Paymentshield - Company Directors: Advice Please

JayS_3

Does anyone have any advice about this, please?

We have mortgage protection for unemployment with Paymentshield based on my husband.

He has a full time job so, therefore, is an employee which complies with Paymentshield's requirements.

However, he is thinking about starting a small business around his hobby, which will have to be limited due to liability etc. The effect of this is he will then be a 'company director'. Which does not comply with Paymentshield's requirements.

Essentially, to claim from Paymentshield in event of unemployment, you have to sign-on at the Job Centre (which also protects NI contributions).

Does anyone know if you can sign on when classed as a company director, if the business is not getting any work/contracts etc?

Does anyone know the limits a company director can have, share wise, in his own company in order to still be able to claim from Paymentshield if made unemployed from the main source of income?

Thanks for any help.
JayS

scottishlizzie

I would be interested to know the answer to this too as I am about to be made redundant from my main employment but I am also the director of my own limited company which was set up purely as a way of getting round the IR35 rules. While I have been employed I have also done a bit of freelance work through the company. I will want to claim on my redundancy insurance and like the other poster will have to claim JSA. Can I actually do this or will I have to wind the company up too?

dunstonh

I dont know and i doubt anyone here does (unless one of the benefits office employees happens to read this thread).

I would "guess" that the answer would be that JSA claim would fail as you would still be employed as a director. Therefore, the knock on effect would be that any ASU claim would fail as well.

I think the only way to find out for sure is to contact the DSS.

scottishlizzie

As it happens my brother works for the benefits agency so I will see if this falls into his area and let you know.

WHA

I've had clients who have successfully claimed JSA with just a P45 from their own company, which carried on in existence. Other clients have been denied JSA. Some clients have been forced to show their company accounts and bank statements to prove the company had no income/assets and in one case, the only way to get JSA was to wind-up the company. Repeated requests for "chapter and verse" to the DSS by our clients and ourselves have been answered vaguely. It does appear to be down to between yourself and the DSS office to make them believe that you really are unemployed and your company is dormant.

As to any form of private redundancy cover etc., some of the policy small print I have seen make it clear that it is only redundancy from an unconnected employer that triggers the payouts - many have clauses preventing self employment (of which your own company may be regarded), voluntary redundancy and redundancy from "related" employments, i.e. family owned companies etc. Some have clauses specifying that the redundancy must not be the result of your own actions - if you are employed by your own company, it is arguable that you have made yourself redundant, so no payout! I would check your small print very carefully and maybe ask them in writing. If it won't cover you, you probably need to cancel it so you don't waste money on the premiums.

Personally, I have a general mortgage protection policy, to cover mortgage repayments in case of redundancy, disability etc. I know that it wont cover redundancy anymore as I am a director of my own Ltd Co., but I keep it going because of the disability/incapacity cover which is cheaper than taking on a new policy.

scottishlizzie

Very useful WHA - thanks.

JayS_3

Thank you WHA, I think you have put into words just what I suspected. I think we need to read the small print. Our policy is only for redundancy, as my husband is covered for disability/sickness through his real job.

Regards
JayS