How many self-employed are making less than minimum wage / dole ?

jimmmy · 10-12-2009 4:29pm #1

There are a lot of self employed people who are finding business so bad that , after paying overheads and materials etc, their earnings are little or nothing, certainly less than they would get on the dole. However, if they have been working for a decade or two and worked hard and saved prudently, the chances are many have a bit of saving put away for a rainy day / old age, or a partner working, or a property ( even if its in negative equity ).....and they cannot get any unemployment benefit of assistance or dole. Its not just self employed from the building sector ( architects, tradesmen etc ) who are affected - many other self employed in different lines of business have found that trade has dried up too, as people either hang on to their money or shop up north. Some I know have been living off savings ...others off partners income. All try to put on a brave face to the public as they have to project a positive image ...nobody wants to admit defeat.....nobody wants to do business with a loser. If someone says business is quiet, people think its because the product or service is poor, so self employed generally do not go around saying they are unsuccessful. The question is - how long can people continue living off their partners earnings, or their retirement / rainyday savings / accumulated assets ? How many tens of thousands are affected ? Its what they never tell people before you become self-employed ....you cannot get state benefits ( unless you are or become down + out / have no assets ).

Xiney · 11-12-2009 1:36pm

There are costs and benefits to every decision.

The benefits of being Self-Employed include the vast number of things you can write off for tax. Travel to and from jobs. Parking at a job site. A laptop for your home office. Hell, even all the furniture in your home office. etc.

Also, when the economy is good, and business is doing well, your earnings are in direct proportion to how hard you work and how good you are at your work (and at marketing it etc.) This is instant and does not depend on some manager recognizing it and going through the trouble of getting you a bonus.

A self employed person usually pays S-Class PRSI. This is PRSI at a lower rate that does not entitle the person to Jobseeker's Benefit. If they want, they CAN pay Class A PRSI at the higher rate, nothing is stopping them from doing so. If they do so they will qualify for Jobseeker's Benefit in the event that they need it. A person working in a company MUST pay Class A PRSI, they have no choice in the matter. Sounds to me like if you end up paying Class S and then complain about not being eligible for JSB... you should have done more research into the eventuality that you require JSB.

Even if you pay S-Class PRSI, you are still entitled to Jobseeker's Allowance. This is the payment that does not rely on "stamps" but rather is based on your means. If you are only working a bit, you can apply for part time Jobseeker's Allowance. If you are over the means test limit you are no different from thousands of people who don't have enough PRSI contributions in the relevant tax year - people who were students that year for example, though they may have been in jobs for 10 years previous.

(Note: since PRSI got wiped out in Wednesday's budget I'm not sure what the new system will be like but I'm sure it'll just be a combination of all the various payments, and there will be seperate classes as before)

Anyway, in either case, the system is more fair than you're making it out to be.

Rmmb · 11-12-2009 2:10pm

I disagree, the system is NOT fair, i have been self employed for the last 3 years and have effectively worked myself into the ground, i am forced to close at the end of December due to the affect the recession has on my business, i went from employing 4 part time staff to 1 and i have let her go a few weeks ago, i work 70-75 hours per week and last week i had €50 to take home for the week to live off, i am exhausted in every manner possible, my heart is broken and my dreams shattered, i went into the social welfare and a foreign guy already claiming dole was ahead of me with his wife and toddler who recently relocated to ireland enquiring what they were entitled to which was quite a lot, i was seen next and told i will be lucky to get anything, i rent a house and am under threat of eviction as i cannot pay my bills, so it is certainly not a fair counrty to self employed people who try and make something of their lives and help create employment. I am left with large debt and no means of paying it!!:mad:

Xiney · 11-12-2009 2:55pm

Sorry to hear about your business - it's tough out there right now.

However, if you are winding down your business and have no other means you will be entitled to Jobseeker's Allowance.

jimmmy · 11-12-2009 3:52pm

Xiney wrote: »

The benefits of being Self-Employed include the vast number of things you can write off for tax. Travel to and from jobs. Parking at a job site. A laptop for your home office. Hell, even all the furniture in your home office. etc.

