Capitalize on unemployment

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Capitalizing unemployment is also known as one-time payment or compounding of unemployment. Es una práctica según la cual las persons que cobran la prestación por desempleo, y quieren iniciar una actividad por su cuenta, pueden solicitar que se les abone, en una sola vez, la totalidad o parte de la prestación por desempleo que quede por cobrar.

In other words, the SEPE advance the unemployment benefit money that remains to be received in a single payment, in such a way that capital is obtained that must be used to start the business that is launched.

From this definition, several points must be explained:

1. That you must register as a self-employed person. En realidad, capitalizar el desempleo conlleva que vas a poner en marcha tu propio negocio, y para esto debes estar registrado en el RETA (Régimen Especial de Autónomos). Otra alternativa es que seas miembro de una sociedad limitada o un socio de trabajo, ya be una cooperativa o una sociedad laboral.
2. That this one-time payment should be used to invest in the business. (becoming in some way the capital of that company).

Who can ask to capitalize on unemployment?

Obviously, the people who can apply to capitalize on unemployment are those who are receiving unemployment benefits (in other words, they are collecting unemployment benefits). However, this unemployment benefit should not be confused with unemployment benefit. In this circumstance, you can only capitalize it if you obtain the tax benefit.

At the same time, another series of requirements on the part of the person requesting it, such as:

• That the duration of the benefit is at least three months from your request.
• Not be registered with Social Security.
• Not having benefited from a single payment before (they put a limit of four years, in other words, every four years you could get it).
• Show that you are registered as a freelancer or as a work partner.
• Not having contested the dismissal. If so, you won't be able to take advantage of the strike until the challenge is resolved.

Advantages of capitalizing unemployment

Now that you understand what it is to compound the payment, making the decision to do it or not will depend on many factors, as well as the situation in which you find yourself.

Thus, among the advantages of capitalizing are:

• The power to collect everything at the same time. From this dynamic, you should not wait to get the money and be able to complete the projects you have, but they advance you the unemployment money so that you can get going as soon as possible. Of course, remember that once requested, it is not immediate, but a month passes.
• You can select how to receive it. In other words, receive it all at once or monthly (thus reducing the costs of the contribution subsidy).

Drawbacks

Everything good has some "less good" aspects, and in this circumstance we are talking about:

• Consume right to benefit. To capitalize on unemployment, you need a project and become autonomous; That means that you are going to consume what they give you as a benefit in a business that can be successful, or that can end the money you have advanced (and be left with nothing).
• There is discrimination. I'm Sorry, but it's like that. Men under 30 years of age, and women up to 35 years of age, can capitalize 100% of unemployment, but beyond that age they will only be able to capitalize unemployment by 60%, the remaining 40 being for the application of the unemployment contribution.
• Subsidies for fees are lost. This is because if you make an error in the application, you pay for the error by losing the 40% of the subsidy that is due to you.

Types of capitalization

Another aspect that you should pay attention to is when capitalizing unemployment, since it can be done in two different ways:

• Capitalize on 100%, In other words, receive all the money that is missing from the unemployment benefit at once to finance the investment required by the company.
• Take advantage of monthly payments. This money is later used to offset the self-employed fees, such that part of your unemployment is used to pay the self-employed monthly fee and other possible expenses.

How to capitalize on unemployment

If after reading everything, and getting informed, you decided to capitalize on the strike, you should know what are the steps you must follow to do so. In this circumstance, the first thing you should do is go to the State Public Employment Service, in other words, the SEPE. Go to the office that corresponds to you (always by appointment so that they can attend you without making you wait too long).

They will inform you of the single payment and, if they see that you are decided, you must complete an application, also attaching a report of the activity you are going to develop, as well as the investments that you are going to face. Of course, remember that the amounts you put must be without VAT, because VAT cannot be subsidized.

It may be that the most complex thing for you is to prepare the project report, but on the Internet you can find many Word templates that will help you to do it easily. Or, in case you don't know or don't want to be wrong, you can always Enlist the help of a manager or advisor to prepare it according to what they request.

Once you deliver everything, at the same time as proof that you are registered as a self-employed person, the following month they will charge you, if all goes well, the one-time unemployment payment.