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Unemployment Benefits if I start my own business

by Allen
(Montclair, CA)

I am a CA resident and worked for a company 20 years. I will be laid off next month. I am eligible to claim unemployment insurance but I am unsure what implications on my eligibility for unemployment insurance would be if I start my own business right after I get laid off.


1. Would starting my own business, thereby filing a Schedule C, prevent me from qualifying for unemployment insurance?

2. If it does prevent me from qualifying for unemployment insurance, to what extent? Totally or partially?


Hi Allen,

The issues I see as being your problems and would probably also be problems for the EDD to resolve are "able and available for suitable work", "actively seeking work" and then of course whether you earn any money from your business.

Read more about Able and Available determination while self employed here.

I, just like the EDD, would need to ask more specific questions to resolve the issues with regard to how your benefits would be effected.

But this brings up an aspect of the UI system that annoys me.

I know the federal government allows any state to have what's known as an SEA (Self Employment Assistance) program .. the problem is that I only know of possibly six states that have such a program. I believe most of these states use a profiling system which invites participants into the program or one can apply .. which would of course allow UI benefits while getting the business on it's feet.

So I searched. "Does California EDD have a SEA program".

Here's the page that was returned.

Doesn't look that promising, but I'll leave it to you to explore all the information for possible solutions.

I think you should give CalJobs or a Workforce center a call.

Quite frankly, I do not understand why this type of program isn't more widely used since the problem right now seems to be job elimination outpacing job creation.

I think that extra $25 bucks a week everyone is getting could have been put to better more effective use for the long term.

Additionally, depending on the kind of business one is hoping to start. It's worth a peek at the grants and loan programs offered by the federal government. GovBenefits.gov

Sorry I couldn't be more helpful, but your right to collect the unemployment benefits to which you are entitled for a lay off are totally dependent as a general rule on your ability and availability to accept another job.

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