About 40,000 babies born each year have to spend more than a week in neonatal care

Parents of newborn babies who fall ill will be given £160 a week on top of maternity and paternity pay in a budget windfall for families this week.

Rishi Sunak, the chancellor, will announce the change when he unveils the government’s economic plans on Wednesday, which will see upwards of £50bn poured into infrastructure projects over the next five years.

Under the plans, parents who need to take time off to care for a sick child will be able to claim the extra money for up to 12 weeks. The payments will help the families of the 40,000 babies born each year who have to spend more than a week in neonatal care.

Kemi Badenoch, a Treasury minister who is currently on maternity leave,