Home > Unemployment Benefits > Out of Work Benefits for the Self Employed

Out of Work Benefits for the Self Employed

By: J.A.J Aaronson - Updated: 19 Jun 2019 | comments*Discuss
Self Employed Benefits Out Of Work

Self-employed people get a pretty raw deal when it comes to out of work benefits.

Despite paying just as much tax as their employee counterparts, the self-employed often find themselves with fewer entitlements when they need the state’s support.

In an increasingly precarious economic environment, this is recognised as a growing problem. There are moves to have self-employed people’s benefit entitlements extended, particularly with regard to Jobseeker’s Allowance. But as the situation currently stands, as a self-employed person you are likely to find yourself with fewer options while you look for work.

Can I claim Jobseeker’s Allowance?

There is a significant loophole in the Jobseeker’s Allowance system. Jobseeker’s Allowance (JSA) is intended to help those who are out of work. It is an intrinsic part of the your National Insurance ‘policy’ – and yet many self-employed people cannot claim it, even if they have made their National Insurance Contributions (NICs).

There are two types of Jobseeker’s Allowance. The first is contribution-based JSA. Eligibility for this payment is contingent on the individual being up to date with their National Insurance Contributions – but self-employed NICs do not count towards this entitlement. So, self-employed people are generally not entitled to contribution-based JSA.

The second type is income-based JSA, which is designed for those who have not made enough National Insurance Contributions, and whose income is below a certain level. Self-employed people may, in very limited circumstances, be entitled to income-based JSA – but it is important to understand that you will not receive anything if your income or savings are above a certain threshold, or if you live with a partner who earns more than a certain amount each week. Your eligibility, and the amount you might receive, depends on your circumstances. You may be able to find out whether you are entitled to income-based JSA by using the DirectGov benefits calculator.

What are Working Tax Credits?

It is quite common for self-employed people to cut down the number of hours they work, in order to find a job. While you might need those valuable hours, for example to go to interviews, cutting back on the work you are taking can have a dramatic financial impact.

Working Tax Credits are one way in which you might be able to mitigate that impact. Tax credits are non-taxable payments made by the government to those in certain circumstances. The Working Tax Credit is available to those who are working, but who are on a low income.

In order to qualify for the Working Tax Credit you need to be working for at least 16 hours a week if you have a dependent child, or at least 30 hours a week if you do not. You also need to expect to be working for at least the next four weeks. The amount you receive will depend on a range of circumstances including the total number of hours you are working, the number of children you have, and your age. As with JSA, you can check whether or not you are entitled to Working Tax Credits, and how much you might receive, by using the calculator on the DirectGov website.

What about other benefits?

It is important to understand that there are many benefits that are not affected by your self-employed status. Many of these benefits are available to those who are in work too, but they obviously become even more important when you are job hunting.

Of these, Housing Benefit is perhaps the most important. This is a payment made to help with the cost of your rent. You can get this whether you are in work, out of work, or self-employed – provided that your income and savings don’t exceed a certain threshold.

The amount of Housing Benefit you might receive will depend on the size of your property and its location. More information about Housing Benefit is available elsewhere in this section, but you should contact your Local Authority for more information about claiming.

It is important to understand that the rules regarding state benefits for the self-employed are complex – indeed, they can be significantly more complex than those regarding benefits for out-of-work employees. As such, you should consider seeking independent advice to help ensure that you receive what you are entitled to. Free, impartial advice is available from your local Citizens Advice Bureau. Advisors there will be able to tell you what you might be able to claim – and, crucially, how to do it efficiently, in order to make sure that you get the cash as quickly as possible.

You might also like...
Share Your Story, Join the Discussion or Seek Advice..
I am a self employed training plasterer and have currently been out of work for almost 4 weeks, as most people know being self employed and not working means no income, which is incredibly difficult, is there anything i can do/ask for help??
Bfisher - 30-Sep-15 @ 12:39 PM
Share Your Story, Join the Discussion or Seek Advice...
(never shown)
(never shown)
(never shown)
(never shown)
Enter word:
Latest Comments
  • Kat gale
    Re: Becoming a Paramedic
    I need pinging in the right direction I want a new career change at 48 but don’t no where to start please help
    10 June 2020
  • Pat
    Re: Becoming a Painter and Decorator
    I am looking for a career change. I've done a fare bit of decorating work and want to work for myself any advice would be…
    4 June 2020
  • nita
    Re: Becoming a Mechanic
    I'm 40 I failed myatric I'm working in motor industry I want to do motor mechanics but I'm not sho if there is any chance for me
    1 June 2020
  • Barkerelli
    Re: Becoming a Social Worker
    Hello. I have worked in Adult Social Carr all my adult life after studying Social Policy at university. For the last 12 years I have…
    31 May 2020
  • Ron
    Re: Where to Get Help With Funding a Career Change
    Hi I am looking to move away from IT (engineering programming) and looking to move into Procurement / FMCG…
    22 May 2020
  • Ola
    Re: Jobs You Didn't Know Existed
    I have 19 years experiience working in a secondary school as a teacher now looking to go into social work . Not really sure how I…
    20 April 2020
  • rachet
    Re: Working with Animals
    I am working in the NHS and I have been thinking about a change and I really think I would love to work with animals. I am a country girl but…
    8 April 2020
  • Chrissie
    Re: Working with Animals
    Hi , Im 38 and so bored in my current office job. Ive always wanted to work with animals but life got in the way and ive ended up stuck…
    17 February 2020
  • Pogelswood
    Re: Becoming a Teacher or Teaching Assistant
    I have a degree, BAhons in early years teaching and am looking at becoming a TA. Do I need to undergo any further…
    14 January 2020
  • alihon
    Re: Becoming a Mechanic
    I work in an FE college and I would like to highlight the fact that the advice given here is not correct. There are very few colleges which…
    7 January 2020