Only expenses "wholly and necessarily" incurred in the work can be used as a tax deductible expense. A laptop for home use cannot be claimed, and if the self employed works from a premises ( eg a small shop ) then travel to and from it, parking etc cannot be claimed. Which is the way it should be.

Xiney wrote: »

Also, when the economy is good, and business is doing well, your earnings are in direct proportion to how hard you work and how good you are at your work (and at marketing it etc.)

True, but there are only so many hours in a day / days in a week, and often someone else can do the job cheaper. During the Celtic tiger there was a large influx of migrants to compete with, tens of thousands of bright people who would work 100 hours a week for the minimum wage, and in manufacting most countries elsewhere are much cheaper to make things in, so many people did not make the big money during the celtic tiger you may think they did.

Xiney wrote: »

A self employed person usually pays S-Class PRSI. This is PRSI at a lower rate that does not entitle the person to Jobseeker's Benefit. If they want, they CAN pay Class A PRSI at the higher rate, nothing is stopping them from doing so. If they do so they will qualify for Jobseeker's Benefit in the event that they need it.

I know quite a few self employed and none of their accountants concerned ever said people could pay Class A PRSI at the higher rate.

Xiney wrote: »

Even if you pay S-Class PRSI, you are still entitled to Jobseeker's Allowance. This is the payment that does not rely on "stamps" but rather is based on your means.

Correct, its means tested, so if you have a partner working, or a bit of property you inherited or worked for, or have worked a few decades and have saved for your retirement even a fifteenth of what a retiring Garda pension pot is worth, you get nothing.

There must be tens of thousands of self employed people now in the country at least, who find themselves eating through / losing whatever savings they earned and worked 70 hours a week for over the past few decades.

soden12 · 11-12-2009 3:59pm

When it comes to tax I'm sure many self-employed people are earning close to minimum wage after they've offset their SUVs, their multiple holidays homes, their Plasma TVs, their jacuzzis and so-on.

Self-employed are supposed to be dynamic entrepreneurs and go-getters but yet they cream it in during the good times, pay sweet-all tax, screw their employees and then moan when the lean times come and expect the taxpayer to bail them out.

Well boys and gals - sell off one of your many properties and quit moaning. Maybe drop the golf-club membership as well or is it still needed to "network" with your banker buddies ?

Tazz T · 11-12-2009 4:00pm

I'm in real trouble myself. Savings all gone. No money for Xmas. I've never been so skint. Just keep thinking something will pop up.

Xiney · 11-12-2009 4:21pm

jimmmy wrote: »

Only expenses "wholly and necessarily" incurred in the work can be used as a tax deductible expense. A laptop for home use cannot be claimed, and if the self employed works from a premises ( eg a small shop ) then travel to and from it, parking etc cannot be claimed. Which is the way it should be.

Yes - but a laptop used in a home office capacity (to do invoices, to research, to do your books) can be. You're then free to bring it into the living room and watch youtube videos all evening if you like. Also, you can deduct the cost of your broadband connection, mobile etc, if you can prove they are necessary for business use. Particularly if you didn't have broadband before you started your business. There are plenty of other examples.

jimmmy wrote: »

True, but there are only so many hours in a day / days in a week, and often someone else can do the job cheaper. During the Celtic tiger there was a large influx of migrants to compete with, tens of thousands of bright people who would work 100 hours a week for the minimum wage, and in manufacting most countries elsewhere are much cheaper to make things in, so many people did not make the big money during the celtic tiger you may think they did.

Absolutely. And for years Irish people were the cheap hire migrants in other countries. Just because things were good in Ireland for a while doesn't mean everyone here was suddenly entitled to a golden lifestyle.

jimmmy wrote: »

I know quite a few self employed and none of their accountants concerned ever said people could pay Class A PRSI at the higher rate.

They probably never asked their accountants about it.

jimmmy wrote: »

Correct, its means tested, so if you have a partner working, or a bit of property you inherited or worked for, or have worked a few decades and have saved for your retirement even a fifteenth of what a retiring Garda pension pot is worth, you get nothing.

