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Contractors' Questions: Can I claim JSA while freelancing? From Main Page

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    Contractors' Questions: Can I claim JSA while freelancing? From Main Page

    This question and answer from the main page. All good stuff, but doesnt make it any the clearer if you're a Company Director?

    If you aint contracting, been on the bench for a year, what can you claim?

    Contractor’s Question: I have recently been made redundant at a web development company and am struggling to find a job. It makes it more difficult that I have an 11-month-old little boy. I'm currently receiving job seekers allowance and don't want to do anything to jeopardise any benefits, not that there is a lot.

    Is it possible to work as a freelance contractor, or at least plan to, while still receiving job seekers allowance? Also is it possible to receive JSA with a baby on my hands, or does that not impact my eligibility to claim JSA?


    Expert’s Answer: The eligibility rules for Job Seeker's Allowance are notoriously complex, so much so that we at the PCG have produced an extensive guide for members outlining some of the less well known rules dictating eligibility.

    In your circumstances, you will be unable to work more than 16hours a week without it seriously affecting your JSA. You will also be unable to engage in more than 16 hours of "guided learning" a week, unless you fully explain what this entails to your local Jobcentre Plus. There are also
    limits on how much you can earn in any work of less than 16 hours.

    This may seem restrictive. However there is nothing stopping you investigating how to set yourself up as a freelancer, and indeed setting up as one and looking for contracts, whilst claiming JSA. If anything, this
    would count as part of your "job-seeking" activity and would be encouraged.

    Indeed, the government themselves have campaigned to encourage JSA claimants to "go it alone" and try working for themselves. That said, keeping Jobcentre Plus fully informed of your intentions would be a wise move. Freelancing isn't for everyone, and there are downfalls, so seek advice as far and as wide as possible, but many people have come to freelancing and have never looked back.

    On your second point - if you are currently receiving JSA then a baby on your hands should not affect your benefit negatively. If you are receiving "income based" Jobseeker's Allowance then I would very strongly encourage you to seek what other benefits you are eligible for, including support for mortgage interest, perhaps by visiting a citizens advice bureau.

    The fact you have been made redundant suggests to me you have been an employee in the past, which makes claiming for these benefits much simpler. Many freelancers have to suffer more complex tests of eligibility. If you decide to "go it alone" as a freelancer, as well as support from Jobcentre Plus, you can also expect support from Business Link.


    The expert was George Anastasi, policy official at PCG , the trade group for freelancers.
    What happens in General, stays in General.
    You know what they say about assumptions!

    #2
    I posted a link the other day in Legal (I think). Shouldn't be hard to find, but jist of it is you can lay yourself off and still claim jobseekers.
    ‎"See, you think I give a tulip. Wrong. In fact, while you talk, I'm thinking; How can I give less of a tulip? That's why I look interested."

    Comment


      #3
      Originally posted by MarillionFan View Post
      ...doesnt make it any the clearer if you're a Company Director?
      As has been explained on here so many times (usually in Business/Contracts or Accounting/Legal), to be a director of a company is to hold an office. It may or may not be the case that a person holding the office of director of a company is also a salaried employee of that company.

      Employment status is relevant to JSA; the fact of holding the office of director of a company is irrelevant.

      I would have expected anybody running a Ltd to have some understanding of the legal nature of directorship and the fact that it is independent of employment, but apparently not as most people seem to get it wrong whenever the question comes up.

      Next question: if you stop paying yourself a salary, thereby becoming unemployed and thus entitled to JSA, can you still pay yourself dividends? Hint: being a shareholder is not the same thing as being an employee

      Comment


        #4
        Originally posted by NickFitz View Post
        As has been explained on here so many times (usually in Business/Contracts or Accounting/Legal), to be a director of a company is to hold an office. It may or may not be the case that a person holding the office of director of a company is also a salaried employee of that company.

        Employment status is relevant to JSA; the fact of holding the office of director of a company is irrelevant.

        I would have expected anybody running a Ltd to have some understanding of the legal nature of directorship and the fact that it is independent of employment, but apparently not as most people seem to get it wrong whenever the question comes up.

