Back to Work Enterprise Allowance (Self-Employed)


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(SELF-EMPLOYED ONLY)

GUIDELINES

INDEX

PART 1: GENERAL

  1. 1.1 Description of Scheme
  2. 1.2 Information Leaflet
  3. 1.3 Legislation
  4. 1.4 Administration

PART 2: ENTITLEMENT

  1. 2.1 Qualifying Conditions
  2. 2.2 Other Qualifying Periods
  3. 2.3 Qualifying Combination of Payments
  4. 2.4 Extending the Periods in Receipt of Social Welfare
  5. 2.5 Qualified Adults Spousal Swap
  6. 2.6 Disqualification
  7. 2.7 Absence from the State
  8. 2.8 Resumptions
  9. 2.9 Nature of Employment
  10. 2.10 Rates Structure
  11. 2.11 Extra benefits

PART 3: CLAIMS AND PROCEDURES

  1. 3.1 Investigation
  2. 3.2 Claims
  3. 3.3 Decisions
  4. 3.4 Request for Review of Entitlement (Appeals)
  5. 3.5 Payment
  6. 3.6 Maintenance/Review
  7. 3.7 Continuing Payment after a Death in the Family
  8. 3.8 Credits

Appendix 1: Budget Changes since 1997

Appendix 2: Technical Assistance & Training Fund (TAT)


PART 1: GENERAL

1.1 Description of Scheme

The Back to Work Enterprise Allowance was established in March 1999. Prior to that, the first year was known as the Area Allowance (Enterprise) (AAE) aspect of the Area Based Initiative (ABI) while Years 2-3-4 were known simply as the Back To Work Allowance (Self-employed).

It is designed to encourage the long term unemployed to take up self employment opportunities by allowing them to retain a reducing proportion of their social welfare payment plus secondary benefits over two years.

From May 1st 2009, the allowance is paid on a reducing scale over a two year period, i.e. 100% of a person's social welfare payment in year one and 75% in year two.

For information purposes, details of budget changes to the scheme from 1997 are contained at Appendix 1.

1.2 Information leaflet:

SW92: Back To Work Enterprise Allowance formerly the Area Allowance (Enterprise)

This information leaflet also incorporates the appropriate application form ( BTW2).

1.3 Legislation:

The Back to Work Allowance Scheme is a non statutory scheme approved by Government. Government Decision S.27511B of 21 Iúil 1993 refers.

1.4 Administration:

The scheme is administered by:

Back to Work Allowance Section
Department of Social Protection
Employment Support Services
Shannon Lodge
Carrick-on-Shannon
Co Leitrim

Telephone Number: (071) 9672698

Fax (071) 9672553


PART 2: ENTITLEMENT

2.1 Qualifying conditions

To qualify, applicants must satisfy the following conditions immediately prior to commencing self employment:

  • be setting up a self-employment business which has been approved, in writing, in advance by a Partnership Company or a Departmental Case Officer
  1. AND
  • be 12 months (312 days) getting Jobseeker's Benefit or Jobseeker's Allowance. A person on Jobseekers Benefit must have an underlying entitlement to Jobseekers Allowance. If there is no jobseekers allowance entitlement, the qualifying period for a Jobseekers Benefit recipient is two years.
  1. OR
  • in receipt of One-Parent Family Payment, Disability Allowance, Blind Person's Pensions, Carer's Allowance (Having ceased caring responsibilities), Farm Assist, Invalidity Pension, Incapacity Supplement, Pre-Retirement Allowance, Widows/Widowers Non Contributory Pension, Deserted Wife's Benefit/Allowance, or Prisoners Wife's Allowance for at least 12 months.
  • be in receipt of Illness Benefit for three years or more.

In addition to those listed above the following may also be considered for participation in the scheme;

  • Recipients of Farm Assist provided that the self-employment is now in relation to the holding and not the continuation of an existing operation.
  • Casual signers require 312 days on the Live Register and an underlying entitlement to Jobseekers allowance to qualify.

