Neonatal Care Leave and Pay: Supporting Parents of Premature Babies

Having a baby admitted to neonatal care is stressful. Since April 2024, parents have the right to neonatal care leave and pay, giving them time to be with their baby during this critical period without worrying about lost income.

What Is Neonatal Care Leave?

Introduction (April 2024)

Neonatal Care Leave and Pay became law on 6 April 2024 under the Neonatal Care (Leave and Pay) Act 2023.

Purpose: Give parents of premature or sick babies time off work to be with them during neonatal care.

Key Features

• Up to 12 weeks additional leave (on top of other parental leave)
• Paid leave (Neonatal Care Pay - NCP)
• From day one of employment (no service requirement for leave)
• Both parents can take it (if both eligible)
• Flexible: Can be taken in non-consecutive blocks

Who Qualifies?

Leave Entitlement (No Service Requirement)

For the leave itself: Any employee whose baby is admitted to neonatal care.

No minimum service required for leave (unlike paternity leave).

Pay Entitlement (26 Weeks' Service Required)

For Neonatal Care Pay (NCP): Employee must have:

• 26 weeks' continuous service by the end of the qualifying week (15th week before expected week of childbirth)
• Average earnings of at least £123/week (Lower Earnings Limit)

Same test as for SMP/SPP.

Baby's Condition

The baby must:

• Be born before 37 weeks of pregnancy, OR
• Be admitted to neonatal care for a continuous period of 7 days or more within 28 days of birth

Neonatal care means: Hospital care in a neonatal unit, including:

• Intensive care
• High dependency care
• Special care

How Much Leave?

Up to 12 Weeks

Maximum: 12 weeks per baby (not per parent).

If twins or multiple births are all in neonatal care, parents get 12 weeks per baby (so potentially 24 weeks for twins, etc.).

Length of Stay Determines Entitlement

Formula:

Weeks of neonatal care - 1 week = Neonatal leave entitlement

Example 1: Baby in neonatal care for 4 weeks.

4 - 1 = 3 weeks neonatal leave available

Example 2: Baby in neonatal care for 13 weeks.

13 - 1 = 12 weeks (capped at 12 weeks maximum)

Why Minus One Week?

The first week is considered "adjustment time" and doesn't count toward the entitlement.

Rationale: Parents are often present daily in the first week regardless, and other leave (maternity/paternity) covers this period.

How Much Is Neonatal Care Pay?

Payment Rate

Neonatal Care Pay (NCP): £184.03 per week (2024-25) or 90% of average weekly earnings, whichever is lower.

Same rate as:

• Statutory Maternity Pay (weeks 7-39)
• Statutory Paternity Pay
• Shared Parental Pay

Calculating Average Weekly Earnings

Use the same method as SMP/SPP:

8-week reference period ending with the last pay day before the end of the qualifying week (15th week before expected week of childbirth).

Formula:

Total earnings in 8 weeks ÷ 8 = Average weekly earnings

NCP rate:

Lower of: (AWE × 90%) OR £184.03

Example Calculation

Scenario:

• Baby due 20 June 2025
• Expected week of childbirth: Week beginning 16 June
• Qualifying week: 15 weeks back = week beginning 3 March
• Last pay day before Saturday 8 March: Friday 28 February
• Relevant period: 8 weeks ending 28 February

Earnings over 8 weeks: £4,800

£4,800 ÷ 8 = £600/week AWE
90% = £540/week
NCP = £184.03/week (lower of the two)

When Can It Be Taken?

Timing

Neonatal leave can be taken:

• While the baby is in neonatal care, OR
• Within 68 weeks of birth

This means: If baby comes home after 3 weeks but parents want to take some neonatal leave later, they can (within the 68-week window).

Flexibility

Can be taken:

• In one continuous block
• In multiple separate blocks (minimum 1 week per block)

Example:

• Take 4 weeks while baby is in hospital
• Take 2 weeks when baby comes home (to help with adjustment)
• Take 1 week a few months later for follow-up appointments

Notice Requirements

At least 1 week's notice before each period of leave.

Exception: If baby is admitted unexpectedly, give notice "as soon as reasonably practicable."

How It Interacts with Other Leave

Maternity Leave

Neonatal leave is additional to maternity leave.

Mother can take:

• Maternity leave (up to 52 weeks)
• And neonatal care leave (up to 12 weeks)

Total: Up to 64 weeks off.

Neonatal Care Pay is separate from SMP - both can be claimed.

