Self-employed to JSA and claim insurance

StratApproach · 28 October 2004 at 12:01AM

Hi,

Asking for views and any experiences of individuals having redundany/sickness/accident cover whilst being self-employed.

Is it worth it or will I have problems if I claim.

My situation is that I took out the policy when I was working full-time a couple years back, then made redundany, was going to claim but then got a 12 month contract. This contract finished in May this year and since then I've been self-employed 'trying' to build up a business. So far I've not had a problem moneywise, but if the business does not perform well over the next six months and I will have to close it down. What issues would I face claiming on the basis of unemployed seeking work from self-employed (sanctions etc).

If I cancel it, I suspect it may then be difficult to get again. Just don't want to throw good money down the drain when I could use it to build up a reserve instead.

Its like a BUPA policy I have - now too frightened to cancel, but over the last 10+ years I paid enough for a major op.

Thanks

StratApproach

Fran · 30 October 2004 at 4:42PM

StratApproach,

I'm not sure what your question is. Can you explain a bit more?

What issues would I face claiming on the basis of unemployed seeking work from self-employed (sanctions etc).

mirpur786 · 31 October 2004 at 12:26AM

hi
i have been working for the social security for the last 12 years, if your business does not work out and you wish to claim jsa then their is no problem for you claiming, they will not sanction your benefit, sanctions are mainly applied when you leave your job voluntarily and without good reason.

what you will find is that when you claim jsa you will have to have a interview about your self employed work where you will have to provide proof of your last 12 months earnings and reason for claiming. you are still entitled to work at your self employed business and claim jsa at the same time as long as you are working under 16 hours and the money you earn is less than what you would get on benefit. you just have to make sure all work is declared.

all this information relates to claiming income based jsa.

i hope this helps

dag_2 · 31 October 2004 at 1:42AM

i have been working for the social security for the last 12 years, if your business does not work out and you wish to claim jsa then their is no problem for you claiming, they will not sanction your benefit, sanctions are mainly applied when you leave your job voluntarily and without good reason.

Yeah ...

I might be wrong on this - but I think they may be able to sanction you for "voluntarily leaving employment" if you discontinue a business that you could have continued with - but in practice, it's unlikely to happen.

Why? Because it's different with PAYE employment. I believe they don't actually sanction your JSA until your previous employer has confirmed that you left voluntarily, or were dismissed for misconduct. But if you were self-employed, they obviously can't write to a previous employer - they can only go by your word. They don't ask for details of your clients.

You will have to fill in a form called a "B12".

The B12 form asks about business assets, such as stock, debtors and equipment, and whether you can sell these assets. They will want to know whether you can cash these assets in - because if you can, it may reduce your entitlement to means-tested income-based JSA. If you've been trading for more than 12 months, then they will probably want to see profit+loss accounts and balance sheets - however, not having formal accounts shouldn't bar you from getting benefits.

mirpur786 · 31 October 2004 at 11:35PM

the form is a b16 and we dont really pay much attention to it because there isnt much information on it that helps, we do have other proformas that we complete, they wont sanction your benefit for stopping self employed work that isnt working out and like i said in my previous reply you can lower the hours that u work as a self employed person to under 16 hours and still claim income based jsa as long as your earnings are under the earnings limit

StratApproach · 7 November 2004 at 2:13PM

The reason why I ask...

I currently pay and have been for sometime £50 a month on redundancy, sickness and accident cover insurance.

Been self-employed for 6 months (took the cover out 2 years ago) and so far its been OK money, but thats based on consulting with one client and only working a couple of days a week. Spent the other time studying and ;D enjoying a bit of freedom.

Getting more customers is going to be interesting. and I have committed an amount of cash (supplement outgoing and promoting myself) but if this amount goes (within 4 months)then I will have to look for a job b'cause I don't want to flog a dead horse and spiral out of control.

So the trade off is whether the 50 quid a month is money down the drain or could it be the lifeline (in the short-term) if I change my mind in the future and seek a 'permanent' job.

The main point I see is that I would need to confirm the business is no more. ie account letter etc. And stopping self-employment is just like being made redundant.

I suppose I need to be careful on any item that I decare for tax purposes for the business as this may be taken into account.

Anyway, looking positive... I hope the cover remains as a safety net and just that.

Thanks for the comments. Really appreciate.

StratApproach

bored_at_home · 11 February 2009 at 5:44PM

hi strat, i know where you are coming from and the problems you can foresee.
i have recently closed my business, firstly i went on jsa because i was down to doing less than 16hrs a week but found i was unable to claim on my mortgage insurance, or any of my 3 credit cards as i hadnt permanently ceased trading due to being unable to meet its business debts as they fell due.
i then closed it down, (as that actually was the case) then had to inform inland revenue in writing before i could get a letter from them (5 weeks for a reply) to confirm id ceased trading before any insurance claims would process claims. some also insisted on me sending demand letters from business creditors bank statements and all this years trading figures.
all my payments are direct to the creditors so they havnt affected my income based jsa. there are a lot of credit card and loan companies who dont cover unemployment if you are self employed so check if yours does before you keep paying it.
mine pay 10 per cent of each card balance monthly and my card balances are huge so im now much better off by staying unemployed till theyr cleared .

hope this helps you

Self-employed to JSA and claim insurance

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