# Sole Trader Closing - Social Welfare Entitlements



## PDCAT (1 Dec 2010)

Hi Folks

My Wife is a sole trader running a small business for the past six years. At the moment, she is finding it very tough and dreading the next couple of years. She is ok at present, but if things get any worse, she fears she may have to close.

At present, she is paying her Rent, Rates, Suppliers, Bank Loan, Utilities, Wages - all bills she owes. Only issue is she hasnt been able to pay herself a wage in a couple of months. 

Looking to the future - if she has to close. Has she any entitlements to Social Welfare Benefit or Assistance. I have heard in the past that people who run their own business's and close are not entitled to any Social Welfare.

Don't know, how true this is. Can somebody please explain, if the worse happens, would she be entitled to any Social Welfare.

Thanks


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## contemporary (2 Dec 2010)

PRSI Rate S gives you sod all 

http://www.welfare.ie/EN/Publications/sw19/Pages/sw19_sect1.aspx

*Class S benefits*



Widow’s or Widower’s (Contributory) Pension
Guardian’s Payment (Contributory)
State Pension (Contributory)
Maternity Benefit
Adoptive Benefit
Bereavement Grant.


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## DB74 (2 Dec 2010)

She may be entitled to Jobseekers Allowance but it is means-tested


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## PDCAT (2 Dec 2010)

Hi Guys

Thanks for the replies.

So, it looks like, she is entitled to nothing. She has to continue working in her business for no wages or alternatively close and sit at home and get no money.

Does anyone know, what is there rationale for not paying someone whose business has closed down any Social Welfare. What would she be expected to live on.

Thanks again


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## Mrs Vimes (2 Dec 2010)

At the moment your wife can decide whether to continue working for no wages in the hope that things will pick up or close up shop and cut her losses.

Either way, you will be the one supporting her financially.

If you are not in a position to support her financially then she will qualify for Jobseeker's Allowance regardless of whether she closes the business or not.

You will need to check social welfare's website (or keyposts here) to see whether it is considered that you are able to support her which is determined by your incomea and family size.

Sybil


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## Fullback (2 Dec 2010)

PDCAT said:


> Does anyone know, what is there rationale for not paying someone whose business has closed down any Social Welfare.


 
Your wife can apply for jobseekers allowance on more or less the same basis as everyone else. It all depends on household income. If household income is over a certain limit she won't qualify, and if its below she will. It's more or less the same limit for everyone, business owner or not.

She unfortunately doesn't have an entitlement to jobseekers benefit because class S contributions don't cover this. The rationale is that the total PRSI contribution for an employee is made up of their own contribution and their employers. In the case of a sole trader there is no "employers contribution", just the personal contribution. So typically, the overall contribution is much less - hence, less benefits.

I don't honestly know why sole-traders are not given the option to make employer contributions on top of their personal contribution and thereby be insured for jobseeker's benefit.

It would also be fairer if jobseekers benefit was made available on a proportionate basis to the contributions made - at least it would be something.  

If you are employed, and you have children under 18 (or up to 22 and in full-time education) you might want to look into Family Income Supplement. http://www.citizensinformation.ie/e...es_and_children/family_income_supplement.html It can often be worth more than a jobseekers payment.


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## jpd (3 Dec 2010)

PDCAT said:


> Hi Guys
> 
> Thanks for the replies.
> 
> ...



One of the "advantages" of being a sole trader is that the PRSI contributions are less than the PRSI contributions for an employee. But this "advantage" turns into a disadvantage if you need to claim Social Welfare.


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## PDCAT (3 Dec 2010)

She has always paid the PRSI contributions for her own employee's from the business, rather than take it out of their wages.

She has only ever had two/three workers at any one time but she has always paid the employee prsi contributions herself.
Think quiet a lot of Sole Traders with very small number of staff do it.


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## jpd (3 Dec 2010)

I was talking about her own PRSI contributions, not her employees.


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## senni (4 Dec 2010)

All the income coming into the household will be taken into consideration if she applies for Job Seekers Allowance. If she does not qualify for this , have you thought about FIS.... Family Income Supplement..This may supplemenmt your income allowing her to close the business.

Good Luck in these hard times ...


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## Welfarite (4 Dec 2010)

PDCAT said:


> Hi Guys
> 
> Thanks for the replies.
> 
> ...


 
You should post this in the redundancy and unemployment forum as that is really what you are asking about, not business. You'll get more replies. There's a keypost at the top of that forum that you should read first too. The bottom line is that self-employed CAN claim Jobseeker's Allowance provided they satisy the means-test.


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## PDCAT (6 Dec 2010)

Thanks Guys for all the excellent replies on this subject.

Basically, what i was trying to do was gain as much information as i could, in case of worst case scenario happening. Lets hope it won't come to that.

What should help her is that the Bank Loan she has been paying over the past 6/7 years since she opened her business is paid off next month and this accounts for a signicant portion of her costs. I would say 15 - 20% of her costs. So hoping that if things get worse, by reducing her outgoings, it may help her get by.

Don't believe she would be entitled to anything from Jobseekers allowance though as i am in full time employment, we have significant savings due a redundancy i recieved 3 years ago and no mortgage. So plenty of people worse off than ourselves. However, just trying to ensure that i understand where she stands in case worst happens.

Jpd - Understood you were talking about her own contributions earlier - i believe she only pays 253 euro per year for her own contributions. i may be wrong.

Thanks again guys for all your help. Much Appreicated.


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