Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698927282925.pdf (United Kingdom)
New Enterprise Allowance Contents New Enterprise Allowance Claimants who are not currently Self Employed Initial assessment • Eligibility • • Enhanced mentoring offer • Conditionality during mentoring phase • Business development phase • Post trading support / NEA allowance • Universal Credit claim closes during post trading support • Taking up employment with wages • Conditionality – new business starts • Claimant commitment – new business starts • Sanctions – new business starts Claimants who are currently Self Employed • Eligibility • Initial assessment • Mentoring support • Claimant Commitment Information relevant to new business starts and existing self-employed claimants • Claimant moves area • Inappropriate referrals • Referrals - claimant has previously been on NEA • NEA new business starts – return to NEA • Existing self-employed claimant – return to NEA New Enterprise Allowance The New Enterprise Allowance (NEA) programme supports unemployed people who want to start their own business and move into self-employment.
It also supports some existing Universal Credit self-employed claimants; however, they are not entitled to the allowance element of NEA.

Travel and childcare costs are not available through NEA funding, although it may be decided that they can be funded from the Flexible Support Fund.

Additional support and reasonable adjustments required by claimants participating in the NEA mentoring stage, for example a translator or signer, must be met by the Provider.
Claimants who are not currently self-employed Eligibility No new referrals can be made to New Enterprise Allowance (NEA).

However, some claimants who were previously referred to NEA may be allowed to return to the provision to complete their remaining balance of time.

For more information, see: NEA New Business Starts - Return to NEA.

Claimants must still meet the eligibility criteria to return to NEA.
Claimants must be: • unemployed • aged 18 or over • not participating in other DWP contracted provision • have the right to reside and take up employment in the UK There is some discretion if the level of trading is low, for example a claimant may have been baking cakes for special occasions without the aim of making a living wage.

This is not a business but the claimant might want to turn it into a business with the intention of making profit.
The business does not need to be developed and organised to participate in NEA.

The claimant only needs to have the aim of turning it in to an organised business.

A claimant does not need to be gainfully self-employed (GSE) to be eligible.
A table showing the claimant group and eligibility Claimant group No work related requirement due to sickness or disability, or significant caring responsibilities, for example for a severely disabled person Lead carer with a child under one Work Focused Interview only Note: Claimants in the groups above are eligible, unless they have stopped running their own business within the Day 1 eligibility Eligible Eligible Eligible last 3 months, if this is the case they cannot join NEA until 3 months after the business ended and their business idea must be clearly different from their previous business Work Preparation Group Intensive Regime, see exceptions below Note: Claimants in the intensive work search regime (IWSR) are eligible, unless they: • have, or have had a sanction because they left their last job voluntarily or were dismissed for misconduct, if this is the case claimants can't join NEA until they have had an award of Universal Credit for 3 months • have stopped running their own business within the last 3 months, (if this is the case they can't join NEA until 3 months after the business ended and their business idea must be clearly different from their previous business Earning below the individual Administrative Earnings Threshold (AET) but in a household earning above the couple AET Out of work with a partner earning above the couple AET Over State Pension Age, see note below Note: NEA is a programme for working age claimants.
Care must be taken when considering referring someone who is close to State Pension Age as eligibility for NEA, (including the weekly allowance,) ceases at the point they receive State Pension.

Claimants in this position must be made aware of this.
Eligible Eligible Eligible Eligible Not eligible Carers in receipt of Carers Allowance Working Enough Working, earning above the individual AET but below the CET Not eligible Not eligible Not eligible Initial assessment The initial assessment is arranged within 10 working days of the referral date.

Some claimants may have attended a Link Up: Start Up workshop where they discussed the responsibility and commitment of being self-employed.
Claimants must attend the initial assessment within 6 months of attending the LU:SU.

If longer than 6 months, they will no longer be able to participate.

The provider will assess their business idea and decide whether the claimant would benefit from participation on the scheme.

The results are recorded on the ‘Find and Refer’ system within 15 working days of the referral.

