We’ve already seen that the Autumn Budget will mean changes to payroll challenges in the next financial year. It’s also important to remember to be ready for the changes that will be coming with the implementation of the Neonatal Care (Leave and Pay) Act 2023, which will come into effect in April 2025. While we’ve been waiting for the act to come into force, we’ve been preparing – and you should too.
What does neonatal care mean?
Under these new rules, neonatal care will be defined as care provided to a child within 28 days of birth. The act covers any care given in a hospital setting over the course of seven or more days, starting within 28 days of birth. The act does not define particular conditions and has a broad scope of what kinds of neonatal care may be covered.
What’s changing?
There are two main provisions in the act: leave and pay. Neonatal Care Leave (NCL) will be available on top of existing parental leave, with up to twelve weeks allocated to qualifying parents. This can be taken in one of two tiers, a week at a time.
The first tier is leave taken while a child is undergoing care, or in the week immediately following discharge. This leave does not require notice, and a parent can leave work at short notice, allowing them to be more flexible and reactive to unexpected changes in circumstances. If a child is taken into neonatal care during a period of booked parental leave, the neonatal care leave can be taken after the booked parental leave finishes. Any leave the parent was entitled to, but didn’t use, will then be made available at a later date.
Any leave that is still available is then moved to tier two. This remaining leave can be taken, up to the qualified limit, any time in the 68 weeks after the child’s actual birth. Tier two leave should be taken in a single, continuous block when it can be planned, and notice should be given in advance.
While taking Neonatal Care Leave, parents are entitled to Statutory Neonatal Care Pay (SNCP). This will be set at either the statutory prescribed rate, or 90% of average weekly earnings, whichever is lower. We await confirmation from the Department of Work and Pensions as to what level the statutory prescribed rate will be set at.
Similar to other statutory payments like Statutory Maternity Pay, SNCP will be processed through payroll and reported to HMRC via RTI. Ensuring that this is done efficiently and compliantly will rely on a well-managed payroll system.
Who qualifies?
There are different criteria that must be met for the leave and pay entitlements. For a parent to claim NCL, they must have a child who has entered neonatal care within 28 days of birth, for a period of at least seven days, and is a right from day one under the new act. The leave will be allocated at one full week of leave per full week (period of seven days) the child spends in neonatal care. On top of the requirements for leave, the right to SNCP is dependent on having a record of 26 weeks of continuous service and exceeding the £123 per week lower earnings limit.
How can we help?
At OneAdvanced, we are already preparing for the changes to come, and updates will be ready at the start of the new financial year. Our Payroll solution can support you, with tools to help you automate the process of allocating and recording statutory pay and leave. When the legislation comes into effect, we will be rolling out an update that will include the capabilities you need to make a smooth transition. This means that our customers won’t have to worry, with the update coming in time to meet this new challenge.
Customers using our cloud-based solution will benefit from an automatic roll-out, so they can relax, safe in the knowledge that their system will be ready. Our customers who are still using an on-premises instance will also be supported to install the update to ensure they maintain compliance.
If you want to know how we can support your payroll compliance, discover Payroll from OneAdvanced – our HMRC-approved payroll solution. You can also learn more about our suite of People Management solutions, or get in touch with one of our experts to discuss how we can help you.