The Self-Employment Program (SEP) is intended to assist BC Employment Assistance (BCEA) clients who have a Persons with Disabilities (PWD) designation or qualify as a person who has persistent multiple barriers (PPMB) to employment in establishing and operating a self-employment enterprise.
The SEP is a program of business deductions and exemptions for the use of eligible BCEA clients who are, or wish to become, self-employed. The program exempts specific business-related expenses and assets in determining clients' earnings and monthly eligibility for income or disability assistance. It is intended to help PWD and PPMB family units in a wide range of self-employment situations, from businesses that provide full-time employment and have business loans, to enterprises that are part-time and generate low earnings on an occasional or seasonal basis.
The SEP is distinct from self-employment service options available through WorkBC Employment Services. Work BC Employment Services may be available to eligible PWD and PPMB clients who have been assessed as suitable for and needing these services to become financially independent or to reduce dependency on BCEA.
Program Introduction
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 qualify as a person who has persistent multiple barriers (PPMB) to employment.
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 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.
Program Intent
Effective: December 1, 2003
The Self-Employment Program (SEP) is intended to:
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.
Program Components
Effective: April 2, 2012
The Self-Employment Program (SEP) is comprised of the following components:
Linkage to WorkBC Employment Services (ES)
Effective: April 2, 2012
The Self-Employment Program (SEP) is distinct from the self-employment service options available through WorkBC Employment Services (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 before their acceptance into WorkBC ES. This is to ensure that clients:
Self Employment Program (SEP) Eligibility Criteria
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:
Recipients of hardship assistance, Child in Home of Relative [see Related Links – Child in Home of Relative] and non-PPMB spouses of PPMB clients are not eligible for Self-Employment Program (SEP) business deductions and exemptions.
Clients may continue in the Self- Employment Program (SEP) as long as they are:
If a client loses the PWD designation or no longer qualifies as a PPMB while participating in the Self-Employment Program (SEP), the business deductions and exemptions may continue to be authorized until the effective PWD or PPMB end date (that is, three months' notification is given).
Participation of Non-PWD Family Members
Effective: December 1, 2003
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:
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].
Requirement for 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.]
WorkBC Employment Services (ES) Action Plans
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 PWD and Persons with Multiple Barriers (PPMB) clients accepted by WorkBC for either WorkBC Self-Employment Services or Customized Employment Services (Self-Employment Option).
Policy is not intended to support 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. [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:
When self-employment is determined to be 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.
Intake Process
Effective: September 1, 2016
PWD or PPMB clients who are seeking to start a self-employment enterprise and have been determined by the Ministry to have the necessary knowledge and experience to be successful, may enter directly into the Self-Employment Program.
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 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, as well as 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, PWD and PPMB cClients 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 before their acceptance into WorkBC Employment Services.
All clients interested in entering the ministry Self-Employment Program and who meet the eligibility criteria will:
[For SEP Acceptance of Terms and Business Plan (HR2998), see Forms and Letters.]
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:
Note: For existing SEP clients with self-employment earnings, see Procedures Section
Self-Employment Support Services
Effective: September 1, 2016
The Self-Employment Program (SEP) Orientation includes each of the following:
WorkBC Employment Services:
EAW:
[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:
Clients are responsible for submitting all monthly income reports to the ministry using the Monthly Reporting Form (HR0081) form [see Policy – Reporting Requirements]
More detailed reviews of self-employment income, including re-administration of the HR3258 Questionnaire may be requested of clients using the HR2988S short form if any of the following occur:
Annual business reviews provide the ministry with the opportunity to look at SEP employment enterprises in greater detail on a regular basis. 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 income and business assets, or to inquire about a client’s suitability for the self-employment program. The amount of detail required in an annual business review will depend on the nature of the business and the level of business activity.
Business Plan Overview
Effective: April 2, 2012
A business plan may be required to participate in the Self-Employment Program (SEP). A business plan may be required for clients seeking to develop a new business opportunity through self employment, for clients with a business loan, or clients whose businesses involve significant capitalization for business assets including business equipment, inventory or renovations to the client’s residence.
The requirement for a business plan may be waived if:
Clients that meet the above exceptions may still be required to submit a short descriptive paragraph outlining their business and goals to support eligibility for the SEP program.
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.
