Self-Employment Program (SEP) for PPMB & PWD

Effective: April 2, 2012

The Self-Employment Program (SEP) is a program of business deductions and exemptions permitted under the Employment and Assistance Regulation and the Employment and Assistance for Persons with Disabilities Regulation.  SEP is only available to eligible BC Employment Assistance (BCEA) recipients with a Persons with Disabilities (PWD) designation or recipients who meet the Persons with Persistent Multiple Barriers (PPMB) criteria.  Whether a BCEA client is seeking to develop a new business, or has an existing business, SEP may be of assistance once the business is in operation.

The ministry may accept eligible clients into SEP who have existing businesses or who are starting up self-employment enterprises.  Clients who are accepted for self-employment service options through WorkBC Employment Services may also be eligible for SEP.

PWD clients and their non-disabled spouses, and PPMB clients who are currently operating a small business, may enter directly into SEP.  This includes clients who have seasonal or sporadic earnings from small-scale part-time enterprises, as well as those in a bigger, full-time or more complex business enterprise.    

Acceptance of clients into SEP means the ministry authorizes them to utilize the SEP business deductions and exemptions specified in the Employment and Assistance Regulation and the Employment and Assistance for Persons with Disabilities Regulation.

Effective: December 1, 2003

The Self-Employment Program (SEP) is intended to:
 

• assist individuals who have the Persons with Disabilities (PWD) designation and  individuals who meet the Persons  with Persistent Multiple Barriers (PPMB) criteria in establishing or operating a self-employment enterprise, through the provision of business deductions and exemptions
• encourage self-reliance, personal independence, and quality of life through self-employment
• encourage clients to work to the extent they are able and to pursue self-employment careers that are suited to or fit with the management of their disability 

SEP is intended to provide support to clients engaged in operations that are as small as seasonal part-time micro-enterprises, or as complex as businesses that require full-time involvement, significant loans for equipment and inventory, and paid employees. 

Effective: April 2, 2012

The Self-Employment Program (SEP) is comprised of the following components:
 

• self-employment support services, consisting of the BCEA SEP Orientation for clients including information on eligible business deductions and limits on cash reserve bank account for the business; administration of the SEP Questionnaire and Acceptance of Terms (HR3258); review of a business plan if one is required by the ministry; and as appropriate, encouraging PWD and PPMB clients who have not yet started their businesses to enquire at their local WorkBC Centre about eligibility for WorkBC self employment service options.
• self-employment business deductions and exemptions for the purposes of calculating SEP participants’ monthly eligibility for income assistance or disability assistance as approved by the ministry [see Policy – Deductions and Exemptions]

Effective: April 2, 2012

The Self-Employment Program (SEP) is distinct from the self-employment service options available through WorkBC ES.  WorkBC ES may be available to PWD and PPMB clients who have been assessed by WorkBC ES as suitable for and needing these services to become financially independent or to reduce dependency on BC Employment Assistance (BCEA).

BCEA PWD and PPMB clients who have been assessed as eligible for WorkBC ES self-employment service options will be encouraged to discuss impacts to their BCEA eligibility with ministry staff prior to their acceptance into WorkBC ES.  This is to ensure that clients:
 

• understand any potential impacts to ongoing BCEA eligibility,
• understand the ministry’s income reporting requirements,
• understand business deduction and exemption rules, and
• are eligible for any SEP business deductions and exemptions.

Effective: June 30, 2008

To be authorized to use the Self-Employment Program (SEP) business deductions and exemptions set out in regulation [see Policy – Deductions and Exemptions], clients must meet all of the following criteria:
 

• be in one of the following categories:
  • Persons with Disabilities (PWD) designation
  • the spouse of the client with PWD designation [see Policy – Participation of Non-PWD Family Members]
  • Persons with Persistent Multiple Barriers (PPMB) status [For information on participation of other family members in the business, see Policy – Participation of Non-PWD Family Members.]
• be eligible to receive income assistance or disability assistance
• providing the business is not incorporated, be seeking to start a business for the purposes of self-employment, or have an existing business in which they are self-employed
• not be described by any of the following:
  • receiving assistance as a child in the home of a relative [see Related Links – Child in Home of Relative]
  • recipient of hardship assistance [see Related Links – Eligibility for Hardship Assistance]
  • be a non-PPMB spouse of a PPMB client

Program Time Frame

Clients may continue in the Self- Employment Program (SEP) as long as they continue to meet each of the following criteria:
 

• eligibility for disability assistance or income assistance
• eligibility for SEP [see Policy – Eligibility Criteria – Loss of PWD Designation or PPMB Status]
• compliance with the SEP requirements specified in regulation [see Policy – Reporting Requirements]

Loss of PWD Designation or PPMB Status

If a participant loses the PWD designation or PPMB status while in the Self-Employment Program (SEP), the business deductions and exemptions may continue to be authorized until the effective date of the loss of the PWD designation or PPMB status (that is, three months' notification is given).  EAWs must do both of the following:
 