2.2 Other Qualifying Periods

  1. Periods spent on full-time FÁS/Fáilte Ireland training courses, Community Employment, Social Economy Programme, Rural Social Scheme, FIT, FÁS Job Initiative, National Internship, WPP, TÚS and BTEA/VTOS, count towards the qualifying period provided they are preceded by a qualifying payment.
  2. Time spent on the Community Services Programme can qualify as a period of Unemployment. However 50% of the qualifying period must have been spent in receipt of a qualifying Social Welfare Payment. Time spent on the CSP must be preceded by a qualifying payment.
  3. Periods spent in receipt of Supplementary Welfare Allowance and Direct Provision count towards the qualifying period provided the applicant establishes an entitlement to a relevant SW payment prior to commencing on the scheme.
  4. Periods spent as Qualified Adult for (i), (ii) and (iii) above count towards qualifying period once person has established entitlement to a qualifying social welfare payment.
  5. The qualifying period for Back to Work Enterprise Allowance for ex prisoners is 12 months. Periods spent in prison in the State can be taken as, or count towards the qualifying period once an underlying entitlement to Jobseeker's Allowance is established.
  6. Periods spent on Live Registers in the E.U. can be accepted as periods of unemployment provided the applicant has signed the Live Register here for at least 13 weeks since their return. (Periods spent on the Revenue 'Job Assist' are NOT considered as periods of unemployment).

2.3 Qualifying from a combination of payments.

From 1 March 2006, in cases where a combination of payments are required to make up the qualifying period it is no longer a condition to have at least half of the period in receipt of JA/JB. All qualifying payments will be treated in the same regard.

For example:
BTWEA applicant in receipt of JA for 4 weeks with a combination of IB and OPFP making up the balance of the 1 years required will now qualify for BTWEA. (Under the previous conditions the applicant would not have qualified as half of the qualifying period was not JA/JB).

Illness Payments may be restored to a person who subsequently wishes to revert during the lifespan of BTWEA provided they satisfy the medical condition pertaining to the illness related scheme which qualified the person for Back to Work Enterprise Allowance .

2.4 Extending the period in receipt of Social Welfare in order to satisfy the qualifying period.

From 1 March 2006 the following consideration will be given to persons who do not have the required period in receipt of a qualifying social welfare payment:

  • Qualifying from JA
    1 out of 2 years in receipt of a qualifying social welfare payment.
  • Qualifying from JB
    2 out of 3 years in receipt of a qualifying social welfare payment.
    1 out of 2 years if entitlement to JA established.
  • Qualifying from IB
    3 out of 5 years in receipt of a qualifying social welfare payment.
  • Qualifying from all other payments
    1 out of 2 years in receipt of a qualifying payment

2.5 Qualified Adult - Spousal Swap

Where a person is partaking in the BTWA scheme and they cease employment or self-employment before exhausting entitlement their qualified adult may avail of entitlement under the scheme for the duration remaining on the original claim.

For the purpose of these arrangements, known as a spousal swap, an adult dependant is a spouse in respect of whom a qualified adult allowance is payable. 'Spouse' includes each of a married couple who are living together or a man and a woman who are not married to each other but are cohabiting as husband and wife.

Qualified adults whose spouse/partner is eligible i.e. satisfies the qualifying conditions, the customer and their spouse/partner may exchange places as follows:

  1. the Qualified Adult does not need to be in receipt of a Social Welfare Payment in their own right to become eligible
  2. for the purposes of spousal swap: to be considered a Qualified Adult the person has to be an adult dependant on a qualifying payment for the specified period, for example:

    1. i. JA a qualified adult for one year
    2. ii. JB a qualified adult for two years
    3. iii. Illness Benefit a qualified adult for three years
    4. iv. Disability Allowance, Blind Person's Pension, Carer's Allowance (On ceasing caring duties), Farm Assist, Invalidity Pension, Incapacity Supplement, Pre-Retirement Allowance, Widows/Widowers Non-Contributory Pension, Deserted Wife's Benefit/Allowance and Prisoners Wife's Allowance a qualified adult for as least 12 months
  3. when the Qualified Adult commences BTWEA, a separate claim should be set up in his/her name. S/he can claim an increase for the existing JA recipient, who should sign for credits instead. There should be no loss suffered by the couple when entering this arrangement.

