Self-Employment Assistance Programs

• Seven states -- Pennsylvania, New Jersey, Maryland, Maine, New York, Delaware and Maine -- offer self-employment assistance programs for eligible unemployed individuals who choose to start their own businesses instead of re-entering the traditional workforce. These programs pay a weekly self-employment allowance in lieu of standard unemployment benefits. The amount you will receive under a state's self-employment assistance program is typically identical to the amount you would receive in unemployment insurance benefits.
  
  

Eligibility

• To become eligible for benefits under your state's self-employment assistance program, you will need to meet the same criteria required by your state for unemployment benefits. Generally, you must have lost your job through no fault of your own -- being terminated for "just cause" or quitting your job will typically disqualify you from receiving benefits. You will need to have met your state's income requirements while you were employed. Also, your state must typically identify you as being likely to exhaust traditional unemployment benefits.
  
  

Other Requirements

• If you qualify for your state's self-employment assistance program, you will not have to provide documentation of job search efforts as you would for traditional unemployment benefits. However, your state may impose requirements related to building your business. For example, New Jersey requires a 60-hour business course. You may also need to provide documentation showing that you are devoting full-time hours to your business, as well as evidence that you can obtain the financial resources necessary to sustain your business, to receive benefits under the program. Your state may also provide resources such as technical assistance and access to counselors who can help you develop a business plan.
  
  

Applying for Benefits

• Contact your state's unemployment department for information on applying for self-employment assistance program benefits. In most states that offer this program, you will need to meet with a counselor to discuss your business idea and apply for the program. If you are approved for the program, your counselor will help coordinate training courses or other requirements you will need to meet in order to receive benefits.