What is the Back To Work Enterprise Allowance?
The Back To Work Enterprise Allowance (BTWEA) is a government scheme for people under the age of 66 who are receiving certain social welfare payments. The goal of the Back To Work Enterprise Allowance is to encourage people who are unemployed to start their own businesses.
The BTWEA allows you to keep receiving most or all of your social welfare payments for up to 2 years while you set up your own business in Ireland. This means you can focus on setting up and running your own business and still get an income from your social welfare payments.
If you are considering setting up your own business, we want to support you. Register for our Startup Webinar to get free advice on setting up a business in Ireland from one of our qualified accountants or talk to a member of our Client Services team today if you have any questions.
How much is the Back To Work Enterprise Allowance?
If you qualify for the BTWEA you can receive:
- 100% of your social welfare payment for the first year
- 75% of your social welfare for the second year
This includes any increases you are entitled to for qualified adults or children.
How to qualify for the Back To Work Enterprise Allowance?
1. Jobseeker's Benefit/Allowance
You have been receiving Jobseeker’s Benefit or Jobseeker’s Allowance continuously for at least 9 months (234 days).
If you have been getting either of these payments for 12 months (312 days) before applying for the Back To Work Enterprise Allowance you are allowed to have had up to 30 days off the Live Register during this time and still receive the allowance.
2. Other welfare payments
You have been receiving one of the following payments continuously for at least 9 months:
- Jobseeker’s Transitional Payment
- One-Parent Family Payment
- Blind Pension
- Disability Allowance
- Carer’s Allowance (full rate) – having stopped caring duties
- Deserted Wife’s Benefit /Deserted Wife’s Allowance
- Farm Assist – you should note that the new business cannot be in relation to the farm holding or the continuation of an existing business
- Invalidity Pension
- Incapacity Supplement
- Widow’s, Widower’s or Surviving Civil Partner’s (Non-contributory) Pension
3. Illness-related payments
You have been receiving an illness-related social welfare payment for 3 out of the last 5 years.
4. A combination of payments
You have been receiving a combination of One-Parent Family Payment/Jobseeker’s Transitional Payment/Jobseeker’s Allowance continuously for 9 months.
Alternative ways to qualify for the BTWEA
You may also qualify for the Back To Work Enterprise Allowance if you:
- Are a qualified adult of someone who is already getting the Back To Work Enterprise Allowance and they have to cease their self-employment due to certain circumstances such as long-term illness or injury
- Have recently been released from prison and meet the criteria for the scheme
How to apply for the Back To Work Enterprise Allowance
- Fill in the BTW2 application form – you can print this form yourself or pick up a copy at your local Intreo or social welfare office. The form will ask you for details about your business proposal. You don’t have to include a detailed business plan at this stage, but it can help you prove how serious you are about starting your business if you do. You should also include details of any Start Your Own Business courses you have attended with your Local Enterprise Office
- After you return your application form to your local Intreo centre or social welfare office, you will be assigned a case officer who will meet with you to see if you’re eligible for the Back To Work Enterprise Allowance
- You will then be sent to a Local Development Company (LDC) who will look at your business idea and help you create your business plan
- This plan will be returned to your case worker who will make a recommendation to a deciding officer on whether you should receive the allowance
What happens after I apply for Back to Work Enterprise Allowance?
If you are approved for the Back To Work Enterprise Allowance, you need to register as self-employed with Revenue. If you later stop being self-employed or take up other employment you need to let the Department of Social Protection know.
If your application isn’t approved, you can make changes to your business plan and apply again as long as you are still eligible. You can also contact the Department of Social Protection if you feel your application was unfairly refused.
Employment grants and extra benefits
You can receive grants from your Local Enterprise Office or a Local Development Company to help you set up your business. These will not affect your entitlement to the Back To Work Enterprise Allowance.
You can also keep any other benefits you are entitled to, such as a medical card and Back to School Clothing and Footwear Allowance – the BTWEA will not effect your entitlement to these benefits.
How is the Back To Work Enterprise Allowance taxed?
You do not have to pay tax, Pay Related Social Insurance (PRSI) or Universal Social Charge on the Back To Work Enterprise Allowance. However, you will have to pay these taxes on the income you make from your new business.
If you need help or guidance on your tax obligations a member of our team will be happy to help you.
If you aren’t eligible for the Back To Work Enterprise Allowance, you might be entitled to the Short Term Enterprise Allowance (STEA) instead. The STEA supports people who have lost their job start their own businesses. If you are recently unemployed but haven’t been receiving welfare payments for the 9 months required to receive the Back To Work Enterprise Allowance, the Short Term Enterprise Allowance could be the best option for you.
If you are receiving social welfare payments and considering setting up your own business as an option, you could qualify for the Back To Work Enterprise Allowance.
If you have any questions about setting up your business or your tax or compliance obligations talk to a member of our Client Services team today – 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.