Are self employed people who become unemployed discriminated against?

Ah Well

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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

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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

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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
 
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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

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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

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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

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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.
 

Ah Well

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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

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The self-employed should have paid PRSI A
Balanced against that is the huge number of expenses and outlays they have to pay anyway as self employed. Which PAYE workers paying PRSI Class A don't have to contend with.
 

irelandproud

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Seriously this is unbelievable i know at least 4 people who were self employed as builders and cant get any social welfare, they are surving on charity and what little savings they have. I would say there are at least 30,000 such people unemployed at the moment who cant get welfare and are not included on the live register.
 

LeftOfCentre

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Relax Folks ! ! ! ! This Is not the US, , , Anyone who does not qualify for JA/JB can apply for assistance. I know self employed people receiving the full benefit, one of them is receiving a 1300pm contribution towards his mortgage!

These benefits are means tested if you are self employed. If you have say 300k in the bank, It is unlikely you will be able to claim them.

Note: This is also true of share holding directors, they pay a different form of PRSI.

Before we get the violins out for the self employed, think ....... who has been sneering about the little perks they can have ''written off against tax,'' meaning they are driving around a range rover, having their Lunch, using their home PC, Internet, mobile phone, all for 47% less than what we would have to pay for it as PAYE workers. (not to mention the handy little cash jobs that many took advantage of)

The fact is that they wont go hungry. . . They'll just have to fill out a couple more forms than regular PAYE workers....and if they are deemed to need it, they will get it,,,pretty fair I think.

Oh ! . . . and someone above mentioned the ''poor'' taxi drivers ! . . . . Yes they are having it tough at the moment! .... but if something happens to their car or they get sick etc they can apply for assistance.. . . . . But in fairness... Show me a TAXI driver who counts every single fair in his annual tax return,,,,, and after I have picked myself up off the floor, I will feel lots of sympathy! ! !
 
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selfemployed

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This is Worse Than The US !

Try to live on zero with the once friendly lenders about to take your home and naturally enough the friends and family who helped out are running away because they now see the "loans" were just charity.

Also the Self Employed were not allowed to make any other contribution except class S for PRSI.

My employees and the VAT office were paid in full, I owe little more three months payments on the average mortgage but am regarded as a failure.

Never had a 4X4 or any of the trappings of wealth described, yet the Dept of Social Protection (now there's a contradiction) are processing appeal or Begging Application Number 12.

The reason ?

I am still alive so must be getting money for food somewhere, just thankful my children are raised and left home.

No wonder suicide figures are so high in this caring country of ours.
 

Medicine Melancholy

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I think there should be a better support net for self employed people, as people should be encouraged to set up small businesses to drive the Economy. If you end up on the streets the next time a recession hits, it's not a very glamorous way to go.
 

Basecase

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Is support for themselves in quiet periods something that self employed should factor into their charges to clients but they don't do this??
 

hairylemon

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Relax Folks ! ! ! ! This Is not the US, , , Anyone who does not qualify for JA/JB can apply for assistance. I know self employed people receiving the full benefit, one of them is receiving a 1300pm contribution towards his mortgage!

These benefits are means tested if you are self employed. If you have say 300k in the bank, It is unlikely you will be able to claim them.

Note: This is also true of share holding directors, they pay a different form of PRSI.

Before we get the violins out for the self employed, think ....... who has been sneering about the little perks they can have ''written off against tax,'' meaning they are driving around a range rover, having their Lunch, using their home PC, Internet, mobile phone, all for 47% less than what we would have to pay for it as PAYE workers. (not to mention the handy little cash jobs that many took advantage of)

The fact is that they wont go hungry. . . They'll just have to fill out a couple more forms than regular PAYE workers....and if they are deemed to need it, they will get it,,,pretty fair I think.

Oh ! . . . and someone above mentioned the ''poor'' taxi drivers ! . . . . Yes they are having it tough at the moment! .... but if something happens to their car or they get sick etc they can apply for assistance.. . . . . But in fairness... Show me a TAXI driver who counts every single fair in his annual tax return,,,,, and after I have picked myself up off the floor, I will feel lots of sympathy! ! !
You seem to think that all self employed people are or were living it up, not so, most of us worked for more than 80hours per week, for an income lower than some of our employees, we don't get the protection that paye workers get, but get considerably more stress.

During quiet months, with no income coming in, you find that your income from the good months has to cover you for those bad months, this especially applies for those of us engaged in seasonal businesses, you will find that your income averages well below minimum wage.

I agree that some people take the piss with their perks, you find that those types tend to be fly boys, here today gone tomorrow, the rest of us, take the good with the bad.
 

Diawlbach

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The self-employed should have paid PRSI A
Even if you pay that, you won't get the benefits if you're self-employed.

You won't get benefits from paying the same USC.

And if you have a great year, you'll pay more USC than anyone employed, to pay for benefits for others to which you'll never be entitled.

Frankly; why would anyone set up a business when you're treated as a cash cow and effectively punished for trying to make a go of it and create something to employ people?
 

laidback

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the self employed are discriminated in a number of ways, not just in PRSI.

I'll give you an interesting statistic. 2 single people. One has contributory old age pension €11,976 pa (230.30 pw). the other is single and self employed and also has an income of €11,976 (sales less all business expenses).

The pensioner is not subject to any deductions on that income (and nor should there be deductions on an income of that amount) but the self employed person is subject to deductions of €1,502 for income tax €745, PRSI €479 and USC €278.

Is that fair?

Many self employed people have low incomes but we only read in the media about the high earners so the perception is that the self employed have good incomes.
 


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