• inform clients who are entering SEP of this provision
• notify SEP participants who lose the PWD designation or PPMB status and explain possible impacts on future treatment of self-employment income and continued eligibility for income or disability assistance

Effective: December 1, 2003

Principal Operator

In situations where more than one person in a PWD or PPMB family unit will be involved in a self-employment business, the principal operator may be any of the following:
 

• the client with the PWD designation
• the client with the PPMB status
• provided that self-employment is the most direct route to self-sufficiency for the family unit, the non-PWD or non-PPMB spouse of a PWD client [see Policy – Requirement for Employment Plan or Voluntary Participation Plan]
• the spouse of the PWD-designated client, who has PPMB status
• the PWD client and his or her spouse can both be co-principal operators
• if only one adult in the family unit has PPMB status, both adults cannot be co-principal operators
• if both adults in the family unit have PPMB status, both can be co-principal operators.  However, in order to qualify for the monthly PPMB earning exemption, both co-principals would have to meet PPMB criteria.  Furthermore, if a business involving a PPMB spouse and a non-PPMB spouse was accepted into SEP, although the family unit would not qualify for the monthly earning exemption, the business would be authorized to use the SEP provisions for business deductions and asset exemptions when reporting earnings on a monthly basis.  Note: non-PPMB spouses of PPMB clients are not themselves eligible to start a business under SEP.

Employees

Non-PWD family members, including spouses, may participate in the self-employment enterprise as employees (for example, be paid for work done).  Their earnings must be reported on the Monthly Report (HR0081).

[For Monthly Report (HR0081), see Forms and Letters.]

Note: Gross wages paid to the principal operator or any person in the same family unit are not permitted in regulation as a business operating expense.  In addition to the SEP deductions and exemptions, the family unit’s earnings exemption will be applied to earnings (wages) reported on the HR0081, and the balance deducted from their assistance rate.  [see Procedures – SEP Deductions and Exemptions]

Note: In PPMB family units, both adults must have PPMB status in order to be eligible for the earnings exemption in addition to the SEP deductions and exemptions.  [see Procedures – SEP Deductions and Exemptions]

Spouse with Employment Obligations

Policy is not intended to support non-disabled spouses who have employment obligations as principal operators of self-employment enterprises that do not appear likely to result in the family unit leaving assistance. Where the spouse is the principal operator of the business (or is proposing a new one) and has employment obligations, the spouse’s Employment Plan must indicate that self-employment is the most direct route to employment leading to independence.  [see Policy – Requirement for an Employment Plan or Voluntary Participation Plan]

Effective: April 2, 2012

Clients with PWD designation or Persons with Multiple Barriers (PPMB) status who participate in the Self-Employment Program (SEP) enter into a Voluntary Participation Plan (VPP).  For clients who do not have employment obligations, the VPP records their participation in the SEP and documents the activities and requirements of the SEP.  [For more information, see Related Links – Voluntary Participation Plan and No Employment Obligations.]

Effective: April 2, 2012

All case managed clients of WorkBC ES will enter into an Action Plan with WorkBC, outlining the steps and services they have agreed to undertake in order to achieve labour market attachment. 

This includes BC Employment and Assistance PWD and Persons with Multiple Barriers (PPMB) clients accepted by WorkBC for either WorkBC Self-Employment Services or Customized Employment Services (Self-Employment Option).

Spouse with Employment Obligations

Spouses of PWD clients, who have employment obligations and who are principal operators of a business, must have an Employment Plan (EP) that supports and documents the activities, expectations, and requirements of the Self-Employment Program.  [For more information, see Related Links – Employment Plan.]

When developing an EP with a spouse who has employment obligations, ministry staff must first consider whether the spouse could find employment directly leading to self-sufficiency for the family unit through:
 

• WorkBC self-serve services,
• Supervised Independent Work Search, or
• Non-ministry programs such as Aboriginal Skills and Employment Training Strategy (ASETS) programs or other non-ministry options.

When self-employment is deemed the spouse’s best option, only spouses who are currently principal operators of a business that is likely to enable the family unit to leave disability assistance shall be authorized to use the Self-Employment Program (SEP) deductions and exemptions.  Ministry staff must determine whether the spouse’s business can reasonably be expected to result in the family unit becoming financially self-sufficient.

Effective: September 1, 2016

Clients Interested in Developing a Self-Employment Enterprise

The Self-Employment Program (SEP) no longer provides basic entrepreneurial skills and knowledge preparation for self-employment.  As of April 2, 2012, PWD or Persons with Multiple Barriers (PPMB) clients who are seeking to start a self-employment enterprise but who lack essential experience in business and business planning may be encouraged to access WorkBC self-serve services.  If the client is determined by WorkBC as requiring case management, the service provider will determine if the client needs and is suitable for WorkBC self-employment service options.  This includes determining whether the client is personally suitable and the business concept is eligible and assisting individuals to determine business viability.

