Self-Employment Assistance

The self-employment assistance program began as part of the Middle Class Tax Relief and Job Act. Collecting unemployment while self-employed allows jobless people to create jobs through starting their own small businesses.

This self-employed unemployment program offers dislocated workers the chance to obtain early re-employment by becoming self-employed. Participants receive a weekly self employed unemployment benefit payment while they work to get their businesses started. Although assistance for self-employed workers is only available in a few states, it can be of great benefit to entrepreneurs. Review the following sections to learn more about UI benefits for self-employed workers, how to apply and which states currently offer this option for dislocated workers.

Self-Employment Assistance Benefits

The United States Department of Labor (DOL) and the United States Small Business Administration (SBA) joined forces to offer the self-employment assistance program to states that wish to participate. Self-employment assistance is a voluntary program, but currently only the following states participate:

  • Delaware
  • Mississippi
  • New Hampshire
  • New York
  • Oregon

The state workforce agency in each of these states administers the self-employment assistance program to dislocated workers living there. Participants collecting unemployment while self-employed and starting their own business receive the same allowance they would get with regular unemployment insurance benefits. However, collecting unemployment does not come with the same job-hunting work requirements. Workers in the program can focus full-time on building their own businesses because they are receiving financial aid for up to 26 weeks.

Related Article: Receiving and Using Unemployment Benefits

In addition to receiving monetary benefits, self-employment assistance recipients have access to a website that has extensive SBA resources to support new entrepreneurs. These self-employment assistance courses not only teach participants how to build a business from scratch, they also benefit others by creating jobs for other unemployed individuals. This SBA toolkit provides the following lessons, and more:

  • How to prepare a business plan
  • Franchising basics
  • Green business opportunities
  • Government contracting
  • Finding money to start a business
  • Entrepreneurship and business planning
  • Entrepreneurial marketing
  • Technology and business
  • Tax literacy

Self-Employment Assistance Eligibility Requirements

Self-employment assistance eligibility requirements can vary by state. However, a primary requirement to apply for this type of assistance applies in all participating states. Petitioners for these benefits must first be eligible to obtain regular unemployment insurance (UI) benefits according to state law and be receiving these benefits. If an unemployed petitioner does not qualify for regular UI benefits, they will not qualify for assistance either.

Qualifying for unemployment insurance for self-employed workers involves submitting an application and waiting for approval. Workers permanently laid off by their previous employers and identified as likely to use up regular employment benefits are good candidates for unemployment. These candidates for assistance are usually identified through their state’s profiling system.

Self-employment assistance program participants must also have a solid business idea, be able to work full-time developing the business and the money to start and sustain the business until it becomes self-supporting. Women receiving assistance also have access to women’s business ownership representatives to get help with the issues unique to women business holders.

Applicants are also eligible for the self-employment assistance program while fully engaged in business-building activities. These self-employment activities include business counseling, entrepreneurial training and receiving technical assistance. Note that collecting unemployment while self-employed is a one-time privilege; you cannot participate in the program more than once.

How to Apply for Self-Employment Assistance

If you lose your job and decide to pursue your self-employment dreams, the self-employment assistance program can provide financial stability while you are working to get your business off the ground. You should contact your state unemployment insurance office as soon as possible after losing your job. Even though the current states providing self-employed assistance are listed above, it is always worth asking when you apply for UI benefits if this program is available. The DOL expects more states to take advantage of the self-employment assistance program to help its workers and the economy.

Each state offers a different process for submitting unemployment insurance claims, including applications for the assistance program. Most states offer at least two of the following options for submitting any type of UI claim:

  • In Person: Visit your state’s unemployment benefits office and request a self-employment assistance program Complete and submit the application.
  • By Mail: Visit your state’s unemployment benefits website and search for a printable self-employment assistance Print the document, add any requested supporting documentation and send everything to the address printed on the form.
  • By Phone: Call your state’s unemployment benefits office. Ask the clerk if phoned-in self-employment assistance program applications are acceptable. If so, follow the clerk’s instructions for providing the necessary application information. A phone application is more convenient if you have the information from the list below on hand before you call.
  • Online: Go to your state’s unemployment benefits website and make an account if you do not already have one. Search for “collecting unemployment while self-employed.” Follow the website’s instructions for completing and submitting an unemployed insurance for self-employed workers application.

Documents Needed to Apply for Self-Employment Assistance

The types of documents you need to apply for self-employment assistance are similar to the documents needed to request other types of unemployment insurance benefits. Specific documents needed to file a claim for self-employment assistance program benefits may vary by state, most will require the following information:

  • Social Security Number (SSN)
  • Your full name, address and driver’s license number
  • Alien Registration number (for those who are not a United States citizen or national)
  • Your last employer’s business name, address and phone number
  • The dates that you worked for your last employer, including month, day and year
  • Your rate of pay and the number of hours you worked each week
  • Tax documents verifying your earnings (usually only required if you worked as an independent contractor or were otherwise self-employed)
  • If you served in the military during the most recent 18 months, provide your military employment start and end dates and a copy of your DD-214

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