In September’s Agent Update, HMRC confirmed that a new allowance called Statutory Neonatal Care Leave and Pay (SNCP) will be introduced from 6 April 2025. This follows the passing of the Neonatal Care (Leave and Pay) Act last year. While, to the best of our knowledge, we are still awaiting the relevant statutory instrument, software developers have already been working on building the new allowance into payroll processing packages.
Having a baby that is ill or needs extra care is a stressful time for parents, even without having to worry about their employment. Due to limitations on existing maternity and paternity leave, some parents in this situation may find themselves having to return to work before they are ready, or taking unpaid leave. SNCP therefore looks to reduce some of the burden on new parents who may otherwise have to return to work at a time when their baby is still receiving hospital care or only just returned home.
What will parents receive?
Following the introduction of the allowance, parents (including adoptive parents) of babies who need neonatal care will be entitled to take up to 12 weeks of leave, in addition to any existing rights to maternity or paternity leave. This is not a shared pot – each parent will be entitled to their own 12-week allowance.
The allowance will be given to parents of babies who are admitted into hospital care within 28 days following the day of birth, and who go on to have a continuous hospital stay of seven full days or more. This means the allowance can apply not just to pre-term babies, but any baby which is ill and needs significant hospital-based care.
The entitlement to take the leave is a ‘day one’ right, which employees are entitled to immediately on starting their employment. To qualify for paid leave, a parent must have been employed for a continuous period of at least 26 weeks and have earned on average at least the lower earnings limit – currently £123 a week. This is in line with entitlement to Statutory Maternity Pay.
Parents will be able to take the leave flexibly. Guidance provided to software providers suggests there will be two tiers of leave:
- Tier one leave – which can be taken in blocks of individual weeks, at short notice, around any pre-existing parental leave that has been booked during the time the child is in neonatal care. Tier one leave applies to periods when the baby is in neonatal care, or in the first week after they are discharged.
- Tier two leave – If the 12 weeks are not used up in tier one leave claims, any remaining leave can be taken in a single block at any time from the child leaving neonatal care until 68 weeks after their date of birth.
What is neonatal care?
According to the guidance noted above, neonatal care could include:
- Medical care in a hospital
- Palliative or end of life care
- Outreach care which is provided under the direction of a consultant doctor and includes ongoing monitoring.
What are the implications for employers?
SNCP will be administered by employers in a similar way to existing Statutory Parental Pay and Leave allowances. Employers will make a payment of the allowance, and then claim back some or all of the costs through usual payroll processes.
Parents will be required to notify employers of their claim to the allowance. Employers will need to appreciate that, understandably, notice periods for tier one leave will be much shorter than for tier two leave.
Further guidance on the full details of this allowance is expected nearer the time.
This article reflects the position at the date of publication shown above. If you are reading this at a later date you are advised to check that that position has not changed in the time since.
We regularly publish articles on a range of tax and wider topical issues which affect employers. If you wish to subscribe to our monthly Employer Focus e-newsletter, please contact us.