Made redundant - may move to a contract job (as a limited company)

[Guest116]

Hi,

If someone is made redundant from a permanent job then they can go and claim some sort of job seekers allowance (social welfare).

What happens to those entitlements if the person then takes up a contract and set ups their own limited company. A lot of contract positions require you to set up a limited company rather than being employed directly by the client.

It is a fixed 6 month contract, so can the person go back to claiming social welfare if needs be after the contract finishes?

 

[raven]

Hi,

If someone is made redundant from a permanent job then they can go and claim some sort of job seekers allowance (social welfare).

What happens to those entitlements if the person then takes up a contract and set ups their own limited company. A lot of contract positions require you to set up a limited company rather than being employed directly by the client.

It is a fixed 6 month contract, so can the person go back to claiming social welfare if needs be after the contract finishes?

When you leave a permanent job, you are entitled to "Unemployment Benefit". This is different from "Unemployment Assistance" (aka the Dole) in that it is derived from your PRSI contributions and is NOT means tested. You are entitled to it for a certain amount of time based on your PRSI contributions, then you must go on Unemployment Assistance (which is means tested).

Unemployment Assistance is means tested. You are only entitled to Unemployment Assistance if you were previously self employed. Basically, the upshot is that you would be means tested, so if you have a fair bit of money in the bank and a niceish car etc. you won't get a bean. You may need to live on your savings if you have any. The big difference here is the means test.

At least the above is my understanding, someone else may be able to confirm