Enhanced mentoring offer Claimants accepted on to the New Enterprise Allowance scheme will then receive an enhanced mentoring offer.
This includes: • mentoring support for up to 12 weeks with a minimum of 3 mentoring sessions • development of a business plan with support from the NEA provider • additional workshops covering key areas, for example financial planning and marketing support.

The provider is responsible for assessing and approving the participant’s business plans.

They will provide the participant with feedback after the assessment, this will be within 12 weeks of the start date.
If the claimant is without an approved business plan after 12 weeks and is still working with their mentor, they must have a progress review.

The NEA provider should have provided an update on the claimant’s progress on a New Enterprise Allowance and Mentoring provider feedback form (UCNEA1).

If this has not been received, the NEA provider must be contacted for a progress report.
During the review the following should be established: • why has the business plan not been completed in the expected timescale?

• how much time has the claimant dedicated to developing their business • plan?

if this is less time than their circumstances can reasonably allow, why have they not put in more effort?

Based on the responses and feedback from the NEA provider, a decision must be made between removing the claimant from NEA or extending their time on the scheme.
If an extension is appropriate, the work coach and their manager must determine if an extension is appropriate and for how long.

Conditionality during mentoring phase Claimants in the Intensive Work Search regime must attend meetings but they do not have to work search.

The meetings are intended to ensure they are developing their business proposal and attending all meetings with their mentor.
Claimants are expected to engage fully in the New Enterprise Allowance scheme and participation should be included in any claimant commitment, along with any agreed work search activity.

For claimants in the Intensive regime, failure to fulfil these requirements may lead to a sanction.

Claimants in all other groups must attend work focused interviews as required.
The claimant’s participation on NEA must be reviewed to ensure self- employment remains a realistic option and the most suitable route for the claimant.

Claimants who start trading within the mentoring phase and have been deemed gainfully self-employed for Universal Credit purposes will not be subject to conditionality.

Business development phase This is a voluntary phase of up to 13 weeks after the business plan has been signed off.
The business development phase will: • allow participants who are not yet ready to commence trading to undertake activities aimed at building a successful platform to launch their business, such as market research or applying for a start-up loan • help ensure claimants are in a better position to start earning money from their business as soon as they start trading.
It may also help them to be better prepared for the Gainfully Self-Employed test Post trading support / NEA allowance Post trading mentoring support is available from providers for up to 52 weeks to those with an approved business plan who commence trading and are eligible for the New Enterprise Allowance (NEA) allowance.
NEA allowance: is paid over 26 weeks and is worth up to £1274 • • can be claimed once the claimant has commenced trading and within 13 weeks of the claimant’s business plan being approved.
Note: If the NEA participant has not been able to commence trading within 13 weeks of their business plan being approved for reasons beyond their control, there is discretion to extend this period within reason • must be claimed within 5 weeks of the date trading commenced NEA allowance is disregarded for the purposes of Universal Credit.

Claimants in receipt of NEA weekly allowance must provide evidence they are still meaningfully engaged in running their business at weeks 6,12 and 19.
The mentor will continue to support claimants while they are getting the weekly NEA payment.

Claimants who decide to start trading before their business plan has been approved can do so.

However, they should be informed that they can only claim the allowance after their business plan has been approved, and they must claim it within 5 weeks of starting to trade.

Therefore, those who commence trading prior to business plan approval, run the risk of making themselves ineligible for the allowance.
To be considered as ‘Trading’ for NEA purposes, the participant needs to be able to demonstrate that they are working in their business for at least 16 hours per week and in a position of offering goods or services for sale.

They do not need to have generated any income yet to be considered to be trading.
Universal Credit claim closes during post trading support Where a claimant’s Universal Credit claim closes during the post trading support phase they can continue to receive NEA support and the NEA weekly allowance if it is in payment.

In order for these to continue claimants must provide evidence that they are still meaningfully engaged in running their business at week 6, 12 and 19.
Start-up evidence checks will need to be arranged to keep a separate track of the claimant in the absence of an open Universal Credit claim.

