Self-Employment Program (SEP) for PPMB and PWD

Effective: July 1, 2025

The Self-Employment Program (SEP) offers business deductions and exemptions under specific regulations. It is available only to eligible BC Employment Assistance (BCEA) recipients with Persons with Disabilities (PWD) designation or those with persistent multiple barriers (PPMB) to employment.

The ministry can accept eligible clients into SEP if they have an existing business. If they are interested in starting a new business, clients can access WorkBC Employment Services (ES) for help. Clients accepted for self-employment services through WorkBC ES may also qualify for SEP. PWD clients and their spouses, as well as PPMB clients with small businesses, can enroll in SEP. This includes those with seasonal or part-time businesses and those with larger, full-time enterprises.    

Being accepted into SEP means the ministry allows clients to use the business deductions and exemptions specified in the regulations.

Effective: July 1, 2025

The Self-Employment Program (SEP) aims to: 

• Help clients who have the Persons with Disabilities (PWD) designation or those with persistent multiple barriers to employment (PPMB) by offering business deductions and exemptions if they are self employed
• Promote independence, and a better quality of life through self-employment
• Encourage clients to work as much as they can and pursue self-employment careers that suit their capacity

Effective: July 1, 2025

The self-employment program (SEP) includes:

• Self-employment application process: this involves an overview for clients on what information is required, what is considered eligible business deductions, information on cash reserve limits, the client’s responsibilities for reporting and review of a business plan if required. PWD and PPMB clients who haven't started their businesses are encouraged to check their eligibility for WorkBC self-employment services.
• Self-employment business deductions and exemptions: clients eligible for SEP can use the deductions and exemptions. These are used to calculate SEP participants' monthly eligibility for income or disability assistance as approved by the ministry.

Effective: July 1, 2025

The Self-Employment Program (SEP) is different from the self-employment services offered by WorkBC Employment Services (ES). WorkBC ES may be available to clients with the Persons with Disabilities (PWD) designation or those with persistent multiple barriers to employment (PPMB) who need these services.

Clients who lack business experience may be encouraged to use WorkBC ES. If WorkBC determines they need case management, the service provider will assess if they need and are suitable for WorkBC self-employment services. This includes checking if the client and their business idea are suitable and helping them determine if the business is viable.

PWD and PPMB clients eligible for WorkBC ES self-employment services should discuss potential impacts on their BCEA eligibility with ministry staff before joining WorkBC ES. This ensures clients:

• Understand any potential impacts on their BCEA eligibility
• Know the ministry’s income reporting requirements
• Understand business deduction and exemption rules
• Have their eligibility for SEP business deductions and exemptions assessed

Effective: July 1, 2025

To use the Self-Employment Program (SEP) business deductions and exemptions, clients must:

• Be eligible for income or disability assistance in one of these categories:
  • Persons with Disabilities PWD
  • Spouse of a PWD client
  • Person with persistent multiple barriers (PPMB) to employment
• Have a non-incorporated business they are running for self-employment

Recipients of hardship assistance, Child in Home of Relative (CIHR), and non-PPMB spouses of PPMB clients are not eligible for SEP business deductions and exemptions.

Clients can stay in SEP as long as they:

• Are eligible for income or disability assistance
• Are eligible for SEP
• Follow SEP requirements specified in the regulations

Effective: July 1, 2025

Principal operator

In a PWD or PPMB family unit, the main person running a self-employment business can be:

• The client with the PWD designation
• The client with PPMB status
• The non-PWD spouse of a PWD client
• Both the PWD client and their spouse as co-principal operators

Additional points:

• If only one adult has PPMB status, both cannot be co-principal operators
• If both adults have PPMB status, they can be co-principal operators
• Non-PPMB spouses of PPMB clients cannot start a business under SEP

Employees

Non-PWD family members, including spouses, can work in the self-employment business as employees and be paid for their work. Their earnings must be reported on the monthly report HR0081.

Notes:

• Gross wages paid to the principal operator or any family member cannot be counted as a business expense

• The family’s earnings exemption will be applied to the reported wages, and the remaining amount will be deducted from their assistance rate

Effective: July 1, 2025

Disability assistance recipients or family units with PPMB status in the Self-Employment Program (SEP) do not need an employability plan (EP).

Effective: July 1, 2025

Policy does not support spouses with employability-related obligations as principal operators of self-employment businesses. If the spouse is the principal operator or is proposing a new business, their Employability Plan must show that self-employment is the best path into the job market.

When creating an employability plan for a spouse with employability-related obligations, ministry staff must first consider if the spouse can find a job leading through:

• WorkBC services
• Non-ministry programs like the Indigenous Skills and Employment Training (ISET) program or other options

If self-employment is the best option, spouses may be the current principal operators of a business and can use the Self-Employment Program (SEP) deductions and exemptions.

Effective: July 1, 2025

New clients

To join the Self-Employment Program (SEP), clients with self-employment earnings must complete the SEP application process before they can report their earnings under SEP, which includes:

• SEP Questionnaire and Acceptance of Terms (HR3258)
• Any other information the ministry needs to:
  • Confirm eligibility for income or disability assistance
  • Understand the client's business (e.g., business overview, estimated income, business assets, liabilities, inventory levels, etc.)

