Imagine that you are unemployed. Luckily you have unemployment benefit, unemployment, which enables you not to overwhelm yourself too much at the end of the month due to money coming into the house. However, you have a project that you would love to start and all you have left is money. So why not capitalize on unemployment?
This strange concept is increasingly used by many unemployed who decide to invest the money from the payment in creating a company or business with which to earn more but, What does the compounding of unemployment refer to? How can this be done? What are its advantages and disadvantages? All this and much more is what we will talk about next.
What is capitalizing unemployment?
Capitalizing unemployment is also known as one-time payment or compounding of unemployment. It is a practice according to which people who collect unemployment benefit, and want to start an activity on their own, can request that they be paid, in a single time, all or part of the unemployment benefit that remains to be collected.
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:
- That you must register as a self-employed person. In reality, capitalizing on unemployment means that you are going to start your own business, and for this you must be registered with the RETA (Special Regime for Self-Employed). Another alternative is that you are a member of a limited partnership or a work partner, be it a cooperative or a labor partnership.
- 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.
