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I just got laid off and a friend of mine told me that you had mentioned at some point that unemployment would pay benefits to start a business. Is that true? How do I make that happen?
Depending on your state, yes, it’s true!
Now, first, let me be clear – this is not about the CARES Act. The CARES Act was passed in March of 2020 which, in part, helped people who normally did not qualify for unemployment: Independent Contractors, Small Business Owners, and the Self-Employed, receive financial assistance during COVID.
Usually, people who work for themselves do not pay into the unemployment system, therefore they cannot collect benefits when they get laid off. The CARES Act brought relief to those who fell into this category by allowing them to collect benefits based off of their self-employment earnings.
But, that’s not what this article is about!
If you are receiving unemployment benefits, you usually have to fulfill job search requirements. In some states, you can instead enroll in a retraining program, or entrepreneurial program. You will still receive your benefits as long as you meet the requirements of your program.
The federal government recognized the trend of increasing self-employment, by passing a $35 million Self-Employment Assistance Program (SEAP) that was tucked into the payroll tax-unemployment extension bill passed in March of 2012.
The federal government set aside $35 million for states to implement a SEAP program and help unemployed become their own boss and start their own small business. Under the SEAP program, unemployed workers will be able to receive or maintain their unemployment insurance benefits while they start their own small businesses – a full-time job in its own right – without having to look for other full-time work. Currently, these programs are available in New Jersey, Oregon, and Washington State. California is working towards implementing such a program.
Washington’s program requires that the participant meets the following conditions:
- Qualify for regular unemployment benefits.
- Enroll in a training program that is approved by the Employment Security Department’s commissioner.
- Be identified as likely to run out of benefits or be eligible for Commissioner-Approved Training (CAT).
There may be additional requirements to remain in the program such as income levels, weekly progress reports, or required training. For more information on Washington’s program, visit the Employment Security Department’s website.
If you’re not sure if your state has a SEAP program, contact your local unemployment office for information. Many states are trying to implement programs and need the support of the community to get it started.
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