It is of vital importance that the existing recipient is made aware of the importance of credits in keeping his/her record up to date. It is usual that this person will have the principal social insurance record in the household on which future pension entitlements will be based. The normal rules for entitlement to credits will apply to persons whose partner is on BTWEA.

In the case of a spousal swap - if the original owner of the qualifying social welfare payment decides to claim another Social Welfare payment during the lifespan of the spousal swap, the BTWEA claim MUST CEASE as BTWEA cannot be claimed concurrently with another SW payment.

2.6 Disqualification:

  • Persons who leave the country are no longer entitled to the Allowance.
  • Members of the Houses of the Oireachtas are not eligible to participate on the scheme.

2.7 Absence from the State

In cases where BTWEA applicants whose self employment ventures require that they spend time out of the country, it is a requirement that the intention/need to be absent from the state is highlighted on business plan/application and if/when approved is noted on the claim.

In cases where it comes to the Department's attention that a client is out of the State without prior approval the claim shall be suspended initially and depending on the circumstances terminated and overpayments raised where necessary. The JA/JB holiday rule states 'a person may receive JB or JA for two weeks holidays (i.e. 12 days excluding Sundays) in any calendar year. These holidays may be taken abroad'. Any trip in excess of the holiday rule may result in suspension of a claim and payments for the periods involved.

In all instances absences from the State must be notified to a case officer. In the main, a reasonable business trip shall be classified as being in the region of 2/3days. Any trips in excess of this will be at the discretion of a Facilitator or the local Integrated Development Company to approve and strong supporting evidence should be available to confirm the nature of the trip abroad.

Participation in the BTWEA can be periodically reviewed, to confirm that the conditions of entitlement continue to be satisfied. A review may also be initiated on receipt of notification of any change in circumstances which may affect entitlement. This may include a request for proof of residency in the state.

2.8 Resumptions

Persons are generally allowed to resume the BTWEA once. In exceptional cases and with due explanation, an applicant may be allowed resume the BTWEA for a second time provided there is less than five years since the claim was withdrawn. (Participation in seasonal type activities should NOT be allowed - see below).

In this way, persons simply resume where they left off. Once entitlement to the allowance has been previously established it is not necessary to receive a qualifying payment for a specified period. However, it is necessary to be in receipt of a Social Welfare payment immediately prior to commencing employment. The rate of payment is based on first qualifying Social Welfare claim.

2.9 Nature of Employment:

Seasonal, temporary or part time work is not acceptable for the Back to Work Enterprise Allowance.

Back to Work Enterprise Allowance participants can avail of Employment Grants from a County Enterprise Board (CEB) or LEADER Employment Grants and receive the BTWEA.
A person taking up self-employment under the BTWEA scheme must not displace other people in the same business.

2.10 Rates Structure:

The claimant is paid a portion of their previous social welfare entitlement - 100% in Year 1 and 75% in Year 2

Claimants coming from JA/JB are paid the appropriate portion of their latest JA/JB entitlement. These rates are set and do not vary, except where a qualified adult makes a claim for Social Welfare in his/her own right. ( See also under Maintenance / Review).

A person on Jobseekers' Benefit may qualify after 12 months provided they have an underlying entitlement to Jobseekers' Allowance. Where a person establishes an underlying JA entitlement and JB is exhausted, the BTWEA payment will be based on the appropriate Jobseekers allowance rate. Waiting days do not count as time spent on a qualifying payment for the purposes of qualifying for BTWEA. The 12 months period (312 paid days) on JB is the qualifying period in these instances and does not serve the purpose of establishing the rate at which future BTWEA should be based.

Every applicant for JB waits three days from the day they make their claim for their JB to go into payment. They are then entitled to a maximum of 312 days payment. While waiting days may count for time on the live register, these three days are not to be used when establishing entitlement to BTWEA.

