Self-employed people can become unemployed if their business has to close down. It may also be the case, though you continue to be self-employed the amount of work you are getting has reduced so much that it no longer provides you with a sufficient income.
If you find yourself unemployed or you are getting less work you may qualify for a social welfare payment. You do not need to de-register as self-employed to get a social welfare payment.
If you do not qualify for a social welfare payment you may be eligible to sign on for unemployment credits or pay voluntary contributions. Unemployment credits and voluntary contributions can help you to qualify for a social insurance payment in the future.
Self-employed people pay Class S PRSI. Class S PRSI only covers you for certain social welfare payments. It does not cover you for Jobseeker’s Benefit.
However, if you worked as an employee in the last 4 years, you may have paid Class A PRSI and should apply to your Social Welfare Local Office for Jobseeker’s Benefit. Your Social Welfare Local Office will check their records to find out whether you have enough Class A contributions to get Jobseeker’s Benefit.
If you get Jobseeker’s Benefit you may continue to do some work. However, you must have lost at least one day of employment and as a result of this loss be unemployed for at least 3 days out of 6 days. Your earnings must also have been reduced because of the loss of employment.
For example, if you are engaged under a contract for service to work (on a self-employed basis) for 3 days per week and unemployed for the remainder of the week, you may qualify for Jobseeker’s Benefit. Jobseeker’s Benefit is taxable.
If you do not qualify for Jobseeker’s Benefit you may get Jobseeker’s Allowance. When you apply for Jobseeker’s Benefit you will be asked if you want to be assessed for Jobseeker’s Allowance if your claim for Jobseeker’s Benefit is unsuccessful.
To get Jobseeker’s Allowance you must be:
- Over 18 and under 66
- Capable of work, available for work and genuinely seeking work
- Habitually resident
- Pass a means test
If you are self-employed, you may be entitled to Jobseeker’s Allowance depending on your earnings from your business. You do not need to close your business or stop working as self-employed for you to get Jobseeker’s Allowance. You will get Jobseeker’s Allowance if your income is below a certain level.
Income from self-employment and the means test
The earnings from your business will be assessed in the means test for Jobseeker’s Allowance. The assessment must reflect the income you may reasonably be expected to get from your business over the next 12 months. Income for the last 12 months will be taken as a guide but allowing for any factors which it is known will vary. You should be prepared to discuss these factors when you are assessed for Jobseeker’s Allowance.
Earnings are assessed as gross income less work related expenses over 12 months. Your expected annual earnings from self-employment is divided by 52 to find your weekly means from self-employment.
Any ‘drawings’ you take from the business is not an allowable expense. If your ‘drawings’ from the business are greater than the level of income calculated, the ‘drawings’ are assessed as cash income.
There is no exhaustive list of all expenses allowed because expenses vary with the nature and extent of the self-employment. However the following are the main allowable expenses in most cases:
- Materials (supplies costs)
- Motor running costs (portion applicable to business)
- Depreciation of machinery or equipment
- Insurance relating to the business
- Telephone (portion applicable to business)
- Lighting and heating (for business and not domestic use)
- Bank charges
- Van leasing
- Labour costs
- Pension plan
- Any other costs associated with running the business
- Household running costs are not allowed as deductions against business profit
- Class S PRSI contributions (where paid or payable) (Note if payable but not being paid, a separate report should be made by the Social Welfare Investigator on this aspect.)
To prove the level of income from your business you must give your receipts and payments (documentation showing money coming in and out of your business) or audited accounts to the person dealing with your application in your Social Welfare Local Office.
When you apply for Jobseeker’s Allowance (JA)
Usually, you will be asked for your receipts and payments or audited accounts for the current and previous year. For example, if you apply for Jobseeker’s Allowance in April 2011 you will be asked for your receipts and payments from January to April 2011 and for 2010. However, in certain cases you may be required to show audited accounts for the last two or more years. Find out more about signing on for a jobseeker’s payment.
You may qualify for Supplementary Welfare Allowance while you are waiting to be assessed for a jobseeker’s payment or if you don’t qualify for a jobseeker’s payment.
Supplementary Welfare Allowance
Supplementary Welfare Allowance provides a basic weekly allowance to eligible people who have little or no income. If your weekly income is below the Supplementary Welfare Allowance rate for your family size, a payment may be made to bring your income up to the appropriate Supplementary Welfare Allowance rate.
You cannot get Supplementary Welfare Allowance if you are working more than 29 hours per week.
If you have claimed a jobseeker’s payment but it has not yet been paid and you have no other income, you may qualify for Supplementary Welfare Allowance while you are awaiting payment.
You may get help with mortgage interest repayments or help with paying your rent. If you are in local authority housing you should contact your local authority and ask for a review of your rent because of the reduction in your income.
Children at school
You may get help with the cost of uniforms and footwear for children attending school. The Back to School Clothing and Footwear Allowance Scheme operates from 1 June to 30 September each year.