Worth going back to work?

P

Porter

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Hi there
Is it worth my girlfriend going back to work after we have a second child.
I earn about 70k gross and her about 60k gross.
The creche fees with be about 1800 per month for 2 years or so. She wants to take a career break for those two years but we can't figure out how much is in the difference money wise because of tax credits etc... we will be married at Christmas if that helps tax credits?
 
Hi,

I highly recommend you play around with your various scenarios using the Deloitte tax calculator http://services.deloitte.ie/tc/

Next year, a gross salary of 70k would be net per annum (assuming no pension contributions):
Single: 46,798
Married 1 income: 51,448

It's worth noting that you don't get the full tax credits when married, and tax bands are only adjusted for a portion.

If there's an option to work part time / seasonally, and you can find accommodating childcare, your soon to be wife could earn almost 8k per year tax free, or about 24,809 at the lower tax rate of 20% (she'd lose carers allowance, but utilise her PAYE credit).

There are of course lots of non financial things to consider in your decision, either way. We've a single income household with 2 young children, and although it's been a financial strain at times we wouldn't change it for the world.
 
I am sure this is discussed in a lot of houses every month when childcare is being paid, for us with four its just not worth it and its great luxury to have someone at home specially on a day like today when schools are closed, of course its tight with one income.
 
Yeah it's really a case of she wants to be around to mind the kids when they are babies, but wants to go back to her career when it comes to school time i.e. those costs aren't there every month. With pension contributions etc it seems we would only be taking home an extra 400 quid a month if she worked. Have to ask is it worth it while they are in creche when she could be minding them which she'd enjoy - what's 400 quid really - we can probably make it work.
 
From looking at this myself, assuming 10% pension contributions each, 70k single should be €3,550 mthly. 60k single should be €3,170 monthly. 70k as married one income family allowing for transfer of credits is €3,837. So the 60k salary 3,170 - 300 credits = €2,870. Deduct Creche €1,800 = €1,070. From that, deduct cost of going to work (travel / work clothes etc), and that's the real difference in staying at home vs working with 2 children. Real question then - is it practical for your partner to easily get back to work in 2 years time in similar role and salary, can an actual career break be taken, or would it mean starting again looking for a new job?
 
Like many who could, we went single-income when our second child was born. Of course there is a financial hit but as mentioned this can be lessened by the tax situation (increased SRCOP for married couples), Home Carer's Tax credit (€1200/year), saved childcare costs, other work related savings. It can deliver a huge quality-of-life bonus and (not looking to start a row) it's a better set-up for young children (at least up to 30 months). I doubt you'll find many people who have gone single-income who regret the move.
 
No she is a doctor so can just take a few years off and head back when she likes (she reckons she can anyway! I haven't checked). their pay is set on a scale by the HSE do she just goes back at same point of scale.
I mean that's the cost of our mortgage payment though 1070 so it's not exactly 'nothing'. something to ponder on though. thanks all
 
Well that is fantastic that her job is secure, makes a big difference to the decision, now it's just a short term financial hit decision. If it doesn't work out or she doesn't enjoy being at home as much as she thought, she can always return to work sooner. Best of luck.
 
I know a doctor in this exact situation and took a break. What she did is register with one of the out of hours services (d doc) and she gets paid a small retainer plus she is on call a couple of nights a month. Sometimes never called in. Might be an option.
 
Yes you can. This is our situation, I have the larger SRCOP roughly 44k and Mrs Castro stays at home and our jointly assessed tax credit is 1200E higher as we claim a (2018 ) budget Home carers allowance for minding the youngsters
 
fidelcastro said:
Yes you can. This is our situation, I have the larger SRCOP roughly 44k and Mrs Castro stays at home and our jointly assessed tax credit is 1200E higher as we claim a (2018 ) budget Home carers allowance for minding the youngsters
Click to expand...
There is an increased srcop of 24,800 for 2 income households(on top of 42,800 for married 1 income).
This is what you can not claim if you claim homecarers credit.
 
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