Note:  Clients are not required to participate in WorkBC self-employment programming in order to access the ministry’s Self-Employment Program of business deductions and exemptions.  However, BCEA PWD and PPMB Clients who have been assessed as eligible for WorkBC self-employment service options will be encouraged to discuss impacts to their BCEA eligibility with ministry staff prior to their acceptance into WorkBC Employment Services. 

PWD or PPMB clients who are seeking to start a self-employment enterprise and are deemed by the ministry to have the necessary knowledge and experience to be successful, may enter directly into the Self-Employment Program.

All clients interested in entering the Self-Employment Program and meeting the eligibility criteria will:
 

• participate in the  SEP Orientation [see Policy – Self-Employment Support Services]
• complete the ministry SEP Questionnaire (top portion of HR3258)
• sign the SEP Acceptance of Terms (bottom portion of the HR3258)
• unless the requirement is waived, develop and submit a business plan acceptable to the ministry [see Policy – Business Plan] in accordance with SEP Acceptance of Terms and Business Plan (HR2998)

[For SEP Acceptance of Terms and Business Plan (HR2998), see Forms and Letters.]

New Clients with Self-Employment Earnings Seeking to Access SEP

To be accepted for the Self-Employment Program (SEP), clients with self-employment earnings are required to complete the following before they are authorized to report their earnings under SEP:
 

• SEP Orientation [see Policy – Self-Employment Support Services]
• SEP Questionnaire and Acceptance of Terms (HR3258)
• Provision of any other information the ministry requires
  • to confirm eligibility for income or disability assistance
  • to understand the nature of the client’s business (for example, overview of business, estimated income, business assets position, liabilities position, inventory levels, etc.)

Note: For existing SEP clients with self-employment earnings, see Procedures Section

Effective: September 1, 2016

SEP Orientation

The Self-Employment Program (SEP) Orientation includes each of the following:

WorkBC Employment Services:

• suitability assessment for WorkBC self-employment service options
• administration of the SEP Business Concept Proposal (HR3454)

Employment and Assistance Worker (EAW)

• an orientation to BCEA regulations pertaining to the Self-Employment Program (SEP), including:
  • permitted business deductions set out in regulations to the EA and EAPWD Acts
  • limits for cash asset bank accounts for the business
  • net income and business asset reporting obligations as specified under the Employment and Assistance Regulation and the Employment and Assistance for Persons with Disabilities Regulation [see Acts and Regulations]
• administration of the SEP Questionnaire and Acceptance of Terms (HR3258) to determine which form (HR2988S or HR2988L) a client should use when reporting self-employment income and business assets, and to indicate understanding of client obligations under SEP
• instructions for completing the appropriate SEP monthly reporting forms for the ministry:
  • SEP Client Monthly Report (HR2988L “long,” and HR2988S Simplified or “short”)
  • Monthly Report (HR0081)
• the ministry’s requirements under SEP as to when a client must prepare and get approval for a business plan [see Policy – Business Plan]
• provision of any additional information needed by the ministry on the nature and scope of business activities, assets, and estimated income, including the re-administration of the Questionnaire (HR3258) whenever ministry staff believe there may be a need for the client to change which monthly income and business asset reporting form to use.

Ministry staff (EAW) are to provide a copy of the signed HR3258 to the client every time one is completed.

[For SEP Client Monthly Report (HR2988S or HR2988L), Monthly Report (HR0081), SEP Questionnaire and Acceptance of Terms (HR3258), see Forms and Letters.] 

Income Reviews 

Each month, or less frequently depending on when income is earned by clients, ministry staff are to:
 

• Review the self-employment income of clients and assess the business deductions and exemptions claimed by the client for a self-employment enterprise for consistency with “permitted deductions” as set out in regulations to the Employment and Assistance and Employment and Assistance for Persons with Disabilities Acts (see Deductions and Exemptions section for specific allowable items)   

Clients are responsible for submitting all monthly income reports to the ministry using the form specified by the EAW [see Policy – Reporting Requirements]

Clients who have questions about the use of either the simplified short form (HR2988S) or long (HR2988L) form should be encouraged to get clarification from ministry staff before submitting their monthly reports to the ministry.

If a client has been required to report income on the HR2988S simplified short form, the review is to be conducted by an EAW.  If a client is required to use the HR2988L long form, the designated subject matter expert on self-employment is to conduct the review. [see Policy - Reporting Requirements] 

More detailed reviews of self-employment income, including re-administration of the  HR3258 Questionnaire (to determine if the long form should be used to report income and business assets), may be requested of clients using the HR2988S short form at any time if any of the following occur:
 

• The client’s business has undergone significant growth since the last time income was reported to the ministry.  The EAW may request additional business information that is necessary to clarify the extent to which the business has expanded or otherwise grown.  Significant growth generally means gross income increased by 50% or more over the gross income of the previous month, or the previous time that income was reported.
• The value of the client’s monthly gross income is $2000 or more.
• The total value of client’s business assets has exceeded $25,000. 
  • Business assets include:  funds in a cash reserve account (separate bank account for business) up to a maximum of $5000; business inventory of supplies, products, materials; value of any unexpended business loans and value of business equipment and tools. 

