Back to Work Enterprise Allowance


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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:

  1. 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

  2. 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.

Where to apply

You can apply to the Case Officer in your Intreo Centre or Social Welfare Branch Office.

Last modified:09/10/2017
 

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