EIM76400 - Statutory Neonatal Care pay: Summary
Part 10 Chapter 3 ITEPA 2003
Employed parents, including adoptive parents, parents who are fostering to adopt and the intended parents in surrogacy arrangements, whose babies are born on or after 6 April 2025 and are admitted into neonatal care up to the age of 28 days, and who have a continuous stay of seven full days or more, are entitled to up to 12 weeks of Statutory Neonatal Care Leave as a ‘day-one’ right.
Parents with at least 26 weeks’ continuous service with their employer (ending with the relevant week) and weekly average earnings of at least the Lower Earnings Limit are also entitled to up to 12 weeks of Statutory Neonatal Care Pay (SNCP).
SNCP is paid at the statutory rate, or 90% of average weekly earnings, whichever is lower.
Eligible parents can take a minimum of one week, and a maximum of 12 weeks, leave and pay, depending on how long their baby is in neonatal care. This is in addition to other statutory entitlements such as maternity, paternity and shared parental leave.
Leave and pay can be taken in 2 Tiers, Tier 1 and Tier 2. The notice and evidence requirements are different for each Tier.
Tier 1 is the period when the child is still receiving neonatal care, and including one week after the care has ended.
Tier 2 is the period outside the Tier 1 period and before the end of 68 weeks from the date of the child’s birth.
Employers are responsible for administering the scheme and paying their employees the amount to which they are entitled. HMRC is responsible for ensuring that employers correctly administer the scheme and for providing employers with the funding to which they are entitled.
Any enquiries about entitlement to SNCP should be dealt with initially by the Employers’ Helpline. (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
For more information on SNCP, see the SNCP Employer Guide on GOV.UK.
SNCP is taxable.
SNCP is not a social security benefit, but replacement earnings charged to tax as employment income.
An employer is still required to pay SNCP even if the employment ceases. If an employer fails or refuses to pay SNCP, HMRC will pay SNCP direct to the claimant but without operating PAYE. Where payments of SNCP are not paid by the employer, for example if HMRC pay them because the employer is insolvent, section 660 ITEPA 2003 ensures that the payments are charged to tax as social security income.
National Insurance contributions are payable on SNCP.
Interaction with other pay
SNCP does not affect an employee’s right to any other remuneration provided by their employer. However, SNCP can be offset against any other remuneration paid by the employer for the same period.
SSP will be paid in place of SNCP if the employee is absent from work because of incapacity, however the employee has 68 weeks from the date of the child’s birth to claim SNCP so will be able to claim at a later date if this applies.
How employers recover the cost of SNCP
The SNCP legislation allows the employer to recover costs of SNCP from HMRC.
Use of the abbreviation SNCP
The abbreviation SNCP is used in BEIS literature and certain PAYE, National Insurance and Statutory Payment guides and forms. You can use this abbreviation when dealing with employers, collectors and other tax offices.