OPFP's who have been in receipt of ½ Rate JB only receive 100% & 75% of their OPFP. (The ½ Rate JB ceases)

BTWEA applicants previously in receipt of Maximum Pay JA (i.e. half the family rate) should receive 100% of their Max. Pay amount. The JA recipient should immediately be subject to a Means Review. (Every reasonable effort should be made to have the claimants merge their JA claims prior to BTWEA commencing).

2.11 Extra Benefits:

Participants in the scheme may retain any secondary benefits they were in receipt of prior to participation such as Fuel Allowance, Medical Card provided they satisfy a means test.

Back to School Clothing & Footwear allowance, Diet Supplement, Rent Supplement or Mortgage Interest Supplement under the Supplementary Welfare Allowance Scheme.

Any increase in income may affect your Rent or Mortgage Interest Supplement. Income in excess of the first €75.00 or weekly earnings you or your spouse or partner get is assessable for Rent or Mortgage Interest Supplement. (Any amount in excess of the €75.00 disregard is assessed at 75%).

Contact your local Department of Social Protection Office administering Supplementary Welfare Allowance to see how your Rent or Mortgage Interest Supplement may be affected.

From the Department of Social Welfare:

  • Fuel Allowance (incl. SMOG)

From the Health Service Executive:

  • Medical Card (no income limit)
  • Back To School Clothing & Footwear Allowance
  • Diet Supplement
  • Rent/Mortgage Interest Supplement (tapering out over four years: 75%->50%->25%->25%)

Where a person moves from one programme to another, for example from Community Employment to Back-to-Work Enterprise Allowance, the four-year cycle dates from the commencement of the first programme, Community Employment in this example.

From the Local Authority:

  • Differential Rents

Note:

• FREE Schemes ARE NOT regarded as Secondary Benefits.

• Former recipients of Invalidity Pension and Disability Allowance RETAIN their Free Schemes (e.g. Free Travel, Free TV Licence, and Free Electricity Allowance).

• Former recipients of Carers Allowance DO NOT RETAIN these Free Schemes.

Half Rate Carers Allowance cannot be claimed with BTWEA but a Qualified Adult may have an entitlement.

Back to Work Enterprise Allowance recipients may also be eligible for;

  • Technical Assistance & Training Grants (See Appendix 2)

The Back to Work Enterprise Allowance is not subject to tax or PRSI. However, the income from self-employment may be subject to Tax/PRSI.


PART 3: CLAIMS AND PROCEDURES

3.1 Investigation of self employment applications:

Those taking up self-employment must first have their self-employment project approved.

In Partnership areas this will be done by the Partnership Company. In non-Partnership areas this will be done by the Departement's Case Officer.

Approval normally involves an interview with the applicant to assess the viability of the proposed project, to provide advice on funding or on 'Start Your Own Business' courses etc. The Project may be recommended for approval if it is deemed likely to succeed and will not displace existing similar business'

3.2 Claims

Following approval as mentioned above applications are treated thus:

Applications from those receiving Jobseeker's Allowance, Jobseeker's Benefit, Farm Assist and Pre-Retirement Allowance are dealt with by the Department's Local Offices.

All other applications should be sent directly to BTWA HQ Section, Carrick-on-Shannon, Co Leitrim.

In the case of restarts for JA/JB qualifiers -
BTWA section will deal with if they have already dealt with the original claim

Applications should be submitted 14 days before the self-employment commences, in order to be approved.

  • However, applications MAY be accepted up to ONE month after work commencing, provided that the claimant has signed off at the appropriate time. This is particularly appropriate where there is corroborating evidence that the claimant expressed an interest in the BTWEA while signing off.
  • However, lack of knowledge of the scheme is not, in itself, an acceptable explanation for a late claim. The BTWEA must have been instrumental in the claimant deciding to leave the Live Register. The best evidence of this is that they apply on commencement of work or within one month thereof. As places on the scheme are limited it is important that the Back to Work Allowance is proven to be instrumental in the applicants' return to the workforce.

