The Statutory Neonatal Care Pay (Miscellaneous Amendments) Regulations 2025
These regulations amend existing UK legislation to incorporate statutory neonatal care pay, as introduced by the Neonatal Care (Leave and Pay) Act 2023.
The amendments update the Statutory Payment Schemes (Electronic Communications) Regulations 2002 and Income Tax legislation (Pay As You Earn Regulations 2003 and Construction Industry Scheme Regulations 2005) to include references and administrative processes related to this new parental benefit.
The changes streamline administration and ensure consistent legal treatment of statutory neonatal care pay.
Arguments For
Enhances parental benefits: The amendments ensure that statutory neonatal care pay is correctly integrated into existing income tax and statutory payment systems. This provides families with a comprehensive benefit.
Legal consistency: The changes align legislation, ensuring consistent treatment across various acts relating to parental leave and pay. This eliminates potential discrepancies and clarifies legal obligations.
Administrative efficiency: By incorporating neonatal care pay into existing systems, administrative processes are streamlined, reducing burden on employers and government agencies.
Parliamentary approval: The regulations are enacted under the authority granted by several acts of Parliament (Finance Act 1999, Income Tax (Earnings and Pensions) Act 2003, Finance Act 2004), providing a strong legal basis.
Arguments Against
Minor administrative burden: While changes are minor, a short period of adaptation might be required by PAYE systems and related processes. However, they are largely administrative in nature and should pose minimal disruption.
Unforeseen consequences: The detailed impact assessment was conducted prior to implementation, minimizing the likelihood of unforeseen legal or financial consequences. However, rare unforeseen interactions and systemic limitations cannot be completely excluded.
Resource allocation: While streamlining processes may be cost effective in the long-term, short-term resource allocation may be required for implementation and system adjustments. Such short-term costs are not expected to be significant.
Northern Ireland exclusion: The Neonatal Care (Leave and Pay) Act 2023 does not apply to Northern Ireland. This might lead to regional disparities in parental leave benefits.
These Regulations are made by the Commissioners for His Majesty’s Revenue and Customs in exercise of the powers conferred by sections 132 and 133(1) of the Finance Act 19991, section 684 of the Income Tax (Earnings and Pensions) Act 20032 and sections 62(3)(b), (6) and (7) and 71 of the Finance Act 20043 and now exercisable by them4.
The Commissioners of His Majesty’s Revenue and Customs created these regulations.
They have the legal authority to do so under the Finance Act 1999, the Income Tax (Earnings and Pensions) Act 2003, and the Finance Act 2004.
- Citation and commencement These Regulations may be cited as the Statutory Neonatal Care Pay (Miscellaneous Amendments) Regulations 2025 and come into force on 6th April 2025.
These regulations are officially titled the Statutory Neonatal Care Pay (Miscellaneous Amendments) Regulations 2025 and took effect on April 6, 2025.
- Amendment of the Statutory Payment Schemes (Electronic Communications) Regulations 2002 (1) The Statutory Payment Schemes (Electronic Communications) Regulations 20025 are amended as follows. (2) In regulation 1(2), in the definition of “the statutory payments” for “and statutory parental bereavement pay” substitute “', statutory parental bereavement pay and statutory neonatal care pay”.”
The 2002 Statutory Payment Schemes (Electronic Communications) Regulations are updated.
Specifically, the definition of 'statutory payments' is changed to include 'statutory neonatal care pay' in addition to 'statutory parental bereavement pay'.
- Amendment of the Income Tax (Pay As You Earn) Regulations 2003 (1) The Income Tax (Pay As You Earn) Regulations 20036 are amended as follows. (2) In regulation 70(3), for “and statutory parental bereavement pay” substitute “', statutory parental bereavement pay and statutory neonatal care pay”.”
The Income Tax (Pay As You Earn) Regulations 2003 are amended to add 'statutory neonatal care pay' along with 'statutory parental bereavement pay' in regulation 70(3).
- Amendment of the Income Tax (Construction Industry Scheme) Regulations 2005 (1) The Income Tax (Construction Industry Scheme) Regulations 20057 are amended as follows. (2) In regulation 8(3), for “and statutory parental bereavement pay” substitute “', statutory parental bereavement pay and statutory neonatal care pay”.” (3) In regulation 56(2)(e), for “or statutory parental bereavement pay” substitute “', statutory parental bereavement pay or statutory neonatal care pay”.” (4) In regulation 56(7), after sub-paragraph (d) insert — (e) in respect of statutory neonatal care pay, regulations 4, 5, 6 and 8 of the Statutory Neonatal Care Pay (Administration) Regulations 20258.”
The Income Tax (Construction Industry Scheme) Regulations 2005 are also amended.
Several sections (8(3), 56(2)(e), and 56(7)) are updated to include statutory neonatal care pay alongside statutory parental bereavement pay.
A new sub-paragraph (e) is added to regulation 56(7), referencing specific regulations for administering neonatal care pay.
EXPLANATORY NOTE (This note is not part of the Regulations) The Neonatal Care (Leave and Pay) Act 2023 (c. 20) inserted a new Part 12ZE into the Social Security Contributions and Benefits Act 2002 (c. 4). This created an entitlement to statutory neonatal care pay. The 2023 Act does not apply or extend to Northern Ireland. Part 3, paragraph 34 of the Schedule to the 2023 Act provides that sections 132 and 133 of the Finance Act 1999 (c. 16) have effect as if statutory neonatal care pay were a matter which is under the care and management of the Commissioners for Revenue and Customs. These Regulations make consequential amendments to secondary legislation relating to income tax, to insert references to statutory neonatal care pay. A Tax Information and Impact Note has not been prepared for these Regulations as they are part of a package of legislative measures and the relevant impact assessment was published on 23 January 2023. A copy of the document is available at: https://publications.parliament.uk/pa/bills/cbill/58-03/0014/NeonatalCareLeaveandPayIA_Final.pdf.
This explanatory note clarifies that these regulations are a direct consequence of the Neonatal Care (Leave and Pay) Act 2023, which established statutory neonatal care pay.
It explains that the regulations amend other acts to correctly integrate the new benefit.
A full impact assessment was previously published on January 23, 2023, due to these regulations being part of a broader set of legislative actions.
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