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:
Meaning of Business Launch
Effective: June 30, 2008
For the purposes of the Self-Employment Program, a business is considered “launched” when:
[For SEP Acceptance of Terms and Business Plan (HR2998) and SEP Questionnaire and Acceptance of Terms (HR3258), see Forms and Letters.]
Deductions and Exemptions
Effective: November 28, 2022
Subject to limits on assets and loans exemptions [see Policy – Limits on Asset and Loan Exemptions], gross revenue 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].
A summary of the allowable SEP deductions and exemptions follows. Schedule B of either the Employment and Assistance Regulation and the Employment and Assistance for Persons with Disabilities Regulation can be reviewed for deductions and exemptions rules regarding small business [see Acts and Regulations].
Gross revenue derived from operating a business under SEP may be exempted if used for any of the following:
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.
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 total value of assets and loans that exceed the limits established by regulation may be exempted if both of the following are met:
[For authority to approve a greater exemption amount for renovations or for the total value of assets and loans, see Authorities and Responsibilities.]
Reporting Requirements
Effective: June 30, 2008
Each month, SEP clients are required to submit the following reporting forms to the ministry:
For clients who are to use the long form (HR2998L), it is recommended (but optional) to 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.
Self-Employment Program (SEP) participants will begin submitting the SEP Client Monthly Report (HR2988S or HR2988L) to the ministry as follows:
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 [see Related Links - Monthly Reporting Requirements].
Clients participating in SEP may be asked to submit additional information, correct errors or provide missing monthly reports or forms. If required information is provided promptly EAWs may continue to authorize the SEP deductions and exemptions.
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.
[For SEP Client Monthly Report (HR2988S and HR2988L), Monthly Report (HR0081), SEP Monthly Reporting Worksheet (HR3010), see Forms and Letters.]
Self-Sufficiency of Clients
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:
Once self-sufficiency has been achieved, the client will no longer be authorized for SEP deductions and exemptions and will no longer be eligible for income assistance or disability assistance.
Clients with Existing Self-Employment Enterprises Who Want to Participate in Self-Employment Program (SEP)
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
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1. |
Provide SEP orientation, 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 self-employment reporting form will be used by each client. (simplified short HR2988S or long HR2988L) |
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3. |
Deliver the BCEA Regulation Orientation, including training on how clients are to report income and business assets using the applicable form. |
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4. |
If the client requires a business plan, [see Policy – Business Plans] review the business plan, accept or reject the plan. |
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5. |
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. |
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6. |
Update the client’s employment plan (HR2863) or voluntary participation plan (HR2916) if one exists. |
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7. |
Obtain the client’s signature on the self employment form that 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 and advise client of any changes to their assistance. |
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8. |
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 their business where it may affect eligibility for assistance, as well as about renovations identified in an approved business plan. |
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9. |
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. |
New Clients Seeking to Start a Self-Employment Business and Enter Self-Employment Program (SEP)
Effective: September 1, 2016
EAW |
1. |
By Program Referral SR, refer the client to the WorkBC following standard operating procedure for employment plans. Work BC will conduct self-employment orientation and assessment. Prior to any BCEA client launching WorkBC supported self-employment business, WorkBC will notify the ministry via a system Service Request (SR) that the client is starting self-employment. |
EAW |
2. |
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. Advise client if the ministry requires a business plan. 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. |
3. |
Deliver the BCEA Regulation Orientation for SEP, including training on how clients are to report income and business assets using the applicable form. Follow up with clients if there are questions or concerns about its use. Provide a copy of the applicable form to the client every month income is reported. |
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4. |
Update the client’s employment plan (HR2863) or voluntary participation plan (HR2916) if one exists. [see Forms and Letters] |
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5. |
Obtain the client’s signature on the self employment form that 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 and advise client of any changes to their assistance. |
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6. |
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. |
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EAW |
7. |
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. |
SEP Deductions and Exemptions
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 & Exemptions – Policy – Employment Income – Income Assistance Recipients or Employment Income – Disability Assistance Recipients
Authorities
Effective: September 1, 2016
Employment and Assistance Worker (EAW) and Community Integration Specialist (CIS) |
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Manager |
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Director |
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WorkBC |
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Responsibilities
Effective: September 1, 2016
Employment and Assistance Worker (EAW) is responsible for:
WorkBC is responsible for:
EAW (subject matter expert on self-employment (SME for SEP)) is responsible for:
A summarized Authority Level matrix is available in Additional Resources.