What is the Short-Term Enterprise Allowance?
The Short-Term Enterprise Allowance (STEA) helps people who have lost their jobs to start new businesses in Ireland. It is a government support, provided by the Department of Employment Affairs and Social Protection
You can receive the STEA instead of your Jobseeker’s Benefit (JB) or Jobseeker’s Benefit Self-Employed (JBSE) for up to 9 months.
If you need any help setting up or running your business in Ireland, our professional team is happy to help at any stage. Reach out to us today to see how we can help you.
Are you eligible for the Short-Term Enterprise Allowance?
To qualify for the Short-Term Enterprise Allowance, you must meet the following criteria:
- You must be getting or be entitled to get Jobseeker’s Benefit or Jobseeker’s Benefit Self-Employed (JBSE)
- You must be setting up a new business in Ireland. You cannot avail of the STEA for pre-established businesses and your business should operate in Ireland. You will need to inform your case worker of any business trips outside of Ireland in advance
- You must prepare a business proposal and have it approved by a Case Officer from an Intreo Centre or Social Welfare Branch Office or an Enterprise Officer in your Local Development Company
Once your application is accepted you will need to register as self-employed with Revenue. Later, if you take up employment you must notify the Department of Social Protection immediately as this may affect your entitlement to the allowance.
If you have received an employment grant from a Local Enterprise Office (LEO) or a local development company you may still be entitled to the STEA.
Businesses not eligible for the STEA
Certain businesses are not eligible for the Short Term Enterprise Allowance:
- Businesses that were set up before the application for STEA. The allowance is for new businesses only
- Businesses that you have taken over, inherited, or leased
If you have received the STEA for one business and then cease trading, you cannot make another claim for the allowance until 5 years have passed.
Also, if you are self-employed on a temporary, part-time or seasonal basis, you will usually not qualify for the Short-Term Enterprise Allowance.
How much is the Short-Term Enterprise Allowance?
The Short-Term Enterprise Allowance will be paid at the same rate as your Jobseeker’s Benefit.
The income that you earn from your new business will not affect how much you are entitled to from the STEA.
This means you can earn an income from your new business and still get the Short-Term Enterprise Allowance.
How long can you receive the Short-Term Enterprise Allowance for?
You can receive the Short-Term Enterprise Allowance for as long as you are eligible for Jobseeker’s Benefit.
Generally, a person is entitled to Jobseeker’s Benefit or Jobseeker’s Benefit Self-Employed for a period of 6 or 9 months so the maximum amount of time you can receive the STEA is 9 months.
How to apply for the Short Term Enterprise Allowance
Download and complete Form STEA1
Although you don’t need a detailed business plan at this stage it can help you explain your business and show that you are serious about starting a successful business.
Include any business courses you have attended in the past
Taking part in these kind of courses can help prove your dedication to starting your own business and you can avail of many of them for free. You should contact your Local Enterprise Office for more details.
Return the form to the Jobs Case Officer
They may also appoint you an Enterprise Officer from your Local Development Company to help you with your application.
After your application is reviewed
If your application is accepted, you should register as self-employed with Revenue. Since the STEA is a non-statutory scheme you can’t appeal the decision if your application is approved although you can ask the Department of Social Protection to review your application if you feel you have been unfairly refused. You should request a review in writing within 21 days of your rejection.
Is the Short-Term Enterprise Allowance taxable?
You do not need to pay Pay Related Social Insurance (PRSI) or Universal Social Charge (USC) on the STEA. However, you will need to pay Income tax on the allowance in the same way you would for your Jobseeker’s Benefit or Jobseeker’s Benefit Self Employed. If you need help with your tax obligations talk to a member of our team who will be happy to advise you.
Other supports you might be entitled to
You may be getting extra benefits alongside your Jobseeker’s Benefit or Jobseeker’s Benefit Self Employed, such as a medical card or Back to School Clothing and Footwear Allowance. You should be entitled to keep these benefits as long you keep satisfying the conditions set out for them.
The Enterprise Support Grant
The Enterprise Support Grant (ESG) can help cover the financial costs of setting up your business. It is designed to support businesses set up using the Short Term Enterprise Allowance or the Back To Work Allowance (BTWA).
You can only get the ESG if you are approved for the Short-term Enterprise Allowance or the Back To Work Enterprise Allowance. People who qualify for the 9-month STEA can qualify for up to €1000, while people on the 6-month STEA can qualify for up to €625.
There are limits on the amount of your ESG you can spend on specific expenses and some costs that can’t be covered by the ESG. For example, you can spend up to €250 of the grant on business registration costs. For a full breakdown of how you can spend your ESG, visit the gov.ie website.
You should consider what costs you intend to use the grant for before you apply. Check out our guide on the costs of setting up a Limited Company in Ireland to give you an overview of the costs you might have.
We’ve laid out the steps for applying for the ESG below.
Submit a business plan to describe your business
Submit quotes for what you will spend the grant on
Prove that you can make a matching contribution
If you are unemployed and considering setting up your own business as an option, you could qualify for the Short Term Enterprise Allowance.
If you have any questions about your tax or compliance obligations talk to a member of our Client Services team – they will be happy to help you.
You can also check out our full list of grants and supports for setting up and running a business in Ireland to see what other supports you might be entitled to.
Tom is a Fellow Chartered Certified Accountant (FCCA) and Chartered Tax Advisor (CTA) and is Accounting Team Manager at Accountant Online. Areas of expertise include Accounting, Compliance, Taxation relating to small business and company directors.