The means test for Jobseeker's Allowance

If you are applying for Jobseeker's Allowance, which is a social assistance payment, you must satisfy a means test.

In the means test all your sources of income (for example, cash income, employment, capital and maintenance) are assessed by the Department of Social Protection. If you are married, in a civil partnership or living with someone in a committed relationship (cohabiting) any income your partner may have is also taken into account in the means test. However, certain items are not counted when calculating your total means for a social assistance payment.

Self-employed people can apply for Jobseeker’s Allowance even if they are still working in a self-employed capacity. Any income from the self-employment is counted in the means test.

How is the means test carried out?

First of all you must fill out the application form for Jobseeker’s Allowance. Then you will be interviewed by a social welfare inspector who asks you in detail about any means you have. The means test can be quite complex for self-employed people. Often there are problems in establishing what your income actually is and there can be a long delay in getting Jobseeker’s Allowance because of this.

The law on means testing for Jobseeker’s Allowance provides that your expected income in the year after you apply is taken into account. The assessment must reflect the income you may reasonably be expected to get from your business over the next 12 months. Income for the last 12 months will be taken as a guide but allowing for any factors which it is known will vary.

It is very important that you tell the social welfare deciding officer about factors which may vary – for example, if a client of yours who accounted for a large amount of your business last year has gone out of business you can show that this portion of your income from self-employment is no longer available.

Even though the social welfare inspector will take your current circumstances into account you will be asked for your receipts and payments or audited accounts for the current and previous year. For example, if you apply for Jobseeker’s Allowance in June 2012 you will be asked for your receipts and payments from January to June 2012 and for 2011. However, in certain cases you may be required to show audited accounts for the last 2 or more years.

How is income from self-employment treated in the means test?

All your current earnings from self-employment are taken into account and there are no disregards. This means that every euro you earn from self-employment is deducted from your Jobseeker’s Allowance payment. (Some income from employment is disregarded but this is not the case with income from self-employment.)

Your earnings are assessed as gross income less work-related expenses over 12 months. Your expected annual earnings from self-employment are divided by 52 to find your weekly means from self-employment.

Any expenses which you legitimately incur in the business are taken into account. Any ‘drawings’ (this means money or goods you withdraw from the business for your personal use) you take from the business are not an allowable expense. If your ‘drawings’ from the business are greater than the level of income calculated, the ‘drawings’ are assessed as cash income. You must be able to distinguish between expenses incurred in the business and expenses incurred for domestic purposes. You should have receipts, invoices, Value Added Tax (VAT) returns, audited accounts and any other evidence available for the social welfare inspector. Read about Keeping records.

What expenses are allowed in the means test?

The Department of Social Protection say that the following are the main allowable expenses but the list is not exhaustive:

• Materials (the cost of supplies)
• Motor running costs (portion applicable to business)
• Depreciation of machinery or equipment
• Insurance relating to the business
• Telephone (portion applicable to business)
• Lighting and heating (for business and not domestic use)
• Advertising, bank charges, stationery, van leasing, labour costs
• and pension plan
• Class S PRSI contributions
• Any other costs associated with running the business , such as rent

Household running costs are not allowed as deductions against business profit. Your partner’s income will also be taken into account (and this income is assessed differently depending on whether it is from self-employment or employment).

How is my spouse or partner’s income treated?

Even if your spouse, civil partner or cohabitant is not dependent on you and has income in his or her own right the Jobseeker’s Allowance that you are entitled to claim includes a payment for them and for any dependent children you may have. Any assessable income they may have is subtracted from the maximum weekly rate of Jobseeker's Allowance for your circumstances.

If your spouse, civil partner or cohabitant is getting a social welfare payment in their own right you are assessed differently - see below.

If your spouse, civil partner or cohabitant is employed, only a certain amount of their income from work is taken into account when calculating your Jobseeker’s Allowance payment.

To work out their means from employment, you carry out the following calculation:

1. Find their average gross weekly assessable earnings (average earnings in the last 13 weeks)
2. Deduct PRSI, pension contributions and union subscriptions from the gross average earnings
3. For each day worked (up to a maximum of 3 days) subtract €20.
4. Assessable means for Jobseeker’s Allowance purposes are 60% of the remainder.

If your spouse, civil partner or cohabitant is self-employed all their income from self-employment is counted in the means test. Your spouse or partner's earnings are assessed as gross income less work-related expenses over 12 months. Any weekly means from self-employment are subtracted from the overall amount of Jobseeker’s Allowance payable for your situation.

See below for how income from any other source is treated in the means test.

You can read more about Claiming for adult and child dependants. Note that the means test for Jobseeker’s Allowance treats your spouse, civil partner or cohabitant’s income in a different way than means tests for most other social welfare payments.

My spouse is getting a social welfare payment – how is that treated in the means test?

If your spouse, civil partner or cohabitant has a social welfare payment in their own right (with some exceptions such as Child Benefit, Domiciliary Care Allowance, and Supplementary Welfare Allowance) you cannot claim a an Increase for a Qualified Adult for them. This means that the maximum you can be paid is the maximum Jobseeker’s Allowance payment for a single person plus a half-rate allowance for each qualified child. (Your spouse, civil partner or cohabitant will get a half-rate payment for each qualified child with their payment.)

In addition only 50% of your combined means are taken into account in the means test for your Jobseeker’s Allowance.

However if you are claiming Jobseeker's Allowance and your spouse or partner is getting one of the social welfare payments listed below, the total amount paid to both of you cannot be more than would be payable if only one of you was claiming and the other was an adult dependant.

• Illness Benefit
• Disablement Pension (when paid with Injury Benefit or Incapacity Supplement)
• Injury Benefit
• Invalidity Pension
• State Pension (Non-Contributory)
• State Pension (Contributory)
• State Pension (Transition)
• Jobseeker's Benefit
• Jobseeker's Allowance
• Pre-Retirement Allowance (PRETA)
• Farm Assist (FA)

How is income from other sources treated in the means test?

If you own property that you are not personally using or if you have investments or any other form of capital, the value is assessed, using a standard formula. You may or may not be getting an income from the property or investment. Income from other sources includes any income your spouse, civil partner or cohabitant may have.

The formula for assessing the means from capital for all social welfare payments (except Disability Allowance and Supplementary Welfare Allowance) is as follows:

Capital	Weekly means assessed
First €20,000	Nil
Next €10,000	€1 per €1,000
Next €10,000	€2 per €1,000
Balance	€4 per €1,000

The house in which you live is not included in the assessment of your means unless you are getting an income from it. If you have rented a room in the house, that income is usually assessed. Read more about how means from capital is assessed.

If you are 24 years of age or under and you are living with a parent or a step-parent in the family home, some of your parents' income will also be taken into account in the assessment for Jobseeker's Allowance. The Department call this an assessment of the 'benefit and privilege' you get from living with your parents. Find out more about how living with your parents is assessed in the means test.

How is property apart from my home assessed?

If you own a second house and the house is let, you will be assessed on the capital value of the property. You will not be assessed on the actual income from the letting. Any outstanding mortgage registered against the property is deducted from the market value to find the capital value.

However, if the mortgage on the home in which you live has been re-structured to raise capital to buy the second property, this re-structured mortgage will not be deducted from the capital assessment of the second property. If your spouse or partner owns property or has other assets they will be assessed in the same way.

Read more about how the Department of Social Protection calculates your means.