Employee Circumstances That Affect Payment of Statutory Neonatal Care Pay (SNCP)

Introduction

Managing payroll and statutory payments can be complex, especially when it comes to new statutory entitlements like the Statutory Neonatal Care Pay (SNCP). As Finance Controllers, Finance Managers, or Accountants, it’s essential to understand how specific employee circumstances can affect the payment of SNCP to ensure compliance and accuracy in payroll processing.

Key Employee Circumstances Affecting SNCP

For SMEs with up to 500 employees, understanding how statutory pay rules impact payroll is critical. Whether managing payroll for a small business with 20 employees or a mid-sized enterprise with 300 staff, compliance with SNCP regulations is essential to avoid financial and legal issues. Let's look at some real-world scenarios and examples.

1. Employee Earnings Affected by a Backdated Pay Rise

   • If a backdated pay rise increases an employee’s earnings within the relevant period, recalculate their average weekly earnings (AWE) and pay any additional SNCP due. For example, if a finance assistant in a company with 150 employees receives a backdated pay increase after maternity leave, you may need to reassess their SNCP eligibility.

   • If the rise makes an ineligible employee eligible, SNCP must be paid accordingly.

2. Underpayments and Overpayments

   • Recalculate the AWE if underpayments or overpayments affect earnings. Use documented, agreed earnings where available; otherwise, use actual earnings.

3. Salary Sacrifice Arrangements

   • SNCP cannot be sacrificed under any salary sacrifice scheme. The amount paid must reflect the full statutory entitlement.

4. Multiple Births from the Same Pregnancy

   • Regardless of the number of children born from a single pregnancy, the employee is entitled to up to 12 weeks of SNCP, provided eligibility criteria are met. For instance, if a payroll manager at an SME with 80 employees has twins requiring neonatal care, they are still eligible for up to 12 weeks of SNCP.

5. Employee Death During SNCP Period

   • If the employee dies during the SNCP period, pay for the week of death but not for any subsequent weeks.

6. Employee Leaves Before Taking SNCP

   • The employee must be employed during the week before the SNCP period to qualify. If they leave before then, no SNCP is due.

7. Reinstatement After Dismissal or Armed Forces Service

   • Dismissed employees who are later reinstated by a tribunal or as part of a grievance procedure may still qualify. Similarly, employees returning from armed forces service may retain eligibility.

8. Breaks in Employment

   • Short-term breaks or temporary cessations in work do not necessarily break continuity for SNCP eligibility, including for sickness, maternity, adoption, paternity, or parental bereavement leave.

9. Legal Custody or Working for Another Employer

   • No SNCP is payable for any week in which the employee is in legal custody. Additionally, if an employee works for another employer not listed during the relevant week, SNCP must cease.

Conclusion

This article serves as a guideline to help navigate the complexities of Statutory Neonatal Care Pay (SNCP). If you need further assistance, the Givver team and our partners specializing in SNCP are always available to support you. Don’t hesitate to reach out for tailored advice or solutions.

Staying informed about how different circumstances impact SNCP eligibility and payments is crucial for maintaining compliance. By following HMRC guidelines, finance professionals can ensure that payments are processed correctly and employees receive their statutory entitlements without disruption.

For further details on how employee circumstances can impact the payment of Statutory Neonatal Care Pay, visit the official HMRC guidance.