Child Benefit- is is now means tested?

FATBALLZ

Person_one wrote: »

What on Earth kind of lifestyle are people leading that 70K pa isn't enough to cover it?

Are they driving vintage bugattis to work? Leaving their children with Mary Poppins all day?

A salary of 35k can come out as less than £1800 a month net, so the childcare bill for 2 kids would swallow 2/3 of that already. With the costs of commuting to work and if a car is required you could find there's actually no financial gain in working in that situation.

Our household income is in the general ballpark of 70k and we can't afford a second child at the moment due to the cost of childcare as it would leave us at break even point every month, so we wouldn't have any spare money for emergencies.

I can also assure you my car is highly unfashionable

onlyroz

FATBALLZ wrote: »

Our household income is in the general ballpark of 70k and we can't afford a second child at the moment due to the cost of childcare as it would leave us at break even point every month, so we wouldn't have any spare money for emergencies.

We were in that position so we had to space our kids out so that they wouldn't both be in nursery at the same time. You'd have to be on a big big salary to be able to comfortably afford up to £2k a month in childcare, and the mortgage on a property big enough to accommodate you all (e.g. a typical mortgage on a 3-bed semi would be around £1000 a month).

Take home pay on a £70k salary is around £4k a month according to thesalarycalculator.co.uk. That comes down to £3.5k a month if you have a student loan, and would be even less if you made pension contributions.

So who would like to say that you're well off if you're spending £2k on childcare, £1k on a mortgage, and are left with £500 to cover food, fuel, insurance, utilities etc?

Anyone?

Gigglepig

I think it makes sense to look at how child benefit payments work in the context of other payments and support available.

Perhaps the benefits relating to having kids should be looked at more carefully - some people think that the current structure of these benefits encourage the least resourceful parents to have lots of kids, while many professional couples are struggling and put it off for years and years. The economy needs people in work. At the same time we want to make sure children do not live in poverty.

In some ways it may be more fair to for example pay maternity pay at a set percentage of the salary, say 50%, no matter what that salary was in the first place, rather than 90% up to 126 pw. That way young professional women (who will also have paid more taxes and pay market prices for housing etc) would not be penalised. In addition to this, it is possible to set max prices for daycare and after school clubs, or subsidise those places for parents who work.

In addition there could be a child benefit payment to the very poorest families, as well as means-tested social housing.

izzybusy23

Violetta wrote: »

http://www.moneysavingexpert.com/news/family/2010/10/higher-rate-tax-payers-to-lose-child-benefits
It's from April 2013
Child benefit will be removed from families where either parent earns enough to pay the higher 40% rate of income tax – currently around £44,000.

But two-earner households where neither parent's income is above this threshold will continue to receive the benefit – worth £20.30 a week for the first child and £13.40 for each additional one.

In some cases, this could result in families with an income of almost £88,000 receiving child benefit, while others on little more than half this sum lose out because one of the parents stays at home to look after the children.

Nuts!! Bonkers!! Crazy!!

Person_one

onlyroz wrote: »

We were in that position so we had to space our kids out so that they wouldn't both be in nursery at the same time. You'd have to be on a big big salary to be able to comfortably afford up to £2k a month in childcare, and the mortgage on a property big enough to accommodate you all (e.g. a typical mortgage on a 3-bed semi would be around £1000 a month).

Take home pay on a £70k salary is around £4k a month according to thesalarycalculator.co.uk. That comes down to £3.5k a month if you have a student loan, and would be even less if you made pension contributions.

So who would like to say that you're well off if you're spending £2k on childcare, £1k on a mortgage, and are left with £500 to cover food, fuel, insurance, utilities etc?

Anyone?

Ok, I'm seeing that this is more complicated than I first thought. Fair enough. I've never earned anything like 70k, I think my highest earning close friend is on about 28, so these are numbers I have no experience of! I didn't realise the take home from a 70 K salary was quite so low.

I'm now unsure, because I don't want to see a situation where women feel forced to leave their jobs and stay at home with the children so they can claim the child benefits.tax credits and avoid paying for childcare (and it would be women) however the truth is that there are many many families where both parents work managing on far far less than 3.5K net a month, even taking their benefits into account.

Is 1K per child per month an average figure for nursery/childcare or is it on the higher end?

tooldle

In two earner households, there will also be two lots of NI and tax being paid. I agree with the points made about childcare. Myself and husband could not afford to have two children in full time childcare at the same time (tax credit system was in its infancy then),the first would need to be out of childcare before we could consider a second. Consequently we only have one child, who is now secondary school age.

onlyroz

Person_one wrote: »

Is 1K per child per month an average figure for nursery/childcare or is it on the higher end?

It's possibly at the higher end, but that's what I pay. After taking childcare vouchers into account for myself and my husband, it works out at around £900 per month. Once my daughter turns 3 the fees will drop further because the nursery has a lower rate for the over 3s (because the child/staff ratio changes at that age) and because of the partial government subsidy (not sure exactly how much this is, but I think it's somewhere around £180 a month).

At the moment, our child benefit (£134 a month) just about pays for the childminder that collects my son from school 3 days a week. Yes, I *could* get on OK without it, but we would definitely notice the hit.

tooldle

My child is no longer in nursery, that said I don't think a charge of £900 per month is that unusual. One of our local nurseries is currently advertising saturdays at £6 per hour, which would make a full day £60. I assume that weekdays would be a bit cheaper. Even at £40 a day, you would be looking at £866 per month for one child. Drop off and picks up are normally charged as extras.

Person_one

tooldle wrote: »

My child is no longer in nursery, that said I don't think a charge of £900 per month is that unusual. One of our local nurseries is currently advertising saturdays at £6 per hour, which would make a full day £60. I assume that weekdays would be a bit cheaper. Even at £40 a day, you would be looking at £866 per month for one child. Drop off and picks up are normally charged as extras.

10 hours is a normal day? :eek:

tooldle

Yes, 10 hours for a full day, 5 hours for a half day. It doesn't of course mean that the child has to be there for a full ten hours. Although that said if only one parent is able to drop off and pick up, combined with a commute, I can see how you could get close to 10 hours. Other nurseries may be different, but that is how ours operated. Not like childminders who tend to charge an hourly rate, but unlike childminders our nursery only closed for Xmas day and Boxing day (attached to a hospital), fully open for the rest of the year.