There are plenty of people with employed partners whose JSB has ended because their unemployment has outlasted it. They are in no different a situation.

You are allowed have up to 20 grand before they start counting it as means. In order to be considered to have absolutely too much money in savings to get JSA, you would need 79,000 euro in savings, shares or assets (that's with the new rate of 196 euro per week, it used to be 82,000 euro saved)

jimmmy wrote: »

There must be tens of thousands of self employed people now in the country at least, who find themselves eating through / losing whatever savings they earned and worked 70 hours a week for over the past few decades.

And I'd wager there are plenty of unemployed people who were not self employed who are in the exact same situation of burning through their savings.

I'm not saying it's not hard. I'm saying it's hard for everyone.

Tough times · 11-12-2009 4:28pm

I’ve worked hard over the last 10 years building up a business. Those that used my services for various reasons have gone broke or can not pay anymore. In some cases I’ve continued to provide a service so they can keep going and continue to pay their employees, tax man etc.

However, at this time I have nothing to show for all the years of work, savings are gone and I will probably have to look for a small loan from Relatives to keep my head above water over the next 12 months.

There are some that did very well during the Celtic Tiger years, Self employed people, Civil Servants and employees. Now that the party has come to an end It does appear that the Self employed could lose out more than anyone else.

You can mock all you want, but if you break these people, you break the country. Once burned they won’t take a chance again in the future, if they don’t create jobs, who will?

I’ve paid huge amounts of Tax over the last few years. If I had lived elsewhere, I would have paid less and would have had more to invest now when it’s needed the most.

Luckily I didn’t buy into the property bubble scam and I’m debt free as such. I plan to relaunch a business sometime late in 2010, but it won’t be here, This business will provide jobs to others and A healthy amount of tax to the country I go to but will allow me to keep more. I know several self employed people that are planning the same.

There will be future bumps on the economic road, if Ireland isn’t prepared to look after me, why should I try to look after Ireland!

jimmmy · 11-12-2009 5:21pm

Tough times wrote: »

I’ve worked hard over the last 10 years building up a business. Those that used my services for various reasons have gone broke or can not pay anymore. In some cases I’ve continued to provide a service so they can keep going and continue to pay their employees, tax man etc.

However, at this time I have nothing to show for all the years of work, savings are gone and I will probably have to look for a small loan from Relatives to keep my head above water over the next 12 months.

There are plenty of others in the same boat as yourself.

Tough times wrote: »

You can mock all you want, but if you break these people, you break the country. Once burned they won’t take a chance again in the future, if they don’t create jobs, who will?

Excellent point.

Tough times wrote: »

I’ve paid huge amounts of Tax over the last few years. If I had lived elsewhere, I would have paid less and would have had more to invest now when it’s needed the most.

I do not doubt it.

Tough times wrote: »

Luckily I didn’t buy into the property bubble scam and I’m debt free as such. I plan to relaunch a business sometime late in 2010, but it won’t be here,

You are lucky you do not have property which is in negative equity, and which ties you to the place, along with family. My advice to any young hard working person who can create a job for themselves, is do it elsewhere, and support another tax system. Do not work 80 hours a week during the good times to lose literally it all in the bad times, or take risks in this country.

soden12 · 11-12-2009 6:53pm

Gee the loss of the self-employed will be a terrible blow.

Fewer tradesmen to not turn up at the appointed time, fewer developers scarring the countryside.

I'll wait for the next revenue defaulters list and we'll see if the number of self-employed has really fallen - after all they only pay tax when caught.

Rmmb · 11-12-2009 7:03pm

Well done tough times on surviving, you have said it all because i am now a broken person, once driven with ambition not desolate and destitute. Tazz i feel for you, i have tried everything in the last 6 months to turn around my gym business but unfortunately people just have no money anymore to join what they deem a luxury. Soden 12 i have no holiday home or indeed even my own home, i live in a rented house which i am in danger of being evicted from, i don't own a plasma or an suv so i think you a have preconceived idea of what being in self employment is like, when you are the boss you are responsible for everyone from staff to clients, everyone including the revenue get paid before you, sure you can schedule days off but you have to be available to cover when staff are ill, when you are away from your business you are never really off as it is a constant concern, i don't know what self employed people you know but the ones i know are struggling and fighting just to hold on to what was once their dream, mine which has now become a nightmare!! If we didn't have self employed people who would employ the workers in the country....i doubt the government has public sector jobs for the population!

