COVID PUP - Self-employed and unemployment - 23 June 2020

We have been asked by a few self-employed clients re return to work and if they must cease the Covid Pandemic Unemployment Payment. We have been on to the Department of Social welfare and they have advised that yes you need to cease this payment, but you may be eligible for a Job Seekers Payment

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 than before you may qualify for a jobseeker's payment. You do not need to de-register as self-employed to get a payment. However you must meet the conditions that apply to jobseeker's payments.

Jobseeker's Allowance

Jobseeker's Allowance (JA) is a weekly payment from DEASP to jobseeker's. To get Jobseeker’s Allowance you must be habitually resident and 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 and you don't have to be unemployed for at least 4 out of 7 days, as for Jobseeker's Benefit. 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 business 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:

f-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)
• Advertising
• Bank charges
• Stationery
• Van leasing
• Any other costs associated with running the business (household running costs are not allowed as deductions against business profit)

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 Intreo Centre or Social Welfare Branch Office.