Income Support, Training and Health Benefits (ISTHB) Regulation, sections 23(3)(b), 23(4)(a), 23(4)(c) and 23(5)(b)

POLICY

Self-Employment Income
Self-Employment income means all self-employment income, including income earned from a home-based business.

All net self-employment income is deducted dollar for dollar from program benefits, and is coded as 4303 Self-Employment.

There are exceptions, depending on the client type or business type, where exemptions can be applied to some self-employment income:

• An Income Exemption is applied to Self-Employment Income for:
  
  • the adult member providing child care in their own home;
  • the adult member in the Barriers to Full Employment (BFE) category operating a home-based business; and
  • any dependent child operating a home based business.
    
• For those who are eligible to receive the earnings exemption, the self-employment income is coded as 4104 for the Head of Household 4105 for a Partner, and 4103 for Dependent Child(ren).

Self-Employment Expenses
All self-employment applicants and recipients are allowed to deduct specified expenses from gross self-employment income to calculate net self-employment income.

Allowable deductions to determine net self-employment income are as follows:

• All employment related deductions defined under ISTHB Regulation, Section 23(4); and
• All deductions required by law, including business taxes and business license fees; and
• Reasonable cost of materials, supplies, goods and services that are essential to the business or farm operation, specifically:

   

  • Interest (but not principal) payments on a loan made for the purpose of the business

     

  • Advertising costs, accounting and legal fees, bank service charges

     

  • Insurance, license, rental, repair and operating expenses of motor vehicles and equipment essential to the business operation

     

  • Delivery, express and freight charges including postage

     

  • Veterinary services related to the business or farming operation

     

  • Business-related facility costs:

     

    • lease payment
    • mortgage interest but not principal payment,
    • property tax,
    • fire insurance,
    • liability insurance,
    • telephone,
    • utilities, and
    • reasonable maintenance and repairs

Substantiation

The business person or farmer reports net self-employment income and changes in assets through their monthly reporting.  To assist clients in determining their net self-employment income, clients may complete the EMP 5515 Net Self-Employment Income form. The worker may ask them to submit this document as substantiation of net self-employment income.