Child Care

[Xaccers]

Back in the (not so good) old days men worked outside the house and women worked inside the house (aha you won't catch me saying men worked and women didn't!)
Households had a single income, and the thought of women not being housewives was shocking.
Then after a couple of wars where women started doing jobs which men did, couples realised that if they both worked, then they'd have more money, could afford a bigger house, more holidays etc, and still be able to rely on a single income while they had kids.
As more and more couples did this, house prices went up, the cost of living went up, unfortunately this meant that it became harder and harder to survive on a single income, so couples started putting off having kids, from their early 20s to mid 30s.
The population growth slowed, causing a social security timebomb for future OAPs.
Currently it is not easy to live a relativly comfortable life with just one income (if you're just starting out) so more and more women are having to go back to work earlier than their mothers did in order to make ends meet.
Now if you look at the cost of childcare, and the median earnings of women who need to use childcare in order to work, it can be as much as 50% of their salary.
Now, a mother at home looking after the kids isn't out working, isn't paying as much tax and NI, but a mother who is working and has kids in childcare (even with goverment vouchers) is paying tax and NI, and what's more, the childminder is now paying more tax and NI.
It may be a net tax loss (the voucher costing more than the tax paid by all parties) but it looks good on the employment figures and stimulates part of the economy slightly.

Sure you can argue that couples should wait until they can afford to have kids, and part of me agrees with that, but I also know that incog is right in that unless we start having more babies (in general, not just with incog) we're storing up problems for our old age.

The irony is, if women had stayed working in the home, then we probably wouldn't be in this mess

[SMHarman]

Originally Posted by Incognitas

When I was paying for childcare when my children were smaller I was paying out £50 a week.I could afford that but a low paid single parent couldn't.I've no idea what the present rate is now..

Age 0-2 £228 week / £975 month
Age 2-3 £220 / £953
Age 3-5 £210 / £910
As a personal example - South East England Prices.

Thats out of your after tax income.

One of the biggest problems IMHO is the inequity of the current process, my new eer offers flex benefits that mean I can salary sacrifice for childcare vouchers, the first 217 a month of these is tax and NI free. I've taken this as we have a childcare bill, this equates to a £1000 pay rise for our household over my previous job simply because of a tax break that not all eers offer.

Now if Mrs H also worked for an eer that did this (it is expensive for smaller cos to operate) then that would be another 217 of the bill tax free.

So running the numbers
It cost us £953 a month of after tax salary before.

Now it costs us 736 a month of after tax and 217 tax free

If both of us were with ees that paid child care vouchers it would be

£519 of post tax and 434 of tax free.

There is a great ineqity here between ees that work for companies offering vouchers and companies that dont in terms of how much it costs for childcare.

This governments wonderfully complex way of distributing this benefit means that it does not reach all that could use it. Thats the problem I have with it.

There is an off topic on this thread of SAHM vs Working Mum. After the first year-18 months IMHO they are better in day care as they can provide a better structure, friends etc than a SAHM can.