        Next question: if you stop paying yourself a salary, thereby becoming unemployed and thus entitled to JSA, can you still pay yourself dividends? Hint: being a shareholder is not the same thing as being an employee
        I have always salaried myself over the year as to pay it out monthly and minimise tax regardless of when I am contracting 'sorry a disguised employee'. In my case I am also 'Self Employed' as well as a Director, though I do not draw a salary from the Self Employed side.

        I haven't seen the question answered specifically before. If you are employed through your own LTD company, and your contract finishes, the question is when you go for JSA did you finish because your job finished(surely not as you are a business and not a disguised employee), did you quit, were you fired or made redundant.

        The answer is actually quite complex, as opposed to your sugar sweet condescending reply.

        So I'd love to hear a reply from somone who has done it as opposed to someone who writes counter coding.
        What happens in General, stays in General.
        You know what they say about assumptions!

        Comment


          #5
          Originally posted by MarillionFan View Post
          I haven't seen the question answered specifically before. If you are employed through your own LTD company, and your contract finishes, the question is when you go for JSA did you finish because your job finished(surely not as you are a business and not a disguised employee), did you quit, were you fired or made redundant.

          The answer is actually quite complex, as opposed to your sugar sweet condescending reply.
          You haven't looked very hard...

          If there's no work for you to do through your Ltd then just lay yourself off. You can claim JSA straight away. You don't have to make yourself redundant.

          And it's not that complex at all really. Just go down the job centre and sort it out...
          ‎"See, you think I give a tulip. Wrong. In fact, while you talk, I'm thinking; How can I give less of a tulip? That's why I look interested."

          Comment


            #6
            I worked on the JSA Project when it was being developed.

            JSA has 2 elements, income based (IB) and contributions based. If you have a war chest, you be unlikely to get JSA IB. However, provided you have paid NI Conts, you are entitled to Conts based JSA.

            Conts based JSA only lasts 13 weeks and the size of your war chest has nothing to do with entitlement. You must make clear you are only claiming Conts based JSA otherwise you'll get bogged down in IB considerations.

            The 'expert's' advice given on the CUK page isnt giving the whole story.
            I couldn't give two fornicators! Yes, really!

            Comment


              #7
              Originally posted by MarillionFan View Post
              I have always salaried myself over the year as to pay it out monthly and minimise tax regardless of when I am contracting 'sorry a disguised employee'. In my case I am also 'Self Employed' as well as a Director, though I do not draw a salary from the Self Employed side.

              I haven't seen the question answered specifically before. If you are employed through your own LTD company, and your contract finishes, the question is when you go for JSA did you finish because your job finished(surely not as you are a business and not a disguised employee), did you quit, were you fired or made redundant.

              The answer is actually quite complex, as opposed to your sugar sweet condescending reply.

              So I'd love to hear a reply from somone who has done it as opposed to someone who writes counter coding.
              You can be laid off by your employer when there is no work for you to do and are then entitled to claim JSA. This has been answered repeatedly on here. Look in Accounting/Legal or Business/Contracts as you're unlikely to find it in General.

              Comment


                #8
                I don't get any benefits because I didn't sign on early enough, so they tell me. The reason being I used up the warchest and didn't pay NI during that warchest time. The moral of the story is sign on ASAP and don't be self-reliant or honest.

                Comment


                  #9
                  I believe it is very important to sign on during any out of contract (bench) time and that is not for the few quid they pay you it is because during this time they effectively contribute NI towards your state pension and so your bench time counts as pensionable time for getting a full state pension (currently about £500 per month).

                  Otherwise although those who have been on the dole all their life will qualify for a full state pension, you who have been benched for some time will not.
                  First Law of Contracting: Only the strong survive

                  Comment


                    #10
                    oh dear. I've been paying myself the minimum wage (from my company account 2008 profit) for about 1.5 years to keep up the N.I contributions. I've supplimented this with money from my own savings.

                    I didn't want to go on JSA straight away as it was my choice to take a year plus out of work when my last contract came to an end.

                    I'm now looking into going on JSA instead of paying myself a salary. Have I done the right thing?

                    Comment

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