Paternity Leave

Neonatal leave is additional to paternity leave.

Partner can take:

• Paternity leave (2 weeks)
• And neonatal care leave (up to 12 weeks)

Total: Up to 14 weeks off.

NCP is separate from SPP - both can be claimed.

Shared Parental Leave

Neonatal leave doesn't affect SPL entitlement.

Parents can take neonatal leave and later opt into Shared Parental Leave if they wish.

Taking Leave Simultaneously

Both parents can take neonatal leave at the same time, each receiving their own NCP (from their respective employers).

Example: Baby in neonatal care for 8 weeks. Both parents take 7 weeks' neonatal leave simultaneously.

• Mother receives 7 weeks NCP from her employer
• Partner receives 7 weeks NCP from their employer

Eligibility Examples

Example 1: Mother Returning Early

Scenario:

• Mother planned to take 26 weeks maternity leave
• Baby born at 32 weeks, admitted to neonatal care for 6 weeks
• Mother takes 6 weeks maternity leave while baby in hospital, then returns to work
• 3 months later, takes 5 weeks neonatal leave to bond with baby at home

Result: Allowed. Neonatal leave can be taken within 68 weeks of birth.

Example 2: Partner with Short Service

Scenario:

• Partner started job 3 months ago (12 weeks' service)
• Baby born prematurely, in neonatal care for 10 weeks
• Partner doesn't qualify for SPP (needs 26 weeks' service)

Neonatal leave: Can take up to 9 weeks' leave (no service requirement for leave)

Neonatal pay: No NCP (doesn't meet 26-week service requirement for pay). Leave is unpaid.

Example 3: Twins in Neonatal Care

Scenario:

• Twins born at 30 weeks
• Both in neonatal care for 8 weeks

Entitlement:

Per baby: 8 - 1 = 7 weeks
Two babies: 7 × 2 = 14 weeks maximum
Capped at 12 weeks per baby
Total: 12 + 12 = 24 weeks available (if both parents take full entitlement)

Each parent could take up to 12 weeks per baby (though in practice, care needs may not require this long).

Recovering NCP from HMRC

Same as SMP/SPP/ShPP

Employers can recover NCP through PAYE:

Employer Type	Recovery Rate
Most employers	92%
Small employers (Class 1 NI ≤ £45,000)	103%

How to Recover

• Deduct from PAYE payment to HMRC
• Record on Full Payment Submission (FPS)
• Show separately on payslips

Record Keeping

Keep records of:

• Medical evidence of neonatal care admission
• Dates of neonatal care
• Weeks of leave taken
• NCP paid
• Recovery amounts

Retention: At least 3 years after tax year.

Evidence Required

What Employers Can Ask For

Medical certificate confirming:

• Baby was born before 37 weeks, OR
• Baby was admitted to neonatal care for 7+ days within 28 days of birth
• Duration of neonatal care

Typical evidence:

• Letter from hospital
• Discharge summary (once baby leaves neonatal care)

Treating Sensitively

This is a difficult time for parents. Be compassionate and flexible with evidence requirements.

If formal evidence takes time to obtain, accept:

• Parent's declaration initially
• Obtain formal evidence later (within reasonable timeframe)

Employment Rights During Neonatal Leave

Protection from Detriment

Employees cannot be treated unfavorably for:

• Taking neonatal leave
• Requesting neonatal leave

Protection from Dismissal

Dismissal related to neonatal leave is automatically unfair.

Right to Return

After neonatal leave:

• Return to the same job if total leave (including maternity, neonatal, etc.) is 26 weeks or less
• Return to the same job or suitable alternative if total leave exceeds 26 weeks

Benefits During Leave

Statutory position: Contractual benefits (except pay) continue during neonatal leave.

This includes:

• Pension contributions (employer contributions continue)
• Company car
• Health insurance
• Other non-cash benefits

Annual Leave

Annual leave continues accruing during neonatal leave.

Premature Birth and Maternity Leave

Maternity Leave Still Starts at Birth

Even if the baby is premature, maternity leave starts:

• From the day after birth, OR
• Earlier if pregnancy-related absence occurs in the 4 weeks before EWC

Neonatal leave is on top of this.

Extended Maternity Leave?

No. Maternity leave is still 52 weeks maximum.

But: Neonatal leave gives additional time beyond the 52 weeks (if needed).