For clients using the HR2988S short form, if in any given month allowable deductions claimed by a client exceed 25% of that client’s gross self-employment earnings, the client is required to provide receipts to the EAW.  The EAW must ensure the receipts are for items that are considered to be permitted business expenses in accordance with BCEA regulations.

Annual business reviews provide the ministry with the opportunity to look at SEP employment enterprises in greater detail on a regular basis.  EAWs and designated subject matter experts in self-employment shall conduct annual business reviews of all clients participating in SEP once each year.  The purpose of the annual review is to examine a year-long pattern of earnings and business assets to understand whether a business is growing or not, to request additional information from a client that clarifies the reporting of a client’s income and business assets, or to inquire whether there may be concerns about a client’s appropriateness for self-employment.  The amount of detail required in an annual business review will depend on the nature of the business and the level of business activity.  In situations where there may be concerns about a client’s business, the EAW should consult the subject matter expert to consider the issue of suitability in greater detail.    

Effective: April 2, 2012

A business plan may be required if an eligible client who wishes to participate in the Self-Employment Program (SEP) seeks to develop a new business opportunity to earn money through some form of self-employment, or if a client with an existing business seeks to participate in SEP.  Business plans may vary in detail depending on the nature, size and complexity of the business.  A business plan is required for any client in SEP who has a business loan, or clients whose businesses involve significant capitalization for business assets including business equipment, inventory or renovations to the person’s residence.  In order for a business loan to be exempted as an asset when calculating monthly earnings and business assets, the client must have a business plan that is sufficiently detailed and is accepted by the ministry.

When a business plan is required, the plan must be submitted to the ministry prior to authorization of the Self-Employment Program (SEP) deductions and exemptions and business launch by a client starting a new business.  The business plan together with a signed copy of the HR2998, Acceptance of Terms and Business Plan, should be obtained by the EAW, and copies provided to the client.  Any changes to the business plan should be noted by the EAW on the client’s case.

Business Plan Requirements

The business plan may be as basic as a description of the business opportunity including the product or service to be sold, and projected gross revenues, expenses and monthly and yearly net income [see Questionnaire HR3258, regarding the description of a new business]. More detailed business plans would be required for businesses that are more complex or larger in scale (e.g., have employees, require business loans, have significant business assets). 

To be acceptable by the ministry, a business plan must be a written document that minimally outlines all of the following:
 

• the nature of the self-employment business (for example, goods produced, services provided, products to be sold, and projected customers)
• an explanation of the timeframe within which the proposed business can reasonably be expected to make a profit
• projected monthly revenues and expenditures for the timeframe indicated
• any capital requirements (for example, business loans, assets, equipment, inventory, renovations to a facility) that are necessary to operate the business and attain its goals of making a profit in the timeframe indicated

New Clients Interested in Developing a Self-Employment Enterprise

PWD and Persons with Multiple Barriers (PPMB) clients interested in starting a self-employment enterprise but who lack experience in business should be encouraged by an EAW to contact their local WorkBC Centre to enquire about eligibility for self-employment service options. If the client is accepted by WorkBC Employment Services (ES)  for case management, they will then have to successfully complete a thorough self-employment suitability assessment with WorkBC in order to be considered for WorkBC’s self-employment service options.  BCEA PWD and PPMB Clients who have been assessed as eligible for WorkBC self-employment service options will be encouraged to discuss impacts to their BCEA eligibility with ministry staff prior to their acceptance into WorkBC services.

In situations where a client is obtaining a business loan and seeks to have it exempted beyond the $5,000 limit for the cash reserve account, the requirement for doing a business plan must not be waived.  In most cases, a business plan should be prepared as the culminating step of a new client’s business development training.

EAWs working with a new client who wants to start a self-employment enterprise should contact the subject matter expert, if there are concerns about the appropriateness of the new client’s business plans. 

Clients with Self-Employment Earnings Seeking Access to SEP

Unless they have a business loan and seek to have it exempted beyond the $5,000 limit of the cash reserve account, clients with existing self-employment enterprises who are seeking to participate in the Self-Employment Program (SEP) are not required to develop a ministry-accepted business plan in order to utilize the SEP deductions and exemptions.  If required due to a business loan, the business plan must be recommended for ministry acceptance by a designated ministry worker prior to authorization of the use of SEP deductions and exemptions by the client.   

Current SEP Clients Seeking a Business Loan

Ministry staff may require a business plan to be developed for any existing client participating in SEP who at any time obtains a business loan that increases the value of the cash reserve account over the $5,000 limit.  Ministry staff may exempt loans as assets up to the limit of $50,000.