3.3 Decisions:

Claims are decided by Clerical Officers at a Local Office level for Live Register cases. All other applications are dealt with by Back to Work HQ Section.

BTWEA Awards Processing:

  • Claim is checked to ensure that all necessary details have been provided (e.g. bank details etc.) Incomplete forms must be returned to the applicant.
  • Claim is checked for qualifying conditions.
  • SW details are checked on ISTS/Penlive.

Note: Applications must be accompanied by:

A. Copy of Business Plan and 1 year Financial Projection

B. Documentary proof of registration with the Revenue Commissioners.

  • If all is in order a Decision Sheet is completed and the applicant is notified.
  • A review date of 12 months hence is entered.

A claimant who has previously participated in the BTWA/BTWEA scheme may re-qualify for BTWEA (2 year scheme since 1/05/2009) after a period of five years has elapsed provided they satisfy the new qualification criteria for the scheme. The person is not required to have exhausted full entitlement on their previous BTW claim to be considered.

Under NO circumstances can a person qualify for more than two years (as a self-employed person) on any one claim or a combination of claims.

Back to Work Allowance is not payable in respect of a period for which a Social Welfare payment which is specified in Section 209 of the Social Welfare (Consolidation) Act, 1993 (as amended) is made.

Back to Work Allowance is not payable to a person to whom an allowance is in payment in respect of a course of education, training, development or employment.

Periods spent on BTWEA are acceptable as periods of unemployment for the purposes of qualifying for Back to Education or CE Schemes.

Where a person is in receipt of Back to Work Enterprise Allowance and subsequently becomes entitled to the Survivor Contributory pension, the Back to Work payment continues at the single rate. No increase for a qualified child can be included.

3.4 Requests for Review of Entitlement:

As this is a non-statutory scheme there is no right of appeal to an Appeals Officer appointed under the Social Welfare Acts. Form SWAO1 should NOT be used for this purpose.

On receipt of new or additional information, an Officer of the Department may make a revised decision.

Where a person is not satisfied with the decision s/he may request a review of entitlement. The result will be determined by an Officer of a higher grade.

3.5 Payment:

People participating on the scheme are paid via weekly Electronic Fund Transfer (EFT) or Electronic Information Transfer (EIT).

3.6 Maintenance/Review

The rate in payment is adjusted after 12 months from 100% to 75%. Claimants are entitled to the appropriate Budget Increases. Participation in the Back to Work Enterprise Allowance scheme may be periodically reviewed, to confirm that the conditions of entitlement continue to be satisfied. A review may also be initiated on receipt of notification of any change in circumstances which may affect entitlement or the appropriate rate of payment.

Adjustments can be made, when appropriate, in respect of Increases / Decreases for a Qualified Adult and additional Child Dependents ( except in the case of claims based on a previous entitlement to One-Parent Family Payment or Carers Allowance). In these cases a Qualified Adult Dependent increase is not payable since it would not have been payable on the previous and underlying entitlement).

Once entitlement to BTWEA is established, a qualified adult is free to take up employment without affecting the BTWEA. However, a qualified adult claiming Social Welfare in his/her own right or taking up (FAS) Community Employment will result in the BTWEA payment being reduced accordingly. Where a spouse claims SW in their own right, no MAX. PAY shall apply and both claimants should receive their full personal entitlements (subject to a person claiming JA satisfying the Means conditions).

If the self-employment ceases, BTWEA claimants are free to re-apply for their previous Social Welfare payment at any time. When a claimant changes address the BTWEA file should be transferred to the new SWLO (if appropriate) for payment.

If a BTWEA recipient claims any other Social Welfare type payment, except the Survivors Contributory Pension (SCP), the BTWEA claim should be closed immediately. However, if the Survivor's Contributory Pension is awarded, Back to Work will continue at the single rate. No increase for a qualified child can be included.

Where a BTWEA recipient ceases to claim BTWEA, the claim should not be purged from ISTS for at least five years.

