EEA Nationals - 'Self-employment' definition
The notes on this page are for EEA nationals and their family members who were resident in the UK on 31 December 2020.
For EU right to reside purposes, a self-employed person means:
- Someone who works for themselves without being employed as a member of staff by another person or organisation, and
- Some who owns and runs their own company.
What is effective and genuine work?
Self-employment must be effective and genuine. Benefit officials operate a two-tier system to make their decisions about self-employed status more efficiently.
- Tier 1 – if an EEA national earns at least the amount that would require them to pay Class 1 NI contributions if they were an employee (£184 a week in 2021/22), and has been earning that amount for at least three months, benefits decision makers will automatically accept that the person has ‘self-employed’ status.
- Tier 2 – if an EEA national cannot demonstrate average earnings equal to or above the Class 1 NI threshold over a period of 3 months, the decision maker will need to make an individual decision regarding whether the EEA national’s activity is ‘genuine and effective’. It is not possible to provide a formula for this – each case is assessed on its own merit. Please see the help page on how genuine and effective work is assessed.
If a self-employed person’s business closes and they become unemployed, or if they take a maternity break or becomes ill after being in effective and genuine work, they will retain their right to reside as a self-employed person. See more information about having a retained status.
Claiming benefits as a self-employed person
A self-employed status satisfies the right to reside test for all benefits, and self-employed EEA nationals are not required to pass the factual habitual residence test. The same applies to the family members of self-employed EEA nationals when they are the benefit claimant or joint claimant.