Exceptions to Business Plan Requirement: In some circumstances, ministry staff have the ability to waive the requirement for new SEP clients to have a business plan.  When the requirement to have a business plan is waived, the monthly reporting requirements and limits on deductions and exemptions continue to apply.  Any of the following are circumstances in which the requirement for a business plan may be waived:
 

• cognitive impairment or apparent low mental or communicative functioning of the client
• the business concept is very simple and requires only modest levels of business assets such as inventory, or equipment (for example, handicrafts made for sale at a seasonal craft sale)
• the business operates on a short-term or periodic basis (for example, business of carving and selling wooden toys at annual Christmas craft fairs)

[For authority to waive the requirement for clients to have a business plan, see Authorities and Responsibilities.]

Effective: June 30, 2008

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

• the business plan (if required) has been accepted by the ministry
• the SEP Acceptance of Terms and Business Plan (HR2998) or the SEP Questionnaire and Acceptance of Terms (HR3258) has been completed as required
• the client is operating the business.

[For SEP Acceptance of Terms and Business Plan (HR2998) and SEP Questionnaire and Acceptance of Terms (HR3258), see Forms and Letters.]

Effective: June 30, 2008

Subject to limits on assets and loans exemptions [see Policy – Limits on Asset and Loan Exemptions], gross revenue derived from the self-employment business and used for purposes that are consistent with the business plan may be exempted for the purposes of determining the Self-Employment Program (SEP) client’s eligibility for assistance.  In addition, SEP participants are eligible for an earnings exemption applicable to their family unit. [see Procedures – SEP Deductions and Exemptions]

Note: A summary of the allowable SEP deductions and exemptions follows, however, Schedule B of the Employment and Assistance Regulation or Schedule B of the Employment and Assistance for Persons with Disabilities Regulation should be consulted for the legal references to the deductions and exemptions. [see Acts and Regulations]

Gross revenue derived from operating a business under SEP may be exempted if used for any of the following:
 

• operating expenses incurred in operating the business, including all of the following:
  • purchase of supplies and products (that is, inventory)
  • accounting and legal services
  • advertising
  • taxes, fees, licences, and dues incurred in the business (see note below regarding fees)
  • business insurance
  • interest and other financial institution charges
  • equipment maintenance and repairs
  • gross wages paid to employees of the business, except those paid to the principle operator of the business or any person in the principle operator’s family unit
  • motor vehicle expenses
  • Employment Insurance (EI) or Workers’ Compensation Benefits (WCB)
  • employer contributions for EI, WCB, or the Canada Pension Plan (CPP)
  • rent and utilities, except for the place of residence of SEP participant and the participant’s family unit, unless, because of the business, there is an increase in rent and utility costs which is not covered under the family unit shelter allowance
  • office expenses
  • equipment purchases or rentals
  • principle and interest payments on a loan described in a business plan accepted by the ministry, and used to operate the business

Note:  Fees may include commissions that are charged against a client for short-term, occasional earnings (e.g., a client who must pay an agent a finder’s fee for short-term work as extra on a movie set).  However, commissions earned as income may not be considered as permitted deductions from gross income. 
 

• to establish a cash account that is reserved for paying permitted operating expenses, up to the amount shown in Procedures – SEP Deductions and Exemptions [see Procedures]. A client may have multiple accounts established for this purpose, as long as the overall balance of all accounts does not exceed the limit set in regulations.
• renovations to the client’s residence, up to the amount shown in Procedures – SEP Deductions and Exemptions [see Procedures], if both of the following are met:
  • the renovations are justified in the business plan as a business expense
  • the renovations are made during the period of self-employment

A greater amount may be exempted if both of the following are met:

• the amount is justified in a ministry-approved business plan
• the amount is approved by delegated ministry staff
• Business income and assets (including cash reserve accounts) are not exempt once participation in SEP ends.

[For authority to approve a greater exemption amount for renovations, see Authorities and Responsibilities.]

Effective: December 1, 2003

The exemption limit for the total value of the business assets and loans permitted by the Self-Employment Program (SEP) for all participants is shown in Procedures – SEP Deductions and Exemptions [see Procedures]. For clients with ministry-approved business plans, amounts for the aggregate value of assets and loans that exceed the limits established by regulation may be exempted if both of the following are met:
 

• the amount is justified in the business plan
• the amount is approved by delegated ministry staff

[For authority to approve a greater exemption amount for the aggregate value of assets and loans, see Authorities and Responsibilities.]

Effective: June 30, 2008

Reporting Forms

Each month, SEP clients are required to submit the following reporting forms to the Employment and Assistance Worker (EAW):
 

• Self-Employment Program Client Monthly Report, either the HR2988L or HR2988S, signed by the client
• Monthly Report (HR0081) signed by the client

For clients who are to use the long form to report income and assets, (HR2988L): 

It is recommended that clients use the SEP Monthly Reporting Worksheet (HR3010).  Instructions are provided on the HR3010 to ensure that clients may utilize the appropriate business deductions and exemptions available when reporting their monthly earnings to the EAW.  Submitting the HR3010 to the EAW is optional.