Builderfromhell · 11-12-2009 8:12pm

The self employed and countries business people can expect two things;

1. Penalised with taxes if they are very profitable.

2. Punished with tax bills, debt collectors, court judgements, jail if they fail.

Ireland rewards the wasters - those who choose a life on Socail and punishes those who have a go at being self employed. You are up against a huge amount of bureaucracy, rules and regulations.

I was self employed for past 7 years and like those above I am in serious financila trouble. It is not in my nature to turn to S/W as a life support. No future in that.

Most self employed people I know are angry with the injustice of it all. We worked hard for years and have no support now that things are gone bad.

Dilynnio · 11-12-2009 8:22pm

soden12 wrote: »

When it comes to tax I'm sure many self-employed people are earning close to minimum wage after they've offset their SUVs, their multiple holidays homes, their Plasma TVs, their jacuzzis and so-on.

Self-employed are supposed to be dynamic entrepreneurs and go-getters but yet they cream it in during the good times, pay sweet-all tax, screw their employees and then moan when the lean times come and expect the taxpayer to bail them out.

Well boys and gals - sell off one of your many properties and quit moaning. Maybe drop the golf-club membership as well or is it still needed to "network" with your banker buddies ?

Some little bhoy has a major chip on his shoulder!

Bet you tried to have it all as self-employed but failed miserably!

I congratulate the self employed........respect is due to them, they go out and be creative and develop a business that is lucrative!They work long hours, and make a lot of self sacrifices. Anyone who wants to be an entrepreneur and be their own boss are amazing people. Less face it who wants to work for anyone in this country and pay the taxes that they do!

If only more people had this determination and drive.

Dilynnio · 11-12-2009 8:24pm

Builderfromhell wrote: »

The self employed and countries business people can expect two things;

1. Penalised with taxes if they are very profitable.

2. Punished with tax bills, debt collectors, court judgements, jail if they fail.

Ireland rewards the wasters - those who choose a life on Socail and punishes those who have a go at being self employed. You are up against a huge amount of bureaucracy, rules and regulations.

I was self employed for past 7 years and like those above I am in serious financila trouble. It is not in my nature to turn to S/W as a life support. No future in that.

Most self employed people I know are angry with the injustice of it all. We worked hard for years and have no support now that things are gone bad.

I have to agree with you!

Tough times · 11-12-2009 8:24pm

soden12 wrote: »

Gee the loss of the self-employed will be a terrible blow.

Fewer tradesmen to not turn up at the appointed time, fewer developers scarring the countryside.

I'll wait for the next revenue defaulters list and we'll see if the number of self-employed has really fallen - after all they only pay tax when caught.

Soden12, Glancing at other posts you seem to be angry at everyone and everything. If the self employed go the country's finished. People like yourself (who are negative to say the least!) will be the only one's left in the country.

Dilynnio · 11-12-2009 8:29pm

Tough times wrote: »

Soden12, Glancing at other posts you seem to be angry at everyone and everything. If the self employed go the country's finished. People like yourself (who are negative to say the least!) will be the only one's left in the country.

Well said!

It really annoys me when the uneducated bang on about the self employed!

They obviously haven't got a clue!

cee_jay · 11-12-2009 8:32pm

soden12 wrote: »

When it comes to tax I'm sure many self-employed people are earning close to minimum wage after they've offset their SUVs, their multiple holidays homes, their Plasma TVs, their jacuzzis and so-on.

Self-employed are supposed to be dynamic entrepreneurs and go-getters but yet they cream it in during the good times, pay sweet-all tax, screw their employees and then moan when the lean times come and expect the taxpayer to bail them out.

