MSE News: Childcare voucher tax breaks may be axed

shell_542

I know when looking into it, with my hubby's income and a possible income for myself we could be earning around £28,000 a year and still qualify for some help towards child care costs through the child care element of working tax credits. Of course it doesn't cover it all but it was a big chunk.

LizzieS_2

TotallyBroke wrote: »

I don't know about a £16,000 cut off.

There isn't one as such. If you earn 16K or under you would keep your existing tax credits and get paid an extra 80% of childcare costs*. As your earnings creep over 16K you still keep the exisiting tax credits, but you don't effectively receive 80% of childcare costs as well.

*there is an upper limit for the amount that can be claimed - £300pw for 2 children.

shell_542

I believe the upper threshold for claiming the childcare element of working tax credits is a household income of approx £35,000. The amount you qualify for just reduces over £16,000. If a couple though, both parents have to be working over 16 hours each a week.

TotallyBroke

LizzieS wrote: »

There isn't one as such. If you earn 16K or under you would keep your existing tax credits and get paid an extra 80% of childcare costs*. As your earnings creep over 16K you still keep the exisiting tax credits, but you don't effectively receive 80% of childcare costs as well.

*there is an upper limit for the amount that can be claimed - £300pw for 2 children.

But I earned £24818 last year and my childcare element works out to be 80%.

shell_542 wrote: »

I believe the upper threshold for claiming the childcare element of working tax credits is a household income of approx £35,000. The amount you qualify for just reduces over £16,000. If a couple though, both parents have to be working over 16 hours each a week.

The upper limit of £35,000 would explain why at £24818 I still receive the childcare element.

LizzieS_2

TotallyBroke wrote: »

But I earned £24818 last year and my childcare element works out to be 80%.

I was having an idle moment without checking maths. What I should have said is 80% will be paid providing you are currently receiving more than the £545pa minimum.

my_gorgeous_ellie-belle

Thanks Mumof2girls - it's similar for us. As i my OH works and earns about 23K, i earn nowt as i'm studying part time we aren't entitled to help, no WTC as both parents have to work a min of 16hrs and OH's income means i can't get help from the college, so the tax free childcare vouchers help alot for topping up my daughters EYEE hours (our nursery is an absolute pain as you cannot just use the free hours, but have to have the kiddies in for the whole day and pay the extra hours around the free sessions - a big big pain, not sure how they get away with it really)

elisenevaeh

I think this is so bad! How do they expect people to ever work??

I am a 23 year old mother that has worked full time since the age of 17. I have a 2 year old daughter that is forever asking to go to a nursery but i just cant afford the costs, even with the current vouchers.....

i get no money at all from tax credits as i earn £18000 a year and my partner earns £9000 we are classed as well off!!! we have had a mortgage since we were 19 and once all the bills are paid we are left with no extra money to pay for a nursery, i have to work days and have my daughter at night and my partner has to work nights and have my daughter in the day.

My child loses out because i go to work, even if they provide free nursery places it will go to the same people that all benefits go to.

I think everyone should just sit at home and be spongers, that way we would all get free childcare and a free house to go with it!

I think the government need to get with the real world!!!
x

elisenevaeh

oh and we both work more than 16 hours a week but are not entitled to working tax creds due to not being over 25!! and the child tax creds come to £20 a month but i dont even bother claiming that now, as last year i ended up owing them money because i did alot of overtime at work so earnt more then i was allowed x

LizzieS_2

elisenevaeh wrote: »

oh and we both work more than 16 hours a week but are not entitled to working tax creds due to not being over 25!! and the child tax creds come to £20 a month but i dont even bother claiming that now, as last year i ended up owing them money because i did alot of overtime at work so earnt more then i was allowed x

You are entitled to WTC due to having a child. You will not receive a net payment of WTC only CTC due to your income, but it will be in the calculation of your entitlement.

The over 25 rule only applies to those who do not have children.

sly_dog_jonah

There was an article on this in yesterday's Sunday Times, with a unclear statement on the Tories' response to this at the end:

http://www.timesonline.co.uk/tol/money/tax/article6859786.ece

Has anyone seen any response from the Tories on this, in an article or otherwise?