Legislation extending the U.S. payroll tax deduction in February included changes to the Self-Employment Assistance (SEA) voluntary program that allows states to pay a self-employment allowance to unemployed individuals who are in the process of establishing businesses and realizing the dream of self-employment.
The National Association for the Self-Employed (NASE) and other small business organizations previously expressed a desire to see these types of programs extended and embraced by all 50 states; currently only Delaware, Maine, New Jersey, New York, Oregon, Pennsylvania, and Washington have adopted SEA programs. We have called upon Congress to help pass legislation that would assist all states in launching self-employment training programs for residents. These training programs should be available free to all unemployed citizens providing them with an avenue to create their own job, should they be unable to find one.
The changes in SEA include making available Federally-financed unemployment benefits to the program, additionally, the bill directs the Department of Labor and Small Business Administration to provide technical assistance to states that are interested in establishing the program. Perhaps the biggest incentive for states is the inclusion of $35 million dollars to help states administer the SEA program. Previously the state absorbed the costs of developing and maintaining the program.
In most cases, an individual must be eligible to receive regular unemployment insurance under State law. Those who have been permanently laid off from previous employment and are deemed by the State as likely to exhaust unemployment benefits are eligible to participate in the SEA program. Individuals may also be eligible even if they are already occupied by full-time self-employment activities, such as training, business counseling and technical assistance.
NASE hopes that states will embrace the SEA program and use the new funding streams to quickly implement a program that will translate into “real” opportunities for budding entrepreneurs to launch their businesses and become engines of economic growth.
NASE is a fervent supporter of federal small-business programs that have a proven track record of efficiently aiding very small businesses and the self-employed, such as the SBA Office of Advocacy, Small Business Development Centers and the SBA Microloan Program. We hope to add the SEA program to that list should it prove to be positive for business owners.
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