Are self employed people who become unemployed discriminated against?

[Ah Well]

I note quite a few threads discussing Social Welfare payments but this one is a little different.

In the normal sense, PAYE Workers who become unemployed will be entitled to JA or JB based on sufficient PRSI Contributions having been made usually Class A.

Not so in the case of a self employed person who often pays Class S which, granted, means lower PRSI Contributions being made, but who still is obliged nevertheless to make PRSI Contribs in their annual Income Tax Return. This apparently entitles such self employed people to the Death Grant and one or two more mundane benefits - maybe the Old Age Pension but I'm not sure they qualify auto for that or not.

So, particularly in these times, it is assumed a lot of self employed people will see the wrong side and become unemployed, presumably with families to support. I assume if they go to the Social Welfare Office they will be told sorry, oh you're Class S you don't get JA or JB. So in that event I think they have to apply to the HSE and the local Community Welfare Officer if financially they are in trouble and hope for assistance based on the whims and decision of such entity (or the Appeals Officer if needs be). I don't think they can expect automatic payments to be given to them unlike Social Welfare JA or JB which is an automatic entitlement if sufficient Contribs are made.

Doesn't seem quite right to me that you can have people coming in here from Poland, or the UK or anywhere else in the World happily claiming the Dole and our own self employed Irish people who may have worked thus for many years and honestly paid taxes not having the same luxury.

And I'm not going on about self employed people here who do nixers or avoid tax in whatever manner. I'm talking about people who honestly and diligently have paid their taxes over the years and there are many of those out there.

And before people start on about self employed people having it easy over the years, making money and paying less than the hard pressed PAYE Workers, the following points are made;

1. Not every self employed person is rolling in cash. Many have struggled to make it over the years even through the alleged "celtic tiger" period.

2. In addition to paying Income Tax due for the year end, there is also the obligation to pay Preliminary Income Tax for the following year, based on the previous years Income or a close estimate to same, with the possibility of being penalised if too low a preliminary tax amount is paid. This would often lead to people having to borrow to pay the preliminary Income Tax.

3. Such people have numerous additional outlays and expenses not the worry of those generally employed by a Company, such as Insurance costs, Accountants fees, often Legal fees and an absolute multitude of outlays involved in running a Business. And that's before a dime is called one's own to take home to feed the folks.

[yehbut_nobut]

Good point, apart from the bit about people coming from abroad to claim, because they can't.

But it's true, self employed people do not qualify for Jobseekers benefit (because thats based on Class A PRSI contributions), and AFAIK the means test for Jobseekers Allowance is based on the income from the previous tax year - which is not much use if your income last year was reasonably ok but you've no income now or for the forseeable future.

Often, as part of proving they've no income to live on, and to claim from a CWO, they have to deregister as self employed with the Tax office. But of course, this means they're not in a position to take up work should it come along, because the have to re-register again!


The situation does seem unfair - Changing the JSA means test rules would make things a bit easier.

[Ah Well]

Good point, apart from the bit about people coming from abroad to claim, because they can't.

But it's true, self employed people do not qualify for Jobseekers benefit (because thats based on Class A PRSI contributions), and AFAIK the means test for Jobseekers Allowance is based on the income from the previous tax year - which is not much use if your income last year was reasonably ok but you've no income now or for the forseeable future.

Often, as part of proving they've no income to live on, and to claim from a CWO, they have to deregister as self employed with the Tax office. But of course, this means they're not in a position to take up work should it come along, because the have to re-register again!


The situation does seem unfair - Changing the JSA means test rules would make things a bit easier.

I agree .... the situation most certainly does seem unfair ... and that might prove to be more so the case with the inevitable onslaught of unemployed formerly self employed people these present times will bring

[odie1kanobe]

Company breaking the law as if she working exclusively for them then she is a defacto employee and accordingly Revenue should have a look and recover all the tax that the employer has dodged.

If she is facing unemployment then time to chat to the revenue.

[markeys]

Definitely unfair. Can't see any reason for this rule nad its certainly a discouragement to anyone thinking of setting up in business themselves - which is exactly what the government should be trying to encourage.

[Ah Well]

I am aware of a person who has worked exclusively for a single company for the past ten years. She is self-employed but the company has refused to employ her directly despite several requests. She now faces unemployment with all the attendant problems mentioned. That's hardly fair. Some employers get away with murder.

This might be of some limited help D.Harry:

The majority of employment protection legislation in Ireland applies to employees only and the tax and social insurance system will treat you very differently depending on whether you are employed or self-employed.

There is no definition of ‘employed’ or ‘self-employed’ in employment law. The decision on your employment status is reached by looking at what you do, how you do it and the terms and conditions under you were engaged. The important point is that you (or the person you do work for) don't make the final decision. Instead, the Revenue Commissioners or the Department of Social and Family Affairs or perhaps a court or tribunal will make that decision applying standard tests and based on the real nature of your working relationship. Examples of such tests are: whether you control the work, who supplies the materials and whether you get holiday pay.

So it could be that in law you are considered an employee, even though you have agreed with another person that you will work for him or her as a self-employed person.

In most cases, it is clear whether a person is an employee or not. However if this is a problem for you, then it is best to get more detailed legal advice or guidance from your local tax office or the Scope Section of the Department of Social and Family Affairs

[Ah Well]

Definitely unfair. Can't see any reason for this rule nad its certainly a discouragement to anyone thinking of setting up in business themselves - which is exactly what the government should be trying to encourage.

It most certainly is ... considering an unemployed self-employed person will be told to fe.ck off at the Social Welfare Office and meanwhile the guy next door living on rent allowance tottles down to collect his Dole/gets it into a Bank A/c weekly, watches SKY TV, opens a six pack and smiles smugly (while doing the odd FAS Course here and there of course).

I imagine that even now there are people in this situation going to the Dole Office and being turned away, unaware of not being entitled to any payments.

It's kinda worrying too to have to rely on the HSE for a bail out. I imagine they haven't oodles of cash for this in the present scenario and what are ppl like this supposed to do then? Beg on the street?

This may become a serious issue to have to be dealt with yet (assuming unemployed self employed numbers rocket). Along with the myriad of others.

[seabhcan]

Not so in the case of a self employed person

I assume this also applies to the thousands of taxi drivers about to go under? My experience is most taxi drivers are clueless when it comes to tax rules.

[Ah Well]

I assume this also applies to the thousands of taxi drivers about to go under? My experience is most taxi drivers are clueless when it comes to tax rules.

Presumably it does in that they are self employed. It also applies to a lot of others though

[Ah Well]

Thanks. Very helpful. I'll pass it on.

No prob