New Enterprise Allowance scheme - My story

TrueBlue1965

My NEA providers have been great to be honest, Andy2013. The difficulties have been with the changes to the loan as of 1st Oct by the Government.

I finally got my loan agreed in principle this morning after complaning to the new loan providers about the amount of time it was taking to sort out my application. It only took a manager 15 minutes to look though my business plan and cash flow. Then he phoned me back to make the offer. It really was as simple as someone picking up my documents and reading then and it became clear that I have a good business idea. My loan should finally be in the bank in about 10 days.

I sign off JSA and sign up for NEA payments next Friday. :beer:

Andy2013

Superb that's a proper job ,really glad its all go now just in time for Christmas as well :j

I am glad your NEA experience has been better than mine , I do like to moan about it , but it was a rubbish experience so I wont be sending them a Christmas card

s450

Thanks guys and congratulations that everything is working that well with you both!
I also want to start my business and finally be independent :beer:

but as you also made me understand, it is extremely important to make sure that all the documents have been passed so that the switch from JSA to NEA is smooth and with no delay of payment of the allowance, for especially at the early stage of the start-up I do not want to have any financial problems.
So, like you too, I also want to make sure that when I sign off, I will get the NEA immediately without any delay.
I will talk to my JC agent next week

2busrules

I had my NEA mentors meeting this morning, two months after my initial appointment. I found it useful but my mentor couldn't answer all my questions which didn't impress me, so wondering if anyone here can help.

Say I sign off JSA and go onto NEA and get my £65 a week. Do I still have to work no more than 16 hours a week? Secondly I've been told that the £65 won't affect my Housing Benefit. What about the money my business makes? If say I earned £100 a week I've budgeted that I wouldn't get much if any Housing Benefit. But do I also have to declare that £100 and would the Job Centre take anything from me?

Andy2013

Your mentor should easily have been able to answer these to help you out

Firstly when you go onto NEA you are self employed so you no longer have to abide by the laws of JSA any longer, you work as much as you have to ,to make your business a success ,you can claim WTC if you qualify and you are completely self sufficient, but you also have to act like someone self employed , you have to pay tax on profit once you reach the threshold and you also pay your NI yourself which is only a few pounds a week but its your responsibility.

So that leads to the second question , HB is paid in full (generally) to those on JSA, but once you join NEA the payments from NEA don't affect HB initially and you will get treated no different , BUT once you start earning from your business any PROFIT you make does have to be disclosed so as you earn more from your business you will pay more of your rent and at some point when you make enough profit HB will stop payments and hopefully you will be able to sustain your finances.

Remember though that you LHA will check periodically (every 2-3 months generally) to assess how things are going so they do give you time to get up and running.

It is always best to talk to those in the know direct just to clarify it properly but HB only pay whilst you need the help, one day you have to make a jump into the big bad world which is quite daunting but don't allow this to scare you of, I fear a lot hold back because they are frightened of losing there safety blanket of benefits but to succeed you just have to push like hell.

You end by asking about the job centre taking any money of you, quite simply NO they wont, in fact once on NEA you have very little to do with them and over my 6 months I had 4 visits to the JC 2 of which were to moan about no money being paid to me.

2busrules

many thanks for those answers, I can't believe that my mentor couldn't tell me the info I need to know. I also emailed Enterprise First this afternoon and they told me "I understand you are only permitted to work under 16 hours a week. Again, any earnings whilst you are on benefit, you will need to speak with your advisor." It doesn't really instil me with much confidence that's for sure.

Another question is re declarations of payments while on JSA. I've made declarations over the past few months but never had any money taken out of my JSA payments. Am I likely to get a big bill in the future or do they take it out of the NEA payments?

Andy2013

Whilst your on JSA you can indeed only work upto 16 hours a week and it all has to be declared but if any deductions were to be made which is very rare then they would be taken earlier, you wont get a big bill when you leave so don't worry.

When you are building up to NEA you do have to "comply" with JSA rules but there is no harm doing research into your business , and as soon as you start the process, even at the induction stage prior to even having your business plan signed off, you can class yourself as self employed and you NO LONGER have to act as though on JSA.

This was something which was argued on my induction as I also had to sign on that same day, my advisor at the JC was convinced I still had to do job search , but during the induction calls were made and it was confirmed that once your advisor puts you forward for NEA you no longer have to do job search and can focus fully on your business plan and future business.

My experience is that we all need to know exactly how it should be , as most JC have no or little knowledge of the scheme.

TrueBlue1965

2busrules, if im reading your posts correcly. It reads like your already running your business in a small way but doing less than 16 hours per week at the moment to stay within the rules for JSA re benefits. If correct, then you need to be very careful. You cannot be running your business for at least 6 months before your able to go on NEA. You can be employed but not in business yourself. I nearly got caught out with this issue after testing the water in a very small way with my business idea while I was on the Work Programme before moving on to NEA scheme. I had to do some fast talking to get passed on to my NEA providers by my Jobcentre adviser. Your not allowed to trade in anyway until you have signed off benefits and signed up to NEA payments. Dont get caught out with this one!

As for the NEA provider/mentor not knowing the answers to your questions. You can work as many hours as you wish to work once you have signed off benefits. You can also work less than 16 hours per week in employment but not in your business to still gain benefits until your ready to sign off benefits and sign up for NEA payments once your business plan is passed.

Once you are on NEA payments. You need to be able to show that you are working on your business to carry on getting the NEA payments. By working on. I mean trading. From everything i,ve been told and read. You will get called in 2 or 3 times in the 6 months to speak to someone from JCP to confirm that you are complying with the terms and conditions of the NEA scheme. I would expect this to mean working at least 16 hours per week but could be more. Again, its your JCP adiser who can answer that question as they deal with the payment side of NEA. Its likely to be similar to the hours needed to be entitled to Working Tax Credits.

To be entitled to Working Tax Credits. Check this out http://www.hmrc.gov.uk/taxcredits/start/who-qualifies/workingtaxcredit/work.htm#1

JCP back office are the only people who can tell you if you have to pay any money back for earnings while claiming benefits. NEA mentors cannot tell you the answers to these type of questions. Talk to your jobcente adviser or say nothing and hope they miss the over payments. Not sure JCP can take over-payments from NEA payments. However, if you ever sign on benefits again. They will then take the owed money back out of your unemployment benefits.

As for your housing benefit questions. Do a better off calculation on-line. This will show you how much housing benefit you will get if your earning £100 from your business each week. Do the calculation again with different figures earnt to learn how much Housing Benefit you get depending on what you earn. Everything depends on your personal situation. Its something that your NEA mentor is unlikely to be able to know the answers too. Your JCP adviser can do various better off calculations with you. Thats their job but easy enough to do yourself with the on-line better off calculators!

Everything you earn needs to be declared in full. Make sure you keep very good records of all work done or sales. If you dont and Housing Benefit and HMRC request your records. You could end up in very big trouble with the law. Time behind bars and massive fines are simple not worth the risk.

bradqwer

Ive briefly skimmed this thread does anyone have an official link to the scheme itself im on JSA and in the west yorkshire are and would be interested

TrueBlue1965

Not much information available on NEA on the web. The offical DWP website for NEA is http://www.dwp.gov.uk/adviser/updates/enterprise-allowance-campaign/

This thread has more information and is more up to date than anywhere else on the web.