 bill). Under the original salary sacrifice system rich people got 40% tax breaks while poor ones got 20% or nothing - now that really was questionable. Most of the people on this thread who are planning to stick with vouchers are doing so because they are higher rate tax payers who signed up to the original version of the scheme.

Yes £150,000 per parent is a lot, but remember that the old system had no upper limit at all - a Premier league footballer's SAH WAG could claim.

This is a full-blown attack on SAHMs now, or at least on the acceptability and validity of their choice. Very clear message that g'ovt will not support parental care.

If sahps are not entitled to subsidised childcare, because they don't need it surely it should be awarded on a need basis.
Who actually needs the childcare and who just wants their choice subsidised.

Friend one : She works local Morrisons has part subsidised childcare for all her hours, doesn't earn enough to pay tax, her dh works full time.
When childcare costs are met the whole wage is wiped out and it actually costs her to work during the school holidays.

Friend two: She is a sahm her dh works full time.
No childcare subsidy entitlement.

Both lifestyle choices, one has subsidised childcare paid for by the tax payer.

150k is indeed a lot, but how many people really earn that much? Also anyone I know on a high salary like that works such crazy hours - and unpredictable hours - that their childcare costs soar to cover the extended and unsociable hours.

When I had a full-time nanny I had to earn 50k before tax just to cover her gross salary (which was roughly 35k a year). And those were for regular hours, 50-55 hours week. That wouldn't cut it in a "high flying" position where core hours don't exist.
I'm not looking for sympathy for those high earners, but things aren't all always as rosy as they seem. Also the net take home pay when you earn 150k does not scale up by the time you've factored in 40/45% tax bands and NI, reduced tax free allowances etc.

I'm not struggling to see why a SAHP might want subsidised childcare - a break, ill siblings, appointments, all the rest of it - I'm struggling to see how this country can afford to offer subsidised childcare that doesnt' have an economic basis.

Like a lot of working parents here if I have an ill child, or an appointment, or want 'a break' then I have to fit it in around childcare that I pay for. Being self-employed I get absolutely no financial help with this, but I do suffer loss of earnings AND have to pay out for child care for every day a child is ill, or I have an appointment, or anything similar.

It's simple economics: I am working, so I am paying NI and tax. I pay for childcare, so I am indirectly and directly paying NI and tax for childcare employees. It costs this family thousands and thousands each year but I am doing it to keep my business alive during the pre-school years. If childcare becomes more affordable all it will do is enable me to take on MORE work, and so contribute MORE to the economy.

Twelve

SAHMS wanting to use childcare are likely to want very PT, maybe to give individual attention to a high-needs child once or twice a week, maybe to study (improve their skills),attend CPD (update their skills, keep professional registrations current) or volunteer (socially useful, keeps a toe in the world of work).

SAHMs returning to the job market might want to settle DCs into childcare in advance and/or need childcare while they job-hunt and attend interviews.

Are these not all socially/economically desirable activities? Would a 20% tax break on PT hours really be unaffordable. The family are paying 80% after all.

You only need to earn £50 a week to get this,millions of second earners won't be paying a penny in tax but will get it.

I fail to see how as a country we can't help parents have a period as a Sahp when they really need it but we can fund childcare for several children of parents in non taxing paying jobs when many would rather be doing the childcare themselves.

Oh that and free food/childcare for the uber rich.

Hi, thanks for all the replies - sorry I've not been here bit I've been out at work all day

I'll give the thread a proper read this evening when DS finally goes to sleep!

I'm also scarily proud that MNHQ responded on my thread - thanks KatieMN

morethan

With the friend 1/2 example, are you proposing that both should be treated the same in terms of chidlcare subsidy?
Morrisons will stll be paying Employers NI on behalf of friend 1, even though she might be below the tax threshold. By staying in the workplace she is future-proofing herself and will find it much easier to ramp up her work if/when she wants to, versus a SAHP. Given we will all be working well into our 70s, I personally think it's unrealistic to expect not to ever work again, unless you have a source of income to support that choice (an OH with longevity and loyalty, inheritance, etc).

I guess we will have to agree to differ on this topic as I would want to support her choice to work, by assisting with childcare costs. Whereas the SAHP doesn't need childcare support, in my opinion.

Anyway, it's a shame to derail this thread into a discussion on SAHPs, when this legislation needs to be teased out so that those who are actually affected (working parents) can assess the impact on them.

surely the uber rich use private schools so don't get free school meals anyway?

Actually I completely agree that in an ideal world this scheme should be open to parents studying or planning on returning to work. I can't see how it could be implemented - maybe a qualifying period or similar - but it would be great if it could.

But that's a very different conversation to saying that the government is punishing a lifestyle choice., or that SAHP should get subsidised childcare just because working parents do.

Just had a look at katieMN link and looks like I'll get child are costs until DS is 16yo if they count disabled as those receiving DLA.

50k is deemed as rich by the Tories,plenty of "rich" parents use state education.

And yes this gov thinks parental care is not to be encouraged.

Twelve

To your last point I agree in an ideal world this would be the case (so long as it wasn't subject to abuse).
And totally agree with your second comment, helping working parents shouldn't automatically be intrepreted as punishing SAHPs but for some reason every time legislation like this is announced, it meets with the same reaction. But you don't hear, people without children, for example, moaning that they won't benefit from childcare subsidies.