Introduction
The Back to Work Enterprise Allowance (BTWEA) scheme encourages people
getting certain social welfare payments to
become self-employed. If you take part in the BTWEA scheme you can keep a
percentage of your social welfare payment for up to 2 years. BTWEA is a payment
made by the Department of Employment Affairs and Social Protection (DEASP) to
people aged under 66.
There is also a separate Back to Work Scheme called the Short-Term Enterprise
Allowance, which supports people on Jobseeker's Benefit to start their own
business.
Rules
You can qualify for a Back to Work Enterprise Allowance (BTWEA) if you
are:
- Setting up as self-employed in a business that has been approved in
advance in writing by a DEASP Case Officer or Local Development Company
(see 'How to apply' below)
and
- Getting one of the qualifying payments listed below for at least 9 months
(234 days)
or
- Combination of OFP/JST/JA for 9 months (234 days)
*Jobseeker's Benefit and underlying entitlement to JA
If you are on Jobseeker's Benefit, you need to have an underlying
entitlement to Jobseeker's Allowance in order to qualify for BTWEA. Having an
underlying entitlement to Jobseeker's Allowance means that you would pass the
means test and other criteria for Jobseeker's Allowance. Signing on for unemployment
credits following your Jobseeker's Benefit does not count towards the
qualifying period for BTWEA.
Other ways of qualifying for BTWEA
You may also be considered for the BTWEA if you are a qualified
adult of a person who is already getting the BTWEA.
You may qualify if the person who is getting the BTWEA stops their
self-employment before exhausting their entitlement due to certain
circumstances. Valid circumstances would include a long-term illness or injury
which prevents the original claimant from working, or the illness of an
immediate family member which requires them to become a full-time carer. If you
are the qualified adult of a BTWEA claimant who stops their self-employment to
take up other employment, this is not a valid circumstance to qualify you for
BTWEA.
If you qualify for BTWEA in this way, you may avail of the scheme for the
time remaining on the original claim. This involves the original claimant
transferring his or her entitlements to you as their spouse, civil partner or
cohabitant. (In other words, you become self-employed and the original claimant
becomes your qualified adult on the BTWEA). If the original claimant is
entitled to credits, he or she can continue to claim them. However BTWEA cannot
be paid at the same time as another social welfare payment so if the original
claimant (now a qualified adult) decides to claim another payment you must stop
claiming BTWEA.
If you have been recently released from prison, you may qualify for BTWEA.
Time spent in prison can count towards the qualifying period for the BTWEA if
you establish an entitlement to a relevant social welfare payment before
becoming self-employed.
Qualifying periods for BTWEA
Periods of time spent on full-time Fáilte Ireland training courses,
Community Employment, Rural Social Scheme, JobBridge, Work Placement Programme,
Tús, BTEA and VTOS schemes and certain
Education and Training Board (ETB) training courses are accepted as
qualifying periods provided you were entitled to a qualifying payment before
starting on the study or training.
Time spent on Supplementary Welfare Allowance or in direct provision for
asylum seekers can count towards the qualifying period for BTWEA, as long as
you establish an entitlement to one of the qualifying payments listed above
before starting the BTWEA.
If you have previously participated in the BTWEA scheme and used up your
entitlement, you can participate a second time after at least 5 years.
Find out more about the qualifying
periods for Back to Work 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).
You can only get the ESG if you have been approved for the BTWEA. 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 can pay a
total of €2,500 in any 24-month period. You must be able to make a matching
contribution of at least 10% 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 training or mentoring (this can be offered free or at a
reduced rate by Local Enterprise Officers (LEOs) or Local Development
Companies) |
Up to €500 |
10% |
| 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 €500 |
10% |
| 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 |
€2,500 |
|
Note that you do not have an automatic right to any of these amounts. The
DEASP'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 (airline tickets, business trips, foreign travel,
conferences)
- Insurance (except public liability)
- Personal clothing and uniforms (except protective clothing)
- Professional development programmes and membership fees arranged by
professional and regulatory bodies
- Purchase of any type of vehicle
- Renovations to premises (not owned by the jobseeker)
- Stock-in-trade
- Training or education other than that specified
- Utility costs (electricity, water supply, communications such as
telephone and broadband), connection or supply and local authority
rates
More information is available about becoming
self-employed.
Employment grants
Employment grants from a Local Enterprise Office (LEO) or a Local
Development Company do not affect your entitlement to the BTWEA.
Extra benefits
You can keep your extra (or secondary) benefits for as long as you are
getting the BTWEA. Extra benefits include:
However, if you are getting Rent Supplement, you can only keep it if you are
deemed eligible for the Rental
Accommodation Scheme. Your Rent Supplement may be affected if your earnings
go up while you are on the BTWEA scheme. You should check with the DEASP's
representative to see how your Rent Supplement may be affected by your
participation in the BTWEA scheme.
When you are getting the BTWEA
The Back to Work Enterprise Allowance is paid directly into your bank or
building society account each week. The allowance cannot be paid
into a mortgage account.
You do not have to pay tax, PRSI or Universal Social
Charge on the Back to Work Enterprise Allowance but you may have to
pay tax, PRSI and Universal Social Charge on any income you get from
self-employment.
You can claim Start
Your Own Business Relief if you are getting the Back to Work Enterprise
Allowance (BTWEA). This provides a 2-year exemption from income tax (up to a
maximum of €40,000 per year) for people who have been unemployed for at least
12 months before starting their own business. To qualify, you must start the
business by 31 December 2018.
You must contact the DEASP immediately if your self-employment ends or you
take up employment.
Rates
If you qualify for the Back to Work Enterprise Allowance
you can keep the following portion of your social welfare payment, including
increases for a qualified adult and qualified children, for a maximum of 2
years:
- 100% for the 1st year
- 75% for the 2nd year
Change of circumstances
If your circumstances change, your rate of payment for a qualified adult or
additional qualified children may be increased or decreased, depending on your
situation. However, if your BTWEA claim is based on a previous entitlement to
One-Parent Family Payment or Carer's Allowance, you cannot claim an increase
for a qualified adult as this would not have been payable on your underlying
entitlement.
If your qualified adult finds employment, this does not affect your BTWEA.
However, if your qualified adult claims another social welfare payment in their
own right, your BTWEA payment will be reduced accordingly.
How to apply
To apply for the Back to Work Enterprise Allowance, complete application form BTW 2.
You should return form BTW 2 to the Case Officer in your Intreo Centre or
Social Welfare Branch Office.
The Case Officer will look at your business proposal and may discuss certain
aspects of it with you. You may then be referred to your Local Development
Company. You must not take up self-employment until you have
received written approval from the DEASP.
If you are accepted on to the Back to Work Enterprise Allowance, you must register
as self-employed with the Revenue Commissioners.
Reviewing a decision
The BTWEA is an administrative scheme. This means that you cannot appeal a
decision to the Social Welfare Appeals Office. However, you can ask the DEASP
to review your application if you feel that you have been wrongly refused the
allowance.