This article is specifically on the Short Term Enterprise Allowance. Despite the myth there is financial support for those going the self employed route who need assistance from social welfare.
The Short-Term Enterprise Allowance (STEA) gives support to people who have lost their job and want to start their own business.
To qualify you must be getting Jobseeker’s Benefit. There is no qualifying period, which means you do not need to have been getting Jobseeker’s Benefit for a certain period of time. However, you will not qualify if you are getting Jobseeker’s Benefit and working part-time.
From 4 April 2013 the Short-Term Enterprise Allowance is paid instead of your Jobseeker’s Benefit for a maximum of 9 months. It ends when your entitlement to Jobseeker’s Benefit ends (that is at either 9 or 6 months).
To qualify for the Short-Term Enterprise Allowance you must be getting or have an entitlement to Jobseeker’s Benefit.
Your business plan must be approved in advance in writing by a Case Officer based in an Intreo Centre or a social welfare local office or an Enterprise Officer in your local development company (also known as partnership company) (see ‘How to apply’ below).
Seasonal, temporary or part time self-employment does not qualify for the STEA.
You must contact the Department of Social Protection immediately if your self-employment ends or you take up employment.
If you are unemployed when your entitlement to STEA ends you will not immediately re-qualify for Jobseeker’s Benefit. However, you can apply forJobseeker’s Allowance, which is a means-tested payment.
Employment grants from a Local Enterprise Office (LEO) or a local development company do not affect your entitlement to the Short-Term Enterprise Allowance.
Help with starting a business
In addition to income support (your weekly payment), you can also get financial support with the costs of setting up your business. These supports are provided under a scheme called the Enterprise Support Grant (ESG). (The ESG replaced the Technical Assistance and Training Scheme (TATS) from 16 April 2014.)
You can only get the ESG if you have been approved for either the Back to Work Enterprise Allowance or the Short-Term Enterprise Allowance. The business plan you submit as part of your application for the scheme must set out the rationale and requirement for financial support. The ESG is paid to people getting the STEA on a pro-rata basis – a maximum of €937 can be paid to people on a 9-month STEA and a maximum of €625 to people on a 6-month STEA. You must be able to make a matching contribution of at least 20% to access grant support. You need to provide documentary evidence of the costs (quotations from at least 2 suppliers or, if a single supplier, the reasons for choosing a single supplier).
Eligible items for grant support include:
|Category||Annual limit, €||Minimum contribution from applicant|
|Accountancy and related services including legal advice||Up to €500||20%|
|Advertising and marketing aids||Up to €500||20%|
|Business equipment||Up to €1,000||20%|
|Business mentoring (this can be offered free or at a reduced rate by Local Enterprise Officers (LEOs) or local development companies||Up to €250||20%|
|Business registration costs and fees||Up to €250||20%|
|Compliance, guidance and training||Up to €250||20%|
|Job-specific tools and equipment||Up to €1,000||20%|
|Office supplies and stationery||Up to €250||20%|
|Personal protective clothing and equipment||Up to €250||20%|
|Public Liability Insurance costs associated with setting up a business – no other insurance is eligible||Up to €1,000||20%|
|Short-term training on book-keeping, regulation, rollout of business plan, start-your-own-business and courses of training related to the start-up||Up to €250||20%|
|Signage||Up to €500||20%|
|Upgrading to premises where the premises is owned by the applicant||Up to €1,000||20%|
|Website registration, related services and production||Up to €500||20%|
|Combination of above in any 24-month period (for long-term BTWEA)||€2,500|
|Note that the ESG is paid to people getting the STEA on a pro-rata basis. A maximum of €937 can be paid to people on a 9-month STEA and a maximum of €625 to people on a 6-month STEA.|
Note that you do not have an automatic right to any of these amounts. The Department of Social Protection’s Case Officer will assess your application and eligibility.
Some items are not eligible for grant support under the ESG. These include:
- Building/premises rental costs
- Cost of travel
- Insurance (except public liability)
- Personal clothing and uniforms (except protective clothing)
- Professional development programmes arranged by professional and regulatory bodies
- Purchase of any type of vehicle
- Training or education other than that specified
- Utility costs, connection or supply and local authority rates
If you qualify, the Short-Term Enterprise Allowance replaces your Jobseeker’s Benefit. The STEA will be paid at the same rate as your Jobseeker’s Benefit, including any increases for adult and child dependants. It ends when your entitlement to Jobseeker’s Benefit ends. The STEA may be paid directly into your bank or building society account on a weekly basis. It cannot be paid into a mortgage account.
You do not pay PRSI or Universal Social Charge on the STEA. However the STEA is subject to income tax in the same way as Jobseeker’s Benefit. (Note that this is different from the Back to Work Enterprise Allowance which is not taxable). You may qualify for Start Your Own Business Relief provides a two-year exemption from income tax (up to a maximum of €40,000 each year) for people who have been unemployed for at least 12 months before starting their own business. It runs from 23 October 2013 to 31 December 2016. (However if you started to get the STEA before 25 October 2013 you do not qualify for the relief because you had already started your business before the start date for the scheme.)
You can keep any extra (or secondary benefits) that you were getting with your Jobseeker’s Benefit provided you continue to satisfy the conditions. For example, a medical card and Back to School Clothing and Footwear Allowance.
However, an increase in your income may affect your Rent Supplement. To find out how your Rent Supplement may be affected contact the Department of Social Protection’s representative (formerly known as the Community Welfare Officer) in your local health centre.
How to apply
To apply for the Short-Term Enterprise Allowance, complete application form STEA 1 (pdf).
If you live in an area covered by a local development company (LDC) you should return form STEA 1 to the Enterprise Officer. If you do not live in a LDC area, you should return form STEA 1 to the Case Officer in your local Intreo centre or social welfare local office.
The Enterprise Officer or Case Officer will look at your business proposal and may discuss certain aspects of it with you. You must not take up self-employment until you get written approval from the LDC or Department of Social Protection.
If you are accepted on to the Short-Term Enterprise Allowance, you must register as self-employed with the Revenue Commissioners. You can find more information on self-employment from your local tax office.