3.7 Continuing Payment after a Death in the Family

If a person dies while receiving Back to Work Enterprise Allowance the payment can continue to be paid to the qualified adult for 6 weeks. Payment may also continue for 6 weeks after the death of a qualified adult or qualified child.

3.8 Credits:

Since the person is in self-employment during the period on Back to Work Enterprise Allowance, PRSI is payable at the appropriate (S) rate and credits are not awarded.
(However, Credits will be awarded to former recipients of Invalidity Pension for the duration of their BTWEA claim only).


Appendix 1

Budget Changes since 1997

In 1997, 1,000 places were provided on the scheme for people with disabilities (Disability Allowance and Blind Persons Pension).

In 1999, the Scheme was extended to those in receipt of Carers Allowance.

In 2000, the Scheme was extended to those in receipt of Invalidity Pension, Incapacity Supplement and Pre Retirement Allowance.

From 1 July 2001 the scheme was extended, on a pilot basis (200 places) to those in receipt of Illness Benefit for 5 years or more. From April 2002 the qualifying period was reduced to 3 years.

In April 2002, the scheme was extended to persons in receipt of Widows/Widowers Non Contributory, Pension Deserted Wife's Benefit/Allowance, and Prisoners Wife's Allowance.

Provision was also made in 2001 to introduce a pilot scheme in - 3 Health Board areas to enable Long Term Unemployed return to work under the "Special Housing Scheme for the Elderly" and also their Unemployment Assistance @ 100% for two years. On completion the participant would have the option to avail of the Back to Work Allowance Scheme.

From January 2003, the qualifying period for Jobseeker's Benefit/Allowance recipients was increased from 12 months to 5 years.

From 1 March 2004, the qualifying period for Jobseeker's Benefit/Allowance recipients was reduced to 3 years. This only applies to persons taking up self employment. The qualifying period for JB/JA recipients taking up work as an employee remains at 5 years.

From 1 March 2006, the qualifying period for Jobseeker's Benefit/Allowance recipients was reduced from 3 years to 2 years. This also applies to persons over 50 years of age in receipt of Jobseeker's Benefit/Allowance. Other qualifying payments are not affected.

Periods spent in receipt of Supplementary Welfare Allowance and Direct Provision will count towards the qualifying period for Back to Work Allowance/Back to Work Enterprise Allowance provided the applicant establishes an entitlement to a relevant SW payment prior to commencing on the scheme.

From 1 March 2007, entitlement extended to those who are in receipt of Jobseeker's Allowance for 2 years or more at a weekly rate of less than €50.79 (Single) or €78.72 (Couple).

From 1 May 2009, the qualifying period for Jobseeker's Benefit/Allowance recipients was reduced from 2 years to 1 year provided there is an underlying entitlement to JA. The duration payable for BTWEA was reduced from 4 years to 2 years, People who had previously participated in the BTWEA scheme and exhausted entitlement may be eligible to participate a second time after a period of five years has elapsed. The back to work allowance (employee strand) was closed to new applications from 1 May 2009. A new Short-term Enterprise allowance was introduced from that date and is linked to JB rate and duration


Appendix 2

TECHNICAL ASSISTANCE & TRAINING FUND (TAT)

Introduced in 1995, this initiative was designed to help Back to Work (BTW) participants with costs such as:

  • Training on starting your own business;
  • Training on keeping proper accounts and book keeping;
  • Preparing business plans and submissions for funding, financial projections etc;
  • Business Mentoring;
  • Advertising and Marketing Aids;
  • Safe Pass;
  • Literacy & Computer training;
  • Driving lessons - car and HGV – To a maximum of €350 (Such lessons should normally be related to preparing for driving test).
  • Manual handling
  • Machinery tickets
  • Skills training - short term training courses that may lead to employment Interview Techniques & CV preparation.
  • Small items of business equipment e.g. fax machines, computers, other equipment necessary to run a business.
  • Public Liability Insurance costs associated with starting up a business.

NOTE: Public Liability Insurance is the only type of insurance covered under the TAT scheme. All other types, including vehicle insurance, should not be covered.

Last modified:09/08/2013
 

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