#Budget18 case study: Self-employed benefit but still left exposed
She founded her health foods business Homespun in June 2016 and her Cork-made Quinoa Crunch is already stocked in stores nationwide.
“I’ve funded the growth of the company almost exclusively through my own savings but I’ve been able to tap into some supports provided by my Local Enterprise Office which has been helpful in enabling me to get the business off the ground,” she said.
“I was also really fortunate to win a place on the Enterprise Ireland New Frontiers programme, which gave me an injection of €15,000.
“That was a tax-free sum of money and the programme came with really beneficial tuition and mentoring aimed at developing you as an entrepreneur. It’s been the single most significant support I’ve benefitted from to date and it’s a superb programme I’d recommend to anyone with a start-up business.”
However, she believes that there are practical measures that can be taken to help the self-employed.
“Entrepreneurs take risks; they’re building businesses that often end up employing people and generating value, which is advantageous for our society and economy.
“But we’re also quite exposed. For instance, at present, the self-employed can’t pay into a PRSI scheme like PAYE workers do and consequently, we don’t have social welfare benefits in the event of sickness to fall back on. There is no safety net.”
Yesterday’s budget means the self-employed will pay €200 less a year in tax from 2018 after the Government decided to extend the earned income tax credit to €1,150.
Homespun, which has won several food awards, will now begin to export, having won a contract to supply the Dubai-based retailer Spinneys, which has 50 high-end grocery stores. It is also in talks with UK retailers.
Separate to her her own business, Erica believes there are other practical measures the Government could take to help entrepreneurs.
“A self-employed woman is only entitled to the State maternity benefit, which is €235-a-week but if you were in paid employment you’d usually get about six months of paid maternity leave.
“That’s a huge difference and can act as a disincentive and a barrier, particularly for women, considering setting up their own businesses and I think even a modest recognition of that gulf that exists there would be a positive development,” she said.
