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Question about Self employment and benefits

  • 16-10-2012 10:43am
    #1
    physter
    Registered Users, Registered Users 2 Posts: 121 ✭✭


    I've been offered a daily rate contract role for 6 months. I'm looking at this as a stop gap solution until I find a permanent position somewhere. Does accepting this role and declaring as self-employed stop me from collecting benefits such as jobs seekers benefit in the future? Even when I finish this contract and am seeking permanent positions?

    Thanks for your help guys.


Comments

  • #2
    Mrs OBumble
    Registered Users, Registered Users 2 Posts: 26,294 ✭✭✭✭Mrs OBumble


    Potentially yes - it can mean that you don't have enough Class A credits for a relevant tax year, which is one of the conditions of getting JSB.

    An option is using an umbrella company that treats you as its own employee. Effectively you pay them a margin and the employer PRSI out of your daily rate, and they deduct employee PRSI and PAYE etc before paying your the rest. More expensive if you're contracting long term, but good for shorter stints.


  • #3
    physter
    Registered Users, Registered Users 2 Posts: 121 ✭✭physter


    Mrs OBumble wrote: »
    An option is using an umbrella company that treats you as its own employee. Effectively you pay them a margin and the employer PRSI out of your daily rate, and they deduct employee PRSI and PAYE etc before paying your the rest. More expensive if you're contracting long term, but good for shorter stints.

    That could be a good option. Thanks for your help :)


  • #4
    rat_race
    Registered Users, Registered Users 2 Posts: 990 ✭✭✭rat_race


    physter wrote: »
    That could be a good option. Thanks for your help :)

    You'd still be eligible for job seekers allowance, regardless of what you've paid this year...right?

    I'm going into contracting intentionally just to earn more cash. Not setting up umbrella company, seems like a pain in the arse!

    Would love to know how you get on though.


  • #5
    shoegirl
    Registered Users, Registered Users 2 Posts: 2,029 ✭✭✭shoegirl


    I've been on daily rate for over 2 years. The problem is that you lose the automatic entitlement to JSA after about 2 years, but I believe they will take into account any employees PRSI/ USC you've paid in the last 5 years.

    As a result, you would be means tested, and this can be slow, but unless you have other sources of income, investments or properties, etc, only savings above 20k (and how many people have that nowadays?) start to become a problem.

    The reason I stuck with it was because
    a) I got work so much faster - decisions made quickly on intuition which worked in my favour
    b) I have been paid about 50-60% more than my previous salary a good chunk of which I save
    c) Changes of environment have put me on steep learning curves that have richly improved my skills in multiple areas
    and finally, the clincher
    d) I've had no offers from permanent jobs I've applied for in the last 2 years (most were pretty shambolic) but often had to choose between 2 offers in contracting

    Some jobs are not just a few months fixed term, a lot will roll over. Some of the rates are excellent too.


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