Would you like to replace your monthly unemployment benefit with a lump sum to start your own business? The Employment Promotion Act (EPA) provides for this possibility, but the process is being developed in a complex proceeding. Here's what it looks like in a nutshell:

1. Who can apply?

Unemployed persons entitled to a benefit under the Social Security Code (CSC) can benefit from the possibilities of Article 47 of the Social Security Act. You can act alone or in cooperation with others, including members of your family.

2. What is needed?

The first step is to submit a written application to the local Employment Agency (EA), expressing your wish to receive a lump sum in lieu of unemployment benefit. You must enclose with your application a business project for the activity you plan to develop. There is no problem if the project is prepared by external specialists; it is possible that the costs of such consultancy services will be reimbursed under Article 49b of the ILO.

3. Business project approval

Your business project will be reviewed by a specialised committee at the TA of AZ. The committee will make a reasoned written proposal to the Director of the PA for approval or rejection of the project.

4. Contract conclusion and payment of the amount

If your project is approved, the Director of the TA will sign a contract with you. For this purpose, you will be provided with certified copies of the unemployment benefit order and a statement of the benefits already paid by the TA of the National Social Insurance Institute (NSI). The contract will also specify the time limit for starting the business. Once the contract has been concluded, the NSI will transfer the lump sum.

5. Business registration

As a person benefiting from the regime under Article 47 of the NPA, you are obliged to register the business activity under the approved business project in accordance with the legislation in force. In other words, you should organise the establishment of a company under the Companies Act, become a partner in a trading company or otherwise formalise your business activity.

6. Additional support options

In addition to the lump sum, the legislation also provides other opportunities for unemployed persons who start a business under Article 47 of the NPA:

Qualification credit: You can receive a credit for training in the subject of the business and/or its management if it is included in the basic contract and takes place within its duration (Art. 30a (1) (12) of the Employment Act). Note that this credit is refundable if you do not successfully complete the course or do not submit the required documents.
Funds for employing unemployed persons. Under Article 30.1(13) of the Unemployment Benefits Act, funds may be made available for the employment of other unemployed persons who are not entitled to cash benefits.

If you think one of the above options is suitable for you and you need assistance, please do not hesitate to contact us.