Well boys and gals - sell off one of your many properties and quit moaning. Maybe drop the golf-club membership as well or is it still needed to "network" with your banker buddies ?

soden12, infracted. Just a light warning guys to keep the posts on topic and helpful to original topic.

soden12 · 11-12-2009 9:53pm

The OP ( jimmmy ) only posted here because he's banned from the Irish Economy forum for having two accounts.

This isn't actually a genuine question about state benefits - it's another whingefest. If they can whinge then so can I.

sunnyside · 12-12-2009 12:04am

Xiney wrote: »

You are allowed have up to 20 grand before they start counting it as means. In order to be considered to have absolutely too much money in savings to get JSA, you would need 79,000 euro in savings, shares or assets (that's with the new rate of 196 euro per week, it used to be 82,000 euro saved)

.

So if somebody owned a house, even a delapitated one they couldn't live in they couldn't get Jobseekers allowance? That doesn't make sense. There are loads of people on welfare who live in houses they inherited from grandparents, etc. They might own the house but not have any cash to buy food.

Rmmb wrote: »

I disagree, the system is NOT fair, i have been self employed for the last 3 years and have effectively worked myself into the ground, i am forced to close at the end of December due to the affect the recession has on my business, i went from employing 4 part time staff to 1 and i have let her go a few weeks ago, i work 70-75 hours per week and last week i had €50 to take home for the week to live off, i am exhausted in every manner possible, my heart is broken and my dreams shattered, i went into the social welfare and a foreign guy already claiming dole was ahead of me with his wife and toddler who recently relocated to ireland enquiring what they were entitled to which was quite a lot, i was seen next and told i will be lucky to get anything, i rent a house and am under threat of eviction as i cannot pay my bills, so it is certainly not a fair counrty to self employed people who try and make something of their lives and help create employment. I am left with large debt and no means of paying it!!:mad:

This worries me so much, my OH has similar problems, thankfully not a tradesperson but there are weeks when he looses money. The next week he might make a lot, then the following week it's gone again. There are so many people out there living on next to nothing at the moment.

cee_jay · 12-12-2009 1:18am

soden12 wrote: »

The OP ( jimmmy ) only posted here because he's banned from the Irish Economy forum for having two accounts.

This isn't actually a genuine question about state benefits - it's another whingefest. If they can whinge then so can I.

Banned for a week, I have already issued a warning on this. Keep posts on topic please.

Rmmb · 12-12-2009 1:57pm

Totally agree with you builder from hell!!

jimmmy · 12-12-2009 2:09pm

Xiney wrote: »

A self employed person usually pays S-Class PRSI. .

Xiney wrote: »

If they want, they CAN pay Class A PRSI at the higher rate, nothing is stopping them from doing so. If they do so they will qualify for Jobseeker's Benefit in the event that they need it.

Thanks for that.
On a positive note, does anyone know is it possible for someone who paid S-class PRSI for decades to switch and now pay Class A PRSI ? Everyone I know just thought PRSI is PRSI and you paid what you were told to pay and you never had any choice in which class to pay. If someone self employed started paying class A PRSI, how long would it be before they were entitled to Jobseeker's Benefit ? An accountant was asked but he seemed unsure / did not know, and said maybe ask the relevant govt dept ; the person asking the accountant did not want to press the accountant too much / waste too much of his time, as accountancy bills ( necessary and all as they are to satisfy revenue ) are high enough as it is. Has anyone out there changed PRSI class - how easy was it to do ? Or any self employed ever given the option of paying
Class A PRSI ?

Builderfromhell · 12-12-2009 3:18pm

jimmmy wrote: »

Thanks for that.
On a positive note, does anyone know is it possible for someone who paid S-class PRSI for decades to switch and now pay Class A PRSI ? Everyone I know just thought PRSI is PRSI and you paid what you were told to pay and you never had any choice in which class to pay. If someone self employed started paying class A PRSI, how long would it be before they were entitled to Jobseeker's Benefit ? An accountant was asked but he seemed unsure / did not know, and said maybe ask the relevant govt dept ; the person asking the accountant did not want to press the accountant too much / waste too much of his time, as accountancy bills ( necessary and all as they are to satisfy revenue ) are high enough as it is. Has anyone out there changed PRSI class - how easy was it to do ? Or any self employed ever given the option of paying
Class A PRSI ?