Practical Scenarios

Scenario 1: Baby in NICU for 3 Weeks

Facts:

• Baby born at 34 weeks
• 3 weeks in neonatal intensive care
• Both parents employed

Neonatal leave available:

3 weeks - 1 = 2 weeks

Outcome:

• Mother takes maternity leave as planned
• Partner takes 2 weeks neonatal leave (in addition to 2 weeks paternity leave)
• Partner gets 2 weeks NCP + 2 weeks SPP

Scenario 2: Baby in Special Care for 14 Weeks

Facts:

• Baby born at 28 weeks
• 14 weeks in neonatal care
• Mother employed, partner self-employed

Neonatal leave available:

14 weeks - 1 = 13 weeks (capped at 12 weeks maximum)

Outcome:

• Mother can take up to 12 weeks neonatal leave (on top of maternity leave)
• Receives 12 weeks NCP (in addition to SMP)
• Partner (self-employed) doesn't qualify for neonatal leave (not an employee)

Scenario 3: Baby Home, Then Readmitted

Facts:

• Baby born at 35 weeks
• 2 weeks in neonatal care
• Home for 1 week
• Readmitted for 4 more weeks

Neonatal leave available:

Total neonatal care: 2 + 4 = 6 weeks
6 weeks - 1 = 5 weeks

Outcome: 5 weeks neonatal leave available, can be taken while baby is in hospital or later.

Key Differences from Other Leave

vs Maternity Leave

Feature	Maternity Leave	Neonatal Care Leave
Who can take	Mother only	Both parents
Maximum duration	52 weeks	12 weeks (per baby)
Service requirement	None (leave) / 26 weeks (pay)	None (leave) / 26 weeks (pay)
When taken	From birth	During/after neonatal care
Additional to other leave?	No	Yes

vs Paternity Leave

Feature	Paternity Leave	Neonatal Care Leave
Maximum duration	2 weeks	12 weeks (per baby)
Flexibility	Can split into 2 separate weeks (from 2024)	Can take in multiple blocks
Service requirement	26 weeks	None (leave) / 26 weeks (pay)
Condition	Baby born/adopted	Baby in neonatal care 7+ days

Employer Obligations

Provide Information

Inform employees of:

• Neonatal leave rights
• How to request leave
• Evidence required
• Payment rates

Process Requests

• Respond to requests promptly
• Don't refuse if employee is eligible
• Be flexible with evidence collection
• Process NCP payments on time

Support Employees

• Compassionate approach
• Regular contact (if employee wants it)
• Support on return to work
• Consider adjustments (if baby has ongoing health needs)

Common Questions

Q: Can both parents take neonatal leave at the same time?

A: Yes. Each parent has their own entitlement, paid by their own employer.

Q: What if the baby sadly dies?

A: Neonatal leave entitlement is still available (based on time in neonatal care). Treat with extreme sensitivity.

Q: Does neonatal leave count toward continuous service?

A: Yes. Employment is continuous during neonatal leave.

Q: Can neonatal leave be taken after the baby comes home?

A: Yes, as long as it's within 68 weeks of birth.

Q: What if I don't have 26 weeks' service?

A: You can still take the leave (unpaid). You won't get NCP but you have the right to the time off.

Practical Tips for Employers

Tip 1: Update Policies

Add neonatal leave to:

• Parental leave policy
• Employee handbook
• New starter information

Tip 2: Train Managers

Ensure line managers know:

• Neonatal leave exists
• Who qualifies
• How to process requests
• Sensitivity required

Tip 3: Update Payroll

Ensure payroll systems can:

• Process NCP
• Recover NCP through PAYE
• Show NCP separately on payslips

Tip 4: Communicate Sensitively

When an employee's baby is in neonatal care:

• Reach out with compassion
• Offer support
• Explain rights clearly (in writing, as verbal info may not be retained during stressful time)
• Don't pressure for evidence immediately

Tip 5: Keep in Touch

During neonatal leave:

• Ask how they want to be contacted
• Respect boundaries
• Offer support on return

Key Takeaways

• Up to 12 weeks additional leave for parents of babies in neonatal care 7+ days
• From April 2024 - new right
• No service requirement for leave itself (26 weeks for pay)
• £184.03/week or 90% of average earnings
• Separate from maternity/paternity/adoption/shared parental leave
• Both parents can take it (from their own employers)
• Flexible timing - within 68 weeks of birth
• Employers recover 92% or 103% through PAYE

Neonatal care leave recognizes the unique stress of having a premature or sick baby, giving parents vital time to be present during this critical period.