How a sole proprietor can receive partial unemployment benefits for himself

Recently, the legislators approved Procedure No. 453 dated 03.06.2020, which provided for the possibility of applying for and receiving partial unemployment benefits for sole proprietorships.

Who can receive partial unemployment benefits?

The Employment Center states that in order to receive financial assistance, entrepreneurs must meet the following criteria:

• а sole proprietor is not a pensioner;
• temporarily ceased or reduced operations due to quarantine and therefore lost part or all of its income;
• paid the unified social contribution for themselves 6 months before such a reduction or temporary suspension of activities (this condition does not apply to sole proprietors with disabilities).

As for the presence of employees, the position of the Employment Center contradicts the Procedure. The Employment Center insists on the absence of employees, but the Procedure provides for financial assistance to all sole proprietors, regardless of the presence or absence of employees.

Sole proprietors have 90 calendar days from the date of termination or suspension of their activities to receive assistance.

What is the amount of financial assistance provided?

The amount of partial unemployment benefits for individual entrepreneurs will be ⅔ of the unified social tax base. The ERU accrual base is equal to the average monthly ERU accrual base for 2019 according to the ERU Report in the form of No. D5.

If in 2019 you paid the unified social contribution for yourself from the minimum wage, you will receive UAH 2782 (4173 * ⅔). If you paid the unified social contribution on more than the minimum wage, then there is a chance to receive a larger amount of assistance, but not more than the minimum wage in 2020, i.e., you will not receive more than UAH 4723. In general, you can apply for assistance from UAH 2782 to UAH 4723.

Separate attention should be paid to sole proprietors with disabilities, as they are exempt from paying the unified social contribution for themselves. They are entitled to an allowance of ⅔ of the minimum wage, but it is not specified for which year, so logically, we take the minimum wage for 2019 and receive an allowance of UAH 2782.

Can a sole proprietor who has stopped operations during the quarantine but received income under previously issued invoices receive assistance? Yes, they can, because there is no direct prohibition in either the Procedure or the Employment Law.

What documents do I need to receive assistance?

In order to receive partial unemployment benefits, a sole proprietor must submit the following documents:

1. Application. It is made in any form and addressed to the director of the employment center. The text of the application may be as follows: "I am applying for partial unemployment benefits for the period of quarantine established by the CMU to prevent the spread of coronavirus in Ukraine due to the suspension (termination) of my business. I further inform that I am an insured person and a payer of the single social contribution."
2. A copy of the order to suspend (reduce) activities with the date of commencement.
3. Completed Appendix 2 of Order No. 453. It must contain the entrepreneur's data and account details (either business 2600 or personal). In the column for the number of hours of normal working hours, you must indicate the working hours for employees, i.e., at the rate of 40 hours per week and two days off. For April - 167 hours, for May -151 hours. In the column for the number of hours of partial unemployment, calculate the number of days in the month when you did not work, taking into account the 5-day work week, and multiply by 8 hours.
4. A certificate of payment of the unified social contribution for the last 6 months preceding the date of reduction or termination of activities. You need to make such a certificate yourself. It should indicate the date, amount and payment order details when the payments were made. If you did not pay ERUs for March and April because you used the exemption, you simply put a dash through it. Sole proprietors with disabilities do not submit such a certificate, as they are exempt from paying the unified social contribution for themselves.

Partial unemployment benefits are not subject to personal income tax and military duty.