The UWV (Uitvoeringsinstiuut WerknemersVerzekeringen/JCP Jobcentre Plus) offers several ways of starting one’s own business while still being entitled to benefits. You will, however, have to make an appointment with your job coach before you start actual preparations for your own business. Please note: if you should register with the Chamber of Commerce before conferring with your job coach, your benefit payment will be terminated.
Starting up and retaining your benefits
The UWV has come up with a fantastic arrangement for people, who whilst retaining their benefits, want to set up their own company. You will need your UWV job coach to grant you permission. Together you will work to assess your plans and you will be given advice. Should you receive a positive advice, then you may start up your company for a period of 26 weeks, whilst your benefits will be offered as an advance.
After two years the UWV will, depending on your profits, claim a certain amount of the offered advance. The higher your profits, the higher the amount you will have to refund. This amount will, however, never be higher than the amount of the benefits received by you in the first place. The UWV compares and calculates the amount based on your tax declaration. Please take this into account! When setting up business from a benefits situation hours worked will not be deducted.
The number of hours worked do count for the hour criterion of the tax authorities. The right to Entrepreneurs Deduction starts after at least 1225 hours worked.
Surrendering part of your benefits based on hours worked
There is another way of setting up your own business while retaining part of your benefits. In this scenario you will voluntarily surrender part of your benefits. You will not need permission from your job coach for this. You will need to report it. In fact, you will be starting up your own business part-time while still retaining your benefits based on the agreed hours. Over the hours for which you will still receive benefits, the obligation to apply for jobs remains in place.
To ZZP (Self-Employed) Nederland this is a very dangerous and unfavourable arrangement
In case of you spending fewer hours on your own business than first intended, it will not be possible to readjust your benefits, you will lose all rights regarding the former benefit situation. Moreover, the danger with this arrangement is also that people will spend more hours on their own business than was agreed with the UWV. Sadly the UWV also counts the ‘unpaid hours’ that you spend on doing your accounts, travelling, acquisition etc. In the past, this fact was not made clear by the UWV which meant that benefits recipients only declared the hours they could declare. The tax authorities have set a minimum of 1225 hours annually for you to spend on your business in order for you to be able to collect Entrepreneurs Deduction. This arrangement causes beginning entrepreneurs to estimate as many hours as possible just to get to the minimum of 1225. Because benefits recipients put in the actual ‘working hours’ with the UWV and all hours with the tax authorities, they found many discrepancies when they compared the numbers. The UWV has fined many a innocent starting entrepreneur for fraud because of the unclear arrangement.
Source: I website UWV. I