Reporting Time Frame

Self-Employment Program (SEP) participants will begin submitting the SEP Client Monthly Report (HR2988S or HR2988L) to ministry staff (EAWs or as otherwise designated) as follows:
 

• new clients interested in self-employment:  upon launching their business [see Policy – Meaning of Business Launch]
• clients with existing self-employment enterprises: upon entering the SEP Orientation module

SEP participants will report all required information about the previous month’s earnings to the ministry on the forms by the fifth of each month.

Non-compliance with Reporting Requirements

EAWs may notify Self-Employment Program (SEP) participants of any missing monthly reports and any errors, omissions or deficiencies in their submissions.  If participants are able to promptly remedy any ministry concern of non-compliance (for example, a deficient or late monthly report), EAWs may continue to authorize the SEP deductions and exemptions.  If participants do not remedy problems before monthly cheque cut-off, they will be found to be non-compliant.

When clients do not meet the monthly reporting requirements of SEP, including the monthly timeframe and reporting format of the ministry, the client’s participation in SEP will be ended, with no further authorization to use SEP deductions and exemptions.

Even if a client has been deemed ineligible for SEP, the ministry will continue to require submission of a completed Monthly Report (HR0081) as required under Regulation, as a condition of eligibility.

[For SEP Client Monthly Report (HR2988S and HR2988L), Monthly Report (HR0081), SEP Monthly Reporting Worksheet (HR3010), see Forms and Letters.]

Effective: December 1, 2003

The ministry may determine that a client receiving assistance and operating a small business under the Self-Employment Program (SEP) is self-sufficient, or capable of independence from assistance, based on all of the following criteria being met:
 

• the assets and inventory outlined in the business plan have been accumulated and are over the amount shown in Procedures – SEP Deductions and Exemptions [see Procedures] for assets and loans
• the cash reserve account has reached the amount shown in Procedures – SEP Deductions and Exemptions [see Procedures]
• the permitted operating expenses for the month have been paid
• after applying the appropriate earnings exemption [see Procedures – SEP Deductions and Exemptions], the remaining business cash receipts exceed the family unit’s assistance

Once self-sufficiency has been met, the client will no longer be authorized for SEP deductions and exemptions, and will no longer be eligible for income assistance or disability assistance.

Effective: January 19, 2015

All clients currently using Self-Employment Program (SEP) deductions to declare self-employment earnings are required to complete the Questionnaire and Acceptance of Terms form (HR3258) by September 5, 2008.  The EAW determines which monthly reporting form each client will use (HR2988S or HR2988L) to report business income and assets.

Each month, the client must submit either the short (HR2988S) or long (HR2988L) form to report business income and assets.  The EAW is to review and administer client submissions using the short form; the regionally designated subject matter expert (SME) in self-employment is to review and administer client submissions on the long form. 

The client’s signature must be obtained by the ministry worker on these forms whenever income is reported (normally every month except for businesses reporting income sporadically) and a copy provided to the client.  The ministry worker must apply the SEP business deductions and exemptions and any applicable earnings exemptions to each income and assets monthly report to determine the client’s eligibility for assistance.  The ministry worker must ensure the correct value of net income is reported on the client’s HR0081.  The client must be advised that for any amount of net income above his or her monthly or annual earnings exemption   the disability or income assistance payment will be reduced accordingly. [For information on exemption limits for different client types, see Related Links – Income Treatment and Exemptions – Policy – Earnings Exemption, Employment Income – Income Assistance Recipients or Employment Income – Disability Assistance Recipients.] 

If there are significant changes in the earnings or business assets of a client, as noted in policy, the ministry worker may re-administer the Questionnaire section of the HR3258 to determine if the monthly reporting form and processes should be changed for the client [see Policy].  At any time, a client may be asked to provide additional information about the activities of the business where it may affect eligibility for assistance, as well as about renovations identified in an approved business plan.  

The EAW conducts annual business reviews of clients participating in SEP.  For those clients using the long form (HR2988L) to report income and business assets, the regionally designated SMEs in self-employment assist the EAW in completing these reviews. 

