Coming off social welfare to start a business feels like jumping without a safety net. The bills don't pause while you find your first customers. The Back to Work Enterprise Allowance scheme helps people on certain social welfare payments become self-employed without losing their income overnight.
In plain terms: if you qualify for the Back to Work Enterprise Allowance you can keep 100% of your existing payment in year one and 75% in year two, for a maximum of 2 years, while you build the business.
What is the Back to Work Enterprise Allowance and who is it for?
The BTWEA is a weekly payment from the Department of Social Protection for people aged under 66 who have been on a qualifying payment for a set period and want to start their own business. It's for self-employment only; taking a job as an employee doesn't count.
Don't confuse it with its sibling scheme. The Short-Term Enterprise Allowance is paid instead to people on Jobseeker's Benefit who want to start trading straight away, with no nine-month wait. See our guide to the Short-Term Enterprise Allowance (STEA). If you're weighing up whether trading at all will affect your claim, read our piece on claiming unemployment while setting up a business first.
How much is the Back to Work Enterprise Allowance?
Your rate of payment is based on the social welfare payment you already receive, including increases for a qualified adult and qualified children. According to Citizens Information, you keep 100% of that amount for the first year and 75% for the second year.
The Back to Work Enterprise Allowance is paid weekly into your bank account. The allowance cannot be paid into a mortgage account. You don't pay income tax, PRSI or USC on the allowance itself, though anything the business earns is taxable in the normal way. Worth reading up on PRSI as a sole trader before your first year's accounts come around.
What social welfare payments qualify for BTWEA?
To qualify for the Back to Work Enterprise Allowance you must be setting up as self-employed in a new business that has been approved in advance, in writing, and you must have been getting a qualifying social welfare payment for the required qualifying period. The main routes are:
|
Qualifying payment |
Minimum time on the payment |
|
Jobseeker's Allowance, or Jobseeker's Benefit with an underlying entitlement to Jobseeker's Allowance |
9 months (234 days) continuously |
|
One-Parent Family Payment, Jobseeker's Transitional payment, Disability Allowance, Blind Pension, full-rate Carer's Allowance (where caring has stopped), Farm Assist, Invalidity Pension and certain other payments |
9 months continuously |
|
Illness Benefit |
3 of the last 5 years on a qualifying payment |
On Farm Assist, the new venture can't relate to the farm holding. If you were recently released from prison, time spent in prison can count towards the qualifying period, provided you establish an entitlement to a relevant social welfare payment first. Time on the COVID-19 Pandemic Unemployment Payment, Community Employment and Tús can count too. And if your claim is based on One-Parent Family Payment or Carer's Allowance, you can't later add an increase for a qualified adult.
Confirm your exact payment type and dates with your Intreo Centre before you build plans on it.
How do you apply for the Back to Work Enterprise Allowance?
The application runs through your local Intreo Centre or social welfare branch office, not through Revenue. The steps:
- Meet the Employment Personal Adviser (formerly called a Case Officer) to talk through your business proposal.
- Complete application form BTW 2 and return it to the same office.
- You may then be referred to your Local Development Company, which assesses whether the business is viable. A realistic business plan with costs, pricing and projected sales does most of the heavy lifting here.
- Wait for written approval from the Department of Social Protection. Do not start trading before you have it.
- Once approved under the BTWEA scheme, register as self-employed with the Revenue Commissioners and start within 12 weeks of the approval date.
Our walkthrough on how to register for tax in Ireland covers what happens after approval.
What other supports can you get while on BTWEA?
The weekly payment isn't the only help on the table:
- The Enterprise Support Grant can pay up to €2,500 in any 24-month period towards start-up costs such as equipment and insurance, once you're approved for BTWEA and put in a matching contribution of at least 10%.
- Your Local Enterprise Office runs mentoring and a start your own business course, both useful when you're drafting the plan.
- Extra benefits like Fuel Allowance and the medical card can continue while you satisfy the means test.
Employment grants from a Local Enterprise Office or partnership don't affect your entitlement either. For the wider funding picture, see who qualifies for government grants to support new business.
What rules apply while you're getting BTWEA?
While you're getting the Back to Work Enterprise Allowance, you must stick to self-employment. Taking paid work as an employee, full-time or part-time, isn't allowed. If the business closes or your circumstances change, tell the Department immediately.
Refusals happen, usually over viability or the qualifying period. Because it's an administrative scheme, you can't appeal to the Social Welfare Appeals Office, but if you believe you've been wrongly refused the allowance you can ask the Department to review the decision.
Frequently asked questions about BTWEA
Can I start trading before my application is approved?
No. Trading before written approval can disqualify you, since the scheme only covers businesses approved in advance.
Can I use BTWEA to buy or take over an existing business?
Generally no. The scheme supports new ventures, not the continuation of an existing business, per the rules that also govern the STEA.
What happens if my business doesn't work out?
Contact your Intreo Centre as early as possible. Depending on your circumstances you may be able to return to a social welfare payment.
Can I get BTWEA more than once?
Yes. If you've used up your entitlement, you can take part again after at least 5 years.
What should you do next?
Check your payment qualifies, count your days, and start the business plan before you sit down with the adviser. When approval lands, the books need to be right from day one: registration, invoicing, expenses. That part is what we do, so get in touch today and book a consultation.
Disclaimer: This guide is for general information purposes only and does not constitute professional advice. Speak to a qualified accountant about your specific circumstances before acting on anything covered here.