Self-employed and on Jobseeker Support: income, abatement and irregular pay

How earnings reduce your benefit

Situation	Free zone / rule
Single, no children	Up to $160 a week before tax doesn't affect your payment. Above that, your payment drops by 70 cents for every extra $1
Sole parent	Up to $160 a week before tax (possibly $180 with childcare costs) doesn't affect your payment. Between $160 and $250 your payment drops by 30 cents per $1, then by 70 cents per $1 above $250
Couple	Partners share a $160 joint threshold, and each person's benefit reduces by 35 cents per $1 of combined income above it

Example: a single person, 25 or over, earns $300 gross in a week from casual work. $300 minus $160 is $140, times 0.7 is $98. The payment would be reduced by $98 (the tables are estimates). Single Jobseeker Support for 25 and over is $426.12 a week before tax, and it cuts out once income reaches $693 a week.

Other rules to know

If you're in part-time work, you must be looking for more work.
If your income is too high, your payment drops to $0 and then stops after 6 weeks at $0 (Work and Income).
Other payments such as Accommodation Supplement can be affected.
Tell Work and Income before you start. If you start trading and don't report income, you risk an overpayment and debt.

Handling irregular income

Work out your lowest-income month last year. Plan your budget around that, not your best month.
Pay yourself a fixed weekly 'wage' from a business account into your personal account. The rest stays in the business account to cover tax, GST, ACC and a buffer.
Keep 20 to 30% of each payment aside for tax and levies until an accountant tells you a better figure for your situation.
Build a buffer of 2 to 3 months of costs.
Invoice promptly, with clear payment terms. Follow up unpaid invoices at day 1 after the due date.
Keep a list of 'quiet-month' options: part-time work, a gig, or short contracts.

When you report income to Work and Income, report the week you earned it and keep records so you can show what you reported. If your income fluctuates widely, call them rather than leaving it. They can tell you how it will be treated, and in many cases it's better to report early.

If money gets tight

Urgent costs: see the help with urgent costs guide.
MoneyTalks 0800 345 123 for free budgeting and debt help.
Tell the IRD early if you can't pay a tax bill. They can arrange instalments (0800 227 773).

Sources

General information only. Confirm with the agency for your situation. Spotted something out of date? Email help@unemployed.nz.