Effective: September 1, 2016

For clients who have earnings to declare from established self-employment enterprises and want to participate in Self-Employment Program (SEP), follow these steps:

EAW	1.	Provide an overview of SEP, including the regulations and policy under which SEP is administered.  Explain who SEP is intended to serve and why the program exists, clients’ monthly or annual earnings exemptions, monthly income and asset reporting obligations, deductions permitted from gross income, business asset limits, cash reserve account, business loans.
	2.	Complete the Questionnaire and Acceptance of Terms form (HR3258) and provide a copy of this form to the client.  Determine which monthly income reporting form will be used by each client. (simplified short HR2988S or long HR2988L)
	3.	For clients who are to use the HR2988S (short or Simplified Monthly Self-Employment Report), deliver the BCEA Regulation Orientation, including training on how clients are to report income and business assets using the short form.
	4.	For clients who are to use the HR2988L Monthly Self-Employment Report, or long form, deliver the BCEA Regulation Orientation for SEP, including training on how clients are to report income and business assets using the long form.  Follow up with clients if there are questions or concerns about its use.
	5.	If the client requires a business plan due to business loans or other reasons, [see Policy – Business Plans] review the business plan, accept or reject the plan.
	6.	If the required business plan is acceptable, ask the client to complete the Self-Employment Program Acceptance of Terms and Business Plan (HR2998) [see Forms and Letters].  Provide copies of the business plan and HR2998 form to the client.
	7.	Update the client’s employment plan (HR2863) or voluntary participation plan (HR2916) if one exists.
	8.	Each month, the client must submit either the short (HR2988S) or long (HR2988L) form to report business income and assets.  Obtain the client’s signature on whatever income form is completed (normally every month except for businesses reporting income sporadically) and provide the client with a copy.  Apply the SEP business deductions and exemptions and any applicable earnings exemptions to determine the client’s eligibility for assistance.  Ensure the correct value of net income is reported on the client’s HR0081.  Advise the client that for any amount of net income above his or her monthly (or annual) income exemption the disability or income assistance payment will be reduced accordingly. [For information on exemption limits for different client types, see Related Links – Income Treatment and Exemptions – Policy – Employment Income – Income Assistance Recipients or Employment Income – Disability Assistance Recipients.]
	9.	If there are significant changes in the earnings or business assets of a client, as noted in policy, the Questionnaire and Acceptance of Terms (HR3258) may be re-administered to determine if the monthly reporting form and processes should be changed.  At any time, a client may be asked to provide additional information about the activities of the business where it may affect eligibility for assistance, as well as about renovations identified in an approved business plan.
	10.	On an annual basis, conduct a business review of all SEP clients.  The file review should examine monthly reports, earnings declarations, deductions and business assets over the entire year.  It is recommended that the Questionnaire section of HR3258 be re-administered to obtain information on the client’s business asset position each year.  When the long form has been used by clients to report income and assets, the designated self-employment subject matter expert should be consulted.

Effective: September 1, 2016

EAW	1.	By Program Referral SR, refer the client to the WorkBC that provides service in their area of residence.
WorkBC	2.	Conduct self-employment orientation and assessment services; determine client readiness and suitability by completing the SE Business Concept Proposal. Advise clients to contact their EAW to request the SEP deductions and exemptions information and ensure they understand the impacts of self-employment on their eligibility for BCEA. Prior to any BCEA client launching a WorkBC supported self-employment business, WorkBC will notify the ministry via a system Service Request (SR) that the client is starting self-employment.
EAW	3.	Provide an overview of the self-employment program to eligible clients including the regulations and policy under which SEP is administered. Explain who SEP is intended to serve and why the program exists, clients’ monthly or annual earnings exemptions, monthly income and asset reporting obligations, deductions permitted from gross income, business asset limits, cash reserve account, business loans. If the ministry requires the client to have a business plan, the client should provide one for review by the EAW. For clients participating in WorkBC self-employment service options, if the business plan is not acceptable to the ministry, clients should be referred back to WorkBC for revision, and/or to review the client’s appropriateness for a self-employment option.
	4.	For clients who are to use the HR2988S (short form), [see Forms and Letters] deliver the BCEA Regulation Orientation, including training on how clients are to report income and business assets using the short form.  Provide a copy of the short form to the client every month income is reported.
	5.	For clients who are to use the 2988L (long form), [see Forms and Letters] deliver the BCEA Regulation Orientation for SEP, including training on how clients are to report income and business assets using the long form.  Follow up with clients if there are questions or concerns about its use.  Provide a copy of the long form to the client every month income is reported.
	6.	Update the client’s employment plan (HR2863) or voluntary participation plan (HR2916) if one exists. [see Forms and Letters]
	7.	Each month, the client must submit either the short (HR2988S) or long (HR2988L) form to report business income and assets.  Obtain the client’s signature on whatever income form is completed (normally every month except for businesses reporting income sporadically) and provide the client with a copy.  Apply the SEP business deductions and exemptions and any applicable earnings exemptions to determine the client’s eligibility for assistance.  Ensure the correct value of net income is reported on the client’s HR0081.  Advise the client that for any amount of net income above his or her monthly or annual earnings exemption, their income assistance or disability  assistance will be reduced accordingly. [For information on exemption limits for different client types, see Related Links - Income Treatment and Exemptions – Policy - Employment Income – Income Assistance Recipients or Employment Income – Disability Assistance Recipients.]
	8.	If there are significant changes in the earnings or business assets of a client, as noted in policy, the Questionnaire section of the HR3258 may be re-administered to determine if the monthly reporting form and processes should be changed for the client [see Policy]. At any time, a client may be asked to provide additional information about the activities of the business where it may affect eligibility for assistance, as well as about renovations identified in an approved business plan.
Regional  SME	9.	On an annual basis, conduct a business review of all SEP clients.  This review should examine monthly reports, earnings declarations, deductions and business assets over the entire year.  The Questionnaire section of HR3258 should be re-administered to obtain information on the client’s business asset position each year.  When the long form has been used by clients to report income and assets, the designated self-employment subject matter expert should collaborate in the annual business review.

