Neonatal Care Leave and Miscellaneous Amendments Regulations 2025

Baroness Jones of Whitchurch Excerpts

Monday 10th March 2025 Grand Committee

Moved by

[Baroness Jones of Whitchurch]

That the Grand Committee do consider the Neonatal Care Leave and Miscellaneous Amendments Regulations 2025.

Relevant document: 16th Report from the Secondary Legislation Scrutiny Committee

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)]

My Lords, I am delighted to bring these regulations, which were laid before the House on 2 January, forward under the Neonatal Care (Leave and Pay) Act 2023, which originated as a Private Member’s Bill during the previous Parliament. I pay tribute to Stuart McDonald—the former Member for Cumbernauld, Kilsyth and Kirkintilloch East—and the noble Baroness, Lady Wyld, for successfully steering that Private Member’s Bill through the various stages in both Houses to secure Royal Assent in 2023. The Act establishes new statutory entitlements to neonatal care leave and neonatal care pay for employed parents if their child starts to receive neonatal care within 28 days after birth and goes on to spend seven or more continuous days in care. These regulations are another step towards the implementation of neonatal care leave and pay in April this year, and they are the first to be brought before the Committee under the powers of the Act.

Currently, there is no statutory entitlement for parents of children who require neonatal care. Until now, parents in this difficult situation have had to rely on using other existing rights, such as maternity leave or annual leave, in order to be there to care for their baby and to support their partner. This approach has caused additional stress for parents. Some mothers have reported that they had to leave work because they were not ready to return at the end of their maternity leave. Because paternity leave is limited to two weeks, some fathers and partners have to rely on statutory unpaid parental leave or the compassion of their employers in order to take time off work.

Around 40,000 babies spend over one week in neonatal care each year. Once neonatal care leave and pay comes into force in April 2025, we estimate that around 60,000 parents will be eligible and that around 34,000 parents will take up paid neonatal care leave each year.

What do the SIs do? Neonatal care leave will enable eligible parents to take a minimum of one week and a maximum of 12 weeks of leave, in line with the number of weeks for which their baby receives neonatal care, on top of their other parental leave entitlements. Neonatal care leave will be a day 1 right for employees.

Statutory neonatal care pay, like other family-related pay rights, will be available to employees who also meet continuity of service and minimum earnings tests. Eligible employees must have worked for their employer for at least 26 weeks ending with the relevant week and must earn, on average, at least £125 per week before tax. If eligible, the parent will be able to claim a flat rate of £187.18 per week in the 2025-26 financial year, or 90% of their average earnings, whichever amount is lower.

Employers will administer the statutory payment on behalf of the Government. Small employers will be able to recover 103% of their statutory payment from the Exchequer, while larger employers can recover 92% of payments, and will therefore incur wage-like costs equivalent to 8% of the statutory payments they make. A similar arrangement applies for all other existing statutory parental payments.

Together, these regulations will provide protection and support for parents at an incredibly challenging time. These entitlements provide a floor, and employers can and should go further if they are able to.

We have consulted extensively with stakeholders, including charities and business representative organisations, to ensure that these regulations balance the needs of parents and businesses. These groups agreed that the proposed reforms would provide substantial benefits to businesses, including retaining the skills and knowledge of their current employees.

I will now explain a few points of detail in the regulations. These have been developed through consultation, including with the Department of Health and Social Care and NHS professionals.

We have designed a definition for neonatal care that encapsulates the different ways in which babies receive it, going beyond the walls of hospitals and including outreach care. This could include care that takes place within the family home, provided it meets the relevant criteria.

We have included outreach care in the eligibility criteria to capture the many ways in which babies receive care, and also to prevent a postcode lottery, where parents of children who receive the same clinical treatment may qualify in one area, as they receive treatment in hospital, but not in another, as they receive treatment at home through an outreach care programme.

To ensure that as many parents as possible are eligible, the definition of “parent” in the regulations encompasses adoptive parents, foster-to-adopt parents and intended parents in surrogacy arrangements. Those who meet this definition would also be required to have responsibility for the upbringing of the child and be caring for the child at the time of taking their leave and pay.

Having a baby in neonatal care is a difficult experience for any parent, whether the baby is admitted for one day or for many months. However, this entitlement will focus on parents of babies who experience prolonged stays in neonatal care, as they will be in most need of additional support. The qualifying period of neonatal care, as set out in the Act, will be a minimum of seven continuous days beginning on the day after the one on which the care starts. Starting the clock at 00.01 am—one minute past midnight—of the day after the child is admitted creates a consistent approach that does not vary from baby to baby.

--- Later in debate ---

[Baroness Jones of Whitchurch (Lab)]

My Lords, I am grateful for the support across the Committee for these regulations. Again, I thank the noble Baroness, Lady Wyld, who rightly paid tribute to the parents and campaigners; I absolutely echo that point. Without that pressure, which all Governments have received, these measures simply would not have come forward. We are very grateful for the campaigners and the parents behind all of this. The noble Baroness also mentioned cross-party working. Private Members’ Bills are often a good illustration of that; I know this from the ones I have been involved in.

The noble Baroness, Lady Wyld, asked about the people who might be excluded. That is a good question and goes some way to answering the point made by the noble Lord, Lord Sharpe. We are just setting a minimum standard here, of course. This is a minimum standard, but we encourage employers to go above and beyond it. Many do so already and recognise the benefits that this brings to their businesses. We will keep this whole issue under review; the charities and campaigners will require that of us, I think, going back to the point made by the noble Lord, Lord Sharpe. We will want to see how the rollout goes but this is a good start. As with many regulations, we want to embed this measure before we do any further evaluation of it.

The noble Lord, Lord Sharpe, asked about making sure that we have a smooth implementation so that everybody knows what is going on. My officials are working with HMRC to develop and publish guidance on GOV.UK, which will explain the requirements of the legislation. In developing this guidance, we are undertaking user testing to ensure that it is fit for purpose. Ahead of implementation, my officials have been engaging with stakeholders—including employer groups, payroll providers, IT software developers and ACAS charities—and ensuring that we have posters in neonatal wards to advertise the benefits; I hope that that will make sure that the word spreads as widely as it possibly can.

I am grateful to the noble Lord for talking about some of the other measures and family-friendly policies that the previous Government introduced. I was pleased to hear about those; I hope that it bodes well for the debates that we are going to have on the Employment Rights Bill when we come to it in due course.

In the meantime, the provisions outlined in these SIs will provide for new parents with babies in neonatal care the ability to benefit from additional time off as a day 1 right. We should not lose sight of how important that is. Currently, many working families across the UK are having to return to work while their babies are sick and receiving care. As I said before, some mothers are also having to leave work because they are simply not ready to return to work. These measures aim to address some of the difficulties that thousands of parents face when their babies are in neonatal care or afterwards. They are a huge step forward.

We hope that the change in the law will also send a signal of encouragement to employers about the significance of recognising the struggles that parents go through when their very young child is unwell and of the need to provide them with appropriate support in all ways—not just with leave and pay but in other forms of support as well. Of course, I acknowledge that many employers are already providing that support to parents, but there is more that they can do; we all have an education role to play in all of that, I think.

In the meantime, I again thank noble Lords for all their comments.

Motion agreed.