These checks can take place as an appointment.

These checks must be completed to ensure that the claimant is still meeting the requirements to be entitled to NEA support or the NEA weekly allowance.

This applies when a claim closes due to earnings, a change of circumstances or when a claimant chooses to close the claim.
Taking up employment with wages A New Enterprise Allowance weekly allowance applicant or recipient may take up employment with wages to supplement their income while their business builds up.

If the employment with wages starts, or started, after trading commenced, the allowance will be payable as long as the claimant continues to trade their business for at least 16 hours per week.
The claimant will move to either the All work related requirements, light touch regime or no work related requirements working enough regime.

Claimants who move into self-employment will require a gainful self-employment test, following the NEA stage.

See Self-employment and gainfully self-employed).

Conditionality – new business starts Conditionality will only apply to some of the new business participants of New Enterprise Allowance (NEA).
Claimants in the intensive work search regime (IWSR) are required to attend regular work search reviews while on the mentoring and business development stages of the programme.

During the mentoring period these claimants do not have to undertake work search.

The review meetings are intended to ensure that they are attending all the required meetings with their mentor.
The claimant commitment for these claimants must be tailored after the first meeting with their mentor following acceptance on to NEA, see Claimant Commitment.

The revised conditionality can last no longer than 12 weeks after the first meeting with the mentor.

After the 12 week mentoring period, IWSR claimants that move in to the business development stage before they start trading will be subject to a work search requirement that means they should spend up to 35 hours per week looking for employment.
During this time, any business preparation activity a participant undertakes, including working on their business plan, can be counted toward their work search requirement.

Claimants in other conditionality groups must attend work focused interviews as required.

A claimant’s participation on NEA must be reviewed to ensure that self- employment remains a realistic option and NEA is the most suitable option for the claimant.
Claimant commitment – new business starts The claimant commitment must explain any requirements of the claimant participating in New Enterprise Allowance the consequences of not meeting them.

See Sanctions.

Sanctions – new business starts Claimants in the intensive work search regime will be subject to a sanction if, without good reason, they fail to fulfil the participation requirements of New Enterprise Allowance as set out in their Claimant Commitment.
The claimant must: • attend all appointments with the mentor / mentoring provider organisation if • • given at least 24 hours’ notice of the appointment take action each week to develop the business proposal tell Universal Credit if the business idea is no longer being pursued and / or the mentoring relationship ends Failure to comply for no good reason may result in a low level sanction.
Claimants who are currently Self Employed Eligibility Existing self-employed claimants are eligible for New Enterprise Allowance (NEA), but not the allowance element of NEA, if they meet the following eligibility criteria: • have the right to reside and take up paid employment in the UK • have an existing structured and organised business and are reporting self- employed earnings • had previously been trading in businesses that were their main source of earnings, main employment, and the business is still in existence but has paused trading due to the impact of Covid-19 • currently trading and reporting earnings and want to grow their self- employment into a full time business • doing self-employed work on a part-time basis and want to move in to full- • time self-employed work require support with developing their existing business which is currently their main source of income.
Claimants do not need to be gainfully self-employed.

Suitable claimants are likely to: • be doing self-employed work on a part-time basis and want to move in to • full-time self-employed work require support with developing their existing business which is currently their main source of income NEA weekly allowance is not available for NEA Existing self-employed Support.
Participants will however receive improvement support for up to 52 weeks after the approval of their Business Development and Growth plan.

Initial assessment Existing self-employed claimants do not attend a Link-Up: Start-Up (LU:SU) workshop.

Providers will conduct an initial assessment with participants within 15 working days of the referral date.

The results are recorded by the provider on ‘Find and Refer’ within 20 working days of the referral.
The provider will assess if the claimant is suitable for New Enterprise Allowance, an unsuitable claimant could be someone whose business does not have the potential to grow.

