Neonatal leave and pay

aat comment

It can be hard to keep track of governmental changes to workforce protections and regulations. Here’s a summary of the Neonatal Care (Leave and Pay) Bill.

Working practices change over the years, and the Government is constantly reviewing and updating laws and regulations to meet workforce needs. Neonatal Care (Leave and Pay) Bill, which is currently going through Parliament, is an example of ever-evolving efforts. This Bill creates a statutory right to leave and pay for the parents of children who require neonatal care.

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The provision

The Bill defines neonatal care as:

  • “of a medical or palliative kind” and “that starts before the end of a period of 28 days beginning with the day after the date of the child’s birth”. The latter provision means that children who have been discharged home but who consequently need to be hospitalised are included.
  • where the child has to be hospitalised for at least a week (seven days).
  • The maximum amount of neonatal leave available is 12 weeks and will be added to the end of the maternity leave.
  • Neonatal leave is for the primary carers of the child. That is:
    • the mother and father
    • a partner (spouse, civil partner or partner who is in a permanent relationship) who lives with the mother and child
    • parents in a surrogacy arrangement
    • parents in an adoption arrangement.

Neonatal leave would be a ‘day one’ right for the employee while neonatal pay would have to meet the minimum earnings test as with other parental payments. This will enable employees not eligible for paternity leave to be able to take time to be with the baby and to support the mother.

Employees will have the same employment protection they receive with other statutory parental leave so their right to return to the same job is protected.

As with other statutory payments employers are able to reclaim back a proportion of Statutory Neonatal Pay.


The statutory parental pay rate for 2023-24 is £172.48. The Lower Earnings Limit (LEL) used in the Average Weekly Earnings (SWE) is £123.

Small employers are defined as those with NIC payments under £45,000. They are entitled to claim back 103% of the pay, whilst other employers can claim 92%.


The neonatal care leave Members Bill is currently working its way through Parliament. When passed employers will need to put in place budgetary contingencies as appropriate.

Need to know more?

Members can find further information on payroll in Knowledge Hub.

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Julie Hodgskin is a fellow member of AAT, runs a licensed accounting practice and is a technical materials author for CIPP.

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