Effective July 1, 2025

Business reviews allow the ministry to examine SEP businesses in detail. The purpose is to understand if a business is growing, and to request additional information. The level of detail required depends on the business and its activity.

A business review may be requested if:

• The client's business has grown significantly (e.g., gross income increased by 50% or more since the last report) or if monthly gross income is $2000 or more
• The total value of the client's business assets exceeds $25,000. Business assets include funds in a business cash reserve account (up to $5000), business inventory, unspent business loans, and business equipment and tools
• Allowable deductions claimed exceed 25% of gross self-employment earnings. Receipts may be requested to verify deductions

Effective: July 1, 2025

To join the Self-Employment Program (SEP), you might need a business plan. This is necessary if you want to start a new business, have a business loan, or need additional funding for business assets like equipment, inventory, or home renovations. However, you don't need a business plan if:

• You have health issues that make it hard to complete a business plan
• Your business idea is simple and needs only a small amount of assets (e.g., making crafts for seasonal sales)
• Your business runs for a short time or occasionally (e.g., selling wooden toys at Christmas fairs)
• You already have a business before applying for SEP

Even if you meet these exceptions, you might still need to write a short paragraph about your business and goals to qualify for SEP. If a business plan is required, you must submit it as part of the application process to the ministry before SEP deductions and exemptions are approved.

Business plan requirements

A business plan can be simple, just describing the business idea, the product or service, and expected income and expenses. More detailed plans are needed for bigger or more complex businesses (e.g., those with employees, loans, or significant assets).

To be accepted by the ministry, a business plan must include:

• What the business does (e.g., products made, services offered, customers targeted)
• When the business is expected to start making a profit
• Expected monthly income and expenses for the given timeframe
• Any necessary capital (e.g., loans, equipment, inventory, renovations) to run the business and achieve profit goals

Effective: July 1, 2025

For the purposes of the Self-Employment Program, a business is considered “launched” when: 

• The business plan (if required) has been accepted by the ministry
• The SEP Questionnaire and Acceptance of Terms (HR3258) has been completed as required
• The client is operating the business

Effective: July 1, 2025

The ministry will approve deductions and exemptions that exempt certain business expenses and assets when calculating clients’ earnings and eligibility for income or disability assistance. There is a limit to the total value of business assets and loans allowed under SEP. If the total value of assets and loans exceed the limits outlined in regulation, clients may be exempted if the amount is justified in the business plan and the amount is approved by ministry staff.

When clients submit their monthly report, the deductions and exemptions are subtracted from the gross revenue to calculate the net income earned. Clients participating in SEP are also eligible for an earnings exemption applicable for their family. 

Allowable SEP deductions and exemptions include:

• Operating expenses like supplies, accounting, advertising, taxes, insurance, equipment maintenance, wages (excluding the business owner and their family), vehicle expenses, Employment Insurance (EI) or Workers’ Compensation Benefits (WCB), contributions to EI, WCB, or Canada Pension Plan (CPP), rent and utilities (except for the family home unless costs increase due to the business), office expenses, equipment purchases or rentals, and loan payments
• Cash accounts for paying operating expenses, as long as the overall balance of all accounts does not exceed the limit set in regulations
• Home renovations justified in the business plan as a business expense and done during self-employment

Note: Fees may include commissions charged against short-term, occasional earnings (e.g., agent fees for temporary work). Commissions earned as income may not be considered as permitted deductions from gross income.

Effective: July 1, 2025

Reporting forms

Each month, SEP clients are required to submit the following reporting forms to the ministry: 

• Monthly Report (HR0081) signed by the client with the following attached:
  • SEP Income and Exemptions (HR2988) signed by the client
  • Supporting documentation (verification of business income and expenses)

For clients it is recommended to use the SEP income tracking sheet (HR3986) or the SEP monthly deductions tracking sheet (HR3987).

Reporting time frame

SEP clients must report their earnings from the previous month by the fifth of each month.

Non-compliance with reporting requirements

When SEP clients need to provide additional information, fix errors, or submit missing reports or forms, the ministry will contact them. If they do not provide the requested information, their cheque will be held at the client’s local office.

If a SEP client is unwilling or unable to provide the additional information, fix errors or submit missing reports or forms, they will not be eligible for SEP business deductions and exemptions for that reporting month. They will need to report their gross income earned. Clients can choose to no longer receive SEP business deductions and exemptions at any time. Once no longer receiving business deductions, clients will need to declare their gross income earned from their business by the fifth of each month.

Effective: July 1, 2025

Clients interested in the Self-Employment Program (SEP) who have not launched their business yet should contact WorkBC first to see if they are suitable for WorkBC self-employment services. WorkBC may be able to help the client achieve their goal of launching a self-employment business.

Clients can apply for SEP in any of these ways:

• Telephone: toll free at 1-866-866-0800
• In person: visiting a Service BC or an income assistance office

Clients must answer these questions when applying for SEP:

• Is their business incorporated?
• Does their business have a separate bank account?
• Has the business started earning income?
• Does the client have any business loans?
• What is the estimated value of the business today?
• What is the client’s preferred method of contact?
• When is the best time to contact the client?

The ministry will review the client’s request and contact them to discuss the program and the requirements to participate.

Effective: January 19, 2015

Ministry staff provide clients with a detailed explanation of the deductions and exemptions to SEP including exemptions to earned income to which they are entitled.

SEP Deductions and Exemptions