Mentoring support Mentoring support for the existing self-employed claimants: • lasts for up to 12 weeks • has a minimum of 3 mentoring sessions over the 12 weeks • includes additional workshops, for example on financial planning and marketing support Mentoring support is based around developing a business development and growth plan.
This includes short, medium and long term activities aimed at improving business earnings and therefore, business sustainability.

Once the business development and growth plan has been assessed a period of 12 months’ business mentoring support will follow.

The New Enterprise Allowance provider will provide key feedback on the claimant’s progress.
Claimant commitment For existing self-employed claimants in the start-up period, participation in the New Enterprise Allowance scheme can be recorded on their claimant commitment and count towards achieving their active steps to grow their earnings.
Information relevant to new business starts and existing self- employed claimants Claimant moves area If after commencing trading a claimant moves area and will continue to trade, their New Enterprise Allowance weekly allowance will continue to be administered by the jobcentre they dealt with initially.
Inappropriate referrals Where through official error the claimant has been incorrectly referred to New Enterprise Allowance but wishes to continue on the programme, they should be allowed to complete the programme and receive the allowance if applicable.

If you are unsure about a particular case, please raise an Agent Contact Template (ACT).
Referrals – claimant has previously been on NEA A claimant who has previously taken part in New Enterprise Allowance may return to complete the balance of time on the current referral, depending on the circumstances.

For claimants who previously claimed the NEA weekly allowance, particular attention must be given to: • why did they cease trading?

• if they propose the same idea, have their circumstances changed, or have any issues that led them to cease trading been resolved?
(Unless there are specific reasons, nobody should be referred to NEA to pursue a business that has already failed once.

The NEA support will be the same as it was the first time so the claimant is unlikely to benefit any further going through the same process a second time).

• not making a referral just to enable them to receive the weekly allowance.

This, on its own, is not a suitable reason for making a referral to NEA.

NEA new business starts - return to NEA No new referrals can be made to NEA.
However, some claimants who have previously been referred to NEA may be allowed to return to complete the balance of time on their current referral.
Claimants cannot return to complete the balance of time on their current referral where: • the break has occurred before the Business Plan was signed off • within the 26-week period following the claimant starting trading, the claimant has had a break of more than 13 weeks In both the below cases they can return to provision and start where they left off, and receive the balance of time of any NEA support, as long as this occurs within the 92 weeks allotted time period and the provider agrees to the return.
is unable to continue for a period of 13 weeks or less • • has a break in provision during weeks 27 to 52 of trading, and asks to return?

The previous referral will still be open.

In both scenarios, the Provider must be contacted to explain the circumstances of the case, and to discuss the feasibility of the claimant resuming the mentoring relationship at the point they left.
If it is feasible, then: • agree arrangements for resumption of the mentoring relationship with the Provider • explain to the claimant that the time previously spent on NEA will count towards the total time allowed under NEA • make appropriate arrangements with the Provider to review the claimant’s progress • update the claimant commitment with details of the resumption on NEA Existing self-employed claimant - return to NEA A return to New Enterprise Allowance to the mentoring stage can be considered, assuming the claimant remains eligible.
The actions to take depend on whether it is a new business idea or not.

Claimant wishes to develop a different business idea Claimants cannot return to a previous NEA referral if they wish to develop a different business.

Other support must be considered as no new referrals to NEA can be made.
Claimant wishes to develop the same business idea As long as the claimant is still within the 66 week allotted time period they are able to return to provision and receive the balance of the New Enterprise Allowance (NEA) support offered, with the agreement of the provider.

The Provider must be contacted to explain the circumstances of the case and discuss the feasibility of the claimant resuming the mentoring relationship at the point they left.
If it is feasible, then: • agree arrangements for resumption of the mentoring relationship with the Provider • explain to the claimant that the time previously spent on NEA will count towards the total time allowed under NEA • make appropriate arrangements with the Provider to review the claimant’s progress • update the claimant commitment with details of the resumption on NEA The previous referral will still be open in Find and Refer.