Unseen disaster concerns with new business set up

Hi all I am thinking of setting up a new business as a sole trader, one thing that does worry me and my wife is that in the case of it failing you can not claim any social welfare or get any help.
Is this due to lower PRSI payments? If so can you top up your payments to overcome this?
Is there any other way of protecting yourself in the event of disaster or is the only path to go limited?

Self-employed PRSI Class S is only for pension. Owner (prorietory) directors also pay the same PRSI Class S so nothing extra there. You cannot top them up.

Graham_07 said:

Self-employed PRSI Class S is only for pension. Owner (prorietory) directors also pay the same PRSI Class S so nothing extra there. You cannot top them up.

Click to expand...

You can top up your PRSI payments, but this will have no effect on unemployment benefit. The voluntary top ups just cover a couple of benefits including state pension. You could take out a permanent health insurance policy (PHI) which is an insurance policy which kicks in if you become unable to work for a protracted period of time due to ill health. They're quite pricey though. No protection for the business just being unsuccessful though, only if you have problems with ill health.

I think you should consider taking out payment protection cover, I dont think it is any more than you would be paying if you were considering topping up your PRSI contributions.

Perhaps you should consider setting up a company so that in the unfortunate event that things do not work out that you at least have limited liability from creditors etc. But the benefits of this protection will depend on the type of industry you are hoping to work in.

On a positive note as things stand at the moment if the company is a success and you decide to sell/retire there can be tax advantages of having a company!

You have lots to consider so it might be worth talking to an accountant before you go ahead with anything rather than saying "if only" 5 years down the line.

I should probably add to my last post re PHI policies - the premiums are tax deductible at least so that does help with the cost. Friends First were the only company doing these for a while - not sure if that's still the case, but might be worth giving them or a broker a call to get a quote if it's something that interests you.

Thank you for the replies, I did consider Insurance I'll give my broker a call

http://www.citizensinformation.ie/c...mployed-people/self-employed-and-unemployment

Good read on the subject here, it says that if you are not entitled to Jobseekers Benefit due to being self employed you may be entitled to Jobseekers Allowance which is means tested.

I would check your stamp situation, If you have been a PAYE employee and have enough stamps should your business fail say in 6 months (god forbid) you may be entitled to job seekers benefit until 2011 based on your PAYE employment, worth taking a look at and getting clarification