Statutory neonatal care and pay (SNCP) is scheduled to be introduced in April 2025. Here we explain everything you need to know about this new entitlement, which is the result of the Neonatal Care (Leave and Pay) Act 2023.
What is neonatal care?
Neonatal care is when a child receives any of the following types of care:
- Medical care in a hospital
- Palliative or end-of-life care
- Outreach care, that meets the following conditions:
- The care is provided under the direction of a consultant doctor AND
- The care includes ongoing monitoring by, and visits to, the child from healthcare professionals arranged by the hospital
What is the new entitlement to neonatal care leave and pay?
This entitlement will be for parents who have a child who requires neonatal care in the first 28 days following its birth and will need it for a maximum of 12 weeks. This is in addition to any other statutory parental leave and pay entitlements.
Statutory Neonatal Care Leave (SNCL)
SNCL will be a day-one employment right for parents who meet the qualification requirements, and who are recognised as a parent with caring responsibilities for the child.
The leave will be one week for every one week the child spends in neonatal care, up to a maximum of 12 weeks. It’s applied during Tier 1 (in care) and Tier 2 (after leaving care).
Child is in neonatal care (Tier 1)
Tier 1 leave applies to parents who take leave while their child is in neonatal care or in the first week following their discharge.
It’s designed to allow parents to leave work at short notice, so they can be with their child in neonatal care. It can be taken flexibly in an unlimited number of whole week blocks.
If a week of SNCL overlaps with prior pre-booked parental leave such as Shared Parental Leave (ShPL), the parent can pause their SNCL and Statutory Neonatal Care Pay (SNCP) to accommodate the other pre-booked leave. They can then tag the remaining days of SNCL and SNCP at the end of the ShPL.
This flexibility is to ensure that the parent can take their leave in Tier 1 when they need it.
After neonatal care (Tier 2)
Tier 2 leave is any remaining leave taken (from the entitlement) after the end of Tier 1 leave. It can be taken until the end of the 68-week period following the child’s actual birth.
Any Tier 2 leave should be taken in a single continuous block, as this leave is taken when the child is out of neonatal care and can be planned.
The statutory leave entitlement is a maximum of 12 weeks over both tiers.
Who qualifies?
The qualification for neonatal pay is the same as the criteria for the leave, plus a 28-week continuity of service test and minimum earnings test in relation to the £123 Lower Earnings Limit (subject to change each April).
It’s available when a child enters neonatal care within 28 days following birth and completes a stay of seven or more continuous days.
Both parents will be able to take up to an additional 12 weeks of paid leave (depending on accrued entitlement), on top of any other leave entitlements such as maternity and paternity leave.
Neonatal Care Leave (NCL) must be taken within 68 weeks of the baby’s birth. An additional statutory absence type will be required for HR and payroll absence reporting and pay.
NCL will be available to employees from their first day in a new job. It will apply to parents of babies who are admitted into hospital up to the age of 28 days, and who’ve had a continuous stay in hospital of seven full days or more.
As with other types of parental leave, to qualify for Statutory Neonatal Care Pay (SNCP), an employee will need to have been employed for a minimum of 26 weeks prior to the leave being requested. They must also have average earnings that are above the Lower Earnings Limit (LEL), mirroring the entitlement to Statutory Maternity Pay (SMP).
How will SNCL be paid?
Payments will be made by employers directly to the employees via the payroll process, in the same way as for other statutory parental leaves, and claimed back through the usual FPS and EPS process.
Special circumstances
The child dies
If a child dies following an eligible stay in neonatal care, the parent would be allowed to take any accrued SNCL and SNCP within 68 weeks of the child’s birth, similarly to parents whose child survives.
Adoption is disrupted
Where an adoption is disrupted following the prospective adoptive parents caring for a child in neonatal care, parents will be allowed to take any accrued SNCL and SNCP within 68 weeks of the child’s birth.
Multiple births or multiple admissions
The maximum entitlement (12 weeks) does not increase if there are multiple births. Entitlement will only be triggered if one or more of the babies each spend seven or more continuous days in neonatal care.
If there is an overlap in admission between two or more of the babies, any overlap of seven or more days will trigger an entitlement that will be attributed to one of the children – not to all of them separately.
Real Time Information (RTI) changes
To support SNCP there will be one new data item in the Full Payment Submission (FPS) to report the SNCP paid. There will be two new data items (reclaim and compensation values) on the Employer Payment Summary (EPS), similar to those for other statutory payments.
Outstanding queries
There are still a number of outstanding questions that will need to be answered before the introduction of SNCP and SNCL, including the clarification of specific special circumstances around areas such as how this will apply to early births (born prior to the MatB1 form date).
Summary of what you need to know about the Neonatal Care (Leave and Pay) Act 2023
- Scheduled to come into force from April 2025
- Neonatal Care Leave (NCL) will be a day-one employment right
- Applies to parents of babies aged 28 days or less if the baby is in hospital for a continuous period of seven days or more
- Provides a maximum of an additional 12 weeks leave, which must be taken in one block
- Neonatal Care Pay (NCP), as with other forms of parental leave, will be available subject to 26 weeks’ service and earnings above the LEL – mirroring entitlement to maternity pay
- Applies to each parent in addition to other parental leave
- Must be taken separately from other statutory leave. It’s expected that this will usually be added on to the end of other parental leave, but final guidance has still not been published
- Must be taken within 68 weeks of birth, crossing payroll years for record-keeping purposes
- Some companies may want to consider occupational leave/pay in line with other types of statutory leave
New acronyms
- SNCP – Statutory Neonatal Care and Pay
- NCP – Neonatal Care Pay
- NCL – Neonatal Care Leave
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About the author
Claire Warner FCIPP is Ciphr’s regulatory analyst, and one of our team of payroll experts. She says: “Having ‘fallen’ into payroll like so many others, I’ve worked in the profession for over 40 years in multiple roles. This includes running payrolls in various industry sectors and working with software houses to develop software and implement systems for client. I’ve also designed and delivered professional training and qualifications, and sessions, conferences and webinars on various payroll-related subjects. I now use this knowledge and love of payroll and the legislation that impacts it to help guide, inform and support others within the profession.”