Effective: January 19, 2015

EAWs 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

Deduction or Exemption	Amount
Cash in an account reserved for operating expenses of the SEP business	Maximum $5,000
When justified as a business expense, renovation costs for a SEP client’s residence	Maximum $5,000
Exemption limit for total value of business assets (including equipment, inventory, and supplies) and loans	Maximum $50,000

For Exemptions to Earned Income see Related Links – Income Treatment and Exemptions – Policy – Employment Income – Income Assistance Recipients or  Employment Income – Disability Assistance Recipients

Effective: September 1, 2016

Employment and Assistance Worker (EAW)	Authorizing an exemption of up to $5,000 for renovation (for self-employment business purposes) of a Self-Employment Program (SEP) participant’s residence In consultation with the self-employment subject matter expert, authorizing an exemption of business loans up to $50,000 when justified in a ministry-approved business plan and as long as the total cost of business assets and loans does not exceed $50,000 Authorizing an exemption of up to $5,000 in a reserve account established and reserved for paying for permitted business operating expenses For the three consecutive months immediately following a SEP participant’s loss of the PWD designation or Persons with Multiple Barriers (PPMB) status, authorizing the SEP business exemptions and deductions Waiving the requirement for a SEP participant to develop a business plan
Manager	Authorizing an exemption for costs over $5,000 for renovation of a SEP participant’s residence for self-employment business purposes Upon consultation with a manager, authorizing financial audits of SEP participant’s self-employment business Upon consultation with and authorization from a manager, arranging for financial audits of SEP participant’s self-employment business by an independent third party contractor
Director	Authorizing an exemption from policy when for the total value of a SEP participant’s business assets and loans over $50,000
WorkBC	To assess WorkBC Employment Services (ES) case-managed clients as suitable for WorkBC self-employment services and refer clients to the Self Employment Orientation or to Customized Employment Development (CED) SE services to support client in achieving their goals To advise BCEA clients to contact their EAW to request the SEP deductions and exemptions, and ensure they understand the impacts of self-employment on their eligibility for BCEA To report to the ministry by SR the Form 3454E Business Concept and inform whether client is suitable to continue into WorkBC Self Employment program or CED Self Employment services when a client is ready to launch a self-employment business

Effective: September 1, 2016

Employment and Assistance Worker (EAW) is responsible for:
 

• monitoring clients’ compliance with Self-Employment Program (SEP) monthly reporting requirements
• reviewing monthly SEP reporting forms submitted by clients (both simplified short (HR2988S) and long (HR2988L) forms)
• asking clients for more information about business income and business assets when needed for determining eligibility for assistance
• authorizing business deductions and exemptions allowed by regulation
• waiving the requirement for a business plan for SEP clients
• determining acceptance of business plans submitted by SEP clients
• exempting business loans of up to $50,000 as business assets, when specified in a business plan 
• notifying clients who become ineligible for SEP business exemptions and deductions due to losing their PWD designation or no longer meeting Persons with Multiple Barriers (PPMB) criteria
• explaining possible impacts on any future BCEA payments
• monitoring and reviewing SEP clients for self-sufficiency through self-employment activity and eligibility for assistance
• conducting annual business reviews of all clients participating in SEP each year

WorkBC is responsible for:
 

• as deemed appropriate, referring an eligible WorkBC Employment Services client for assessment for suitability for self-employment and/or business training
• advising BCEA clients to contact their EAW to request the SEP deductions and exemptions, and ensure they understand the impacts of self-employment on their eligibility for BCEA

EAW (subject matter expert on self-employment (SME for SEP)) is responsible for:

• recommending whether a SEP client should be required to have a business plan
• when a business plan is required, reviewing the business plan and deciding if it should be accepted
• providing training to SEP clients on the use of the long form (HR2988L) for reporting monthly income
• monitoring SEP clients’ reports on the long form (HR2988L) providing any necessary follow-up with clients, and  as necessary deciding if to accept the monthly reports
• resolve any concerns about a SEP client’s business activity or reporting
• managing all matters arising from SEP client files, monthly reports, etc., and conducting annual business reviews of all clients participating in SEP
• if indicated, deciding that an independent third party audit of the client’s business be conducted.

A summarized Authority Level matrix is available in Additional Resources.