Jimmy,
Might be wise to ask this question in a new thread. people reading the title of this topic would not expect to find such a query.

Back on Topic.
My wife and I have just completed fitting out her new business premises where we have spent about 20,000 on a business which hopefully will keep bread on the table for the next few years.
Self employed peole (that I know) tend to keep going, re-inventing themselves, adapting to survive.
Giving up and going on welfare, if available, is seldom a consideration.

That's why these people are so essential to the Irish economy.

PLIIM · 12-12-2009 3:40pm

jimmmy wrote: »

Thanks for that.
On a positive note, does anyone know is it possible for someone who paid S-class PRSI for decades to switch and now pay Class A PRSI ? Everyone I know just thought PRSI is PRSI and you paid what you were told to pay and you never had any choice in which class to pay. If someone self employed started paying class A PRSI, how long would it be before they were entitled to Jobseeker's Benefit ? An accountant was asked but he seemed unsure / did not know, and said maybe ask the relevant govt dept ; the person asking the accountant did not want to press the accountant too much / waste too much of his time, as accountancy bills ( necessary and all as they are to satisfy revenue ) are high enough as it is. Has anyone out there changed PRSI class - how easy was it to do ? Or any self employed ever given the option of paying
Class A PRSI ?

You can.
Just talk to your accountant or revenue and ask them to change it for you.
Your PRSI class a contributions only start from that point though. So whatever amount of contributions is the rule for JB needs to be counted from when you change.
tbh anyone self employed should have been doing this from the start. Saving a few pennies at the expense of insurance is a risk. Some people dont mind going uninsured, so they'll take the extra few quid. I like to be insured myself.

jimmmy · 14-12-2009 4:51pm

Does anyone know if someone self employed started paying class A PRSI, how long would it be before they were entitled to Jobseeker's Benefit ?

Amhran Nua · 14-12-2009 5:52pm

PLIIM wrote: »

Saving a few pennies at the expense of insurance is a risk

Is it not in the region of 10% of income on top of income tax and VAT payments, which for PAYE workers is paid for by the employer, not the worker? Bit more than a few pennies, I think...

PLIIM · 14-12-2009 11:07pm

Amhran Nua wrote: »

Is it not in the region of 10% of income on top of income tax and VAT payments, which for PAYE workers is paid for by the employer, not the worker? Bit more than a few pennies, I think...

Think about your state pension too. Not just the dole.

Amhran Nua · 15-12-2009 12:09am

PLIIM wrote: »

Think about your state pension too. Not just the dole.

Do you not get the state pension if you don't make the employer's contribution?

studiorat · 15-12-2009 12:28am

Put the business in suspended animation in September, barely ticking over and just covering the main bills one job a month or so. Saw it coming all last year so I decided to take a year out and go to college. Living on about €50 a week at the moment.

So I obviously would be getting more if I shut the thing down all together and signed on. But I had to deal with those fcukers about 10 years ago. The woman who came out to means test me started complaining about how much she hated dealing with self employed cases. So I told her I didn't want to hear some jobs worth complaining at me so I threw her out of the house on the spot.

If I do ever have to go on the dole again I'll tell them I'm a junkie and they'll roll out the red carpet.

cee_jay · 15-12-2009 10:00pm

studiorat wrote: »

Put the business in suspended animation in September, barely ticking over and just covering the main bills one job a month or so. Saw it coming all last year so I decided to take a year out and go to college. Living on about €50 a week at the moment.

So I obviously would be getting more if I shut the thing down all together and signed on. But I had to deal with those fcukers about 10 years ago. The woman who came out to means test me started complaining about how much she hated dealing with self employed cases. So I told her I didn't want to hear some jobs worth complaining at me so I threw her out of the house on the spot.

If I do ever have to go on the dole again I'll tell them I'm a junkie and they'll roll out the red carpet.

Please refrain from comments like the above - infracted.

How many self-employed are making less than minimum wage / dole ?

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