Section 17 - Self-Employment Income
17.1.1 Authority to Enroll Business Persons without Equity
Where an EIA applicant maintains his or her own business and does not have associated equity, the decision to assist does not require Ministerial approval. However, the applicant should be directed to a more remunerative type of earning situation.
17.1.2 Authority to Enroll Business Persons with Equity
Only in the most exceptional circumstances would assistance be granted to a person who operates his or her own business and maintains possession of any business equity (e.g., business premises, equipment and stock).
Where justification seems to exist for granting assistance to such an applicant, full details and a recommendation should be submitted to the Minister or the Minister's designate for consideration and/or approval under section 5(2) of the Regulation. The recommendation should suggest an appropriate time limit on enrolment.
Exclusion of inventory and equipment essential to a business operation from calculations of resources available to the applicant or participant as provided for in section 8(1)(a)(iii) of the Regulation shall be exercised only as part of such special case review.
17.1.3 Net Business Income
To calculate net business income available for earning exemption and current maintenance, the following should be used:
- Business Formula — where gross income from a business operation is under $5,000.00 per year
20% of the first $1,000.00 gross annual income PLUS
30% of the second $1,000.00 gross annual income PLUS
40% of the third $1,000.00 gross annual income PLUS
100% of the gross annual income over $3,000.00 - Gross Income Minus Costs - where gross income from a business operation is $5,000.00 per year or more.
Include actual, essential costs associated with operating the business.
Where net business income is a minus figure, assistance shall not be granted to cover any part of the deficit.
17.1.4 (deleted)
17.1.5 Participants in Approved Self-Employment Programs
Policies
Approved Self Employment Program (PDF 73 KB)
Non Enhanced Self Employment (PDF 325 KB)
Forms
Enhanced Self Employment - Monthly Income and Cash Flow Statement and Balance Sheet (PDF 66 KB)
Employee or Self Employed? (PDF 413 KB)
Exemptions
Where a participant or a participant's spouse is engaged in an approved self-employment program, all income derived from the operation shall be exempted from consideration as a financial resource for a period of up to 44 consecutive weeks, provided that all of the income not allocated for the payment of business expenses is reinvested in the business operation. A self-employment program may be approved by the Minister or any person authorized by the Minister, under section 8(8) of the Regulation.
The period of exemption may be extended for up to eight additional weeks, as per section 8(9), if approved by the Minister or any person authorized by the Minister. The exemption may only be extended once regardless of the length or number of times enrolled as per section 8(10).
Approved Self-Employment Programs
A participant who indicates that he or she has a plan for self-employment may be referred to an approved self-employment program. Each approved self-employment program will determine which participants it will accept. Participants cannot participate in the enhanced exemptions unless they are participating in an approved employment program.
Prior to EIA approving the participant for participation in a program, a review of the participant's business plan must be conducted. Approval for the participant to participate in a self-employment program and receive the enhanced exemptions will be contingent upon the business plan having a reasonable expectation of resulting in the participant becoming independent of assistance.
Reporting Self-Employment Income
Participants will complete a "Statement of Financial Position" and an "Income Statement" each month. The statement will be completed by the 20th of the month following the reporting period in order to allow participants sufficient time to accurately report their financial information.
Exempted Expenses
Revenue Canada standards will be applied in determining which business-related expenses will be exempted from consideration as income.
See also Revenue Canada Standards and section 17.1.3 for the policies regarding the determination of net business income.
Participants in self-employment programs who are not independent once the time limit has elapsed
Once the approved time limit has elapsed, it is anticipated that the participant will be independent of EIA. However, if the participant is not, the regular work incentive exemptions as per sections 8(4) to 8(6) of the Regulation will apply.
The amount of equity in the business which will remain exempt will be determined by the Minister or the Minister's designate. Exclusion of inventory and equipment essential to a business operation from calculations of resources available to the participant, as provided for in section 8(1)(a)(iii) of the Regulation, will only be exercised as part of a special case review.
17.2.1 Maximum Net Farm Assets Allowable
All applications received from persons owning or operating farms must be screened according to a maximum allowable net farm assets level of $20,000.00 which is to be calculated as follows:
- A complete inventory of all property owned, such as equipment, livestock and saleable produce must be taken.
- Values are to be ascribed to all farm assets on the basis of:
- Fair market value for property, such as livestock and saleable produce.
- Book value for equipment and machinery as per "Capital Cost Allowance Schedule for Farmers and Fishermen" (which is the purchase price minus depreciation as determined for income tax purposes.
- Exclude from the assessed inventory allowable home property (see section 14.1.2), allowable personal property (see section 14.2.1), and allowable liquid assets (see section 14.3.2).
- Total the remaining asset values to establish gross farm assets of the applicant.
- Deduct from the gross farm assets figure all related liabilities such as outstanding mortgages and bank loans to establish the net farm asset level.
- On the basis of excess assets, the application is to be denied if the net farm asset figure thus calculated exceeds $20,000.00.
NOTE: Provisions for exemption of inventory and equipment essential to carry on a viable farming operation as listed in section 8(1)(a)(iii) of the Regulation are to be exercised within (not in addition to) the $20,000.00 net farm asset allowance.
17.2.2 Authority to Enroll
Within the allowable net farm asset level of $20,000.00, the EIA District Director may authorize assistance to farm applicants for a period of up to four months, pending disposal of assets.
Approval must be obtained from the Minister's designate for assistance to such applicants for any specified period beyond the four months provided for in section 4(3) of the Regulation.
17.2.3 Testing Eligibility - Farmers
EIA eligibility for farm applicants is to be established based on estimates of probable income for the coming year. Farm applicants should also be asked if they know about the various federal and provincial income insurance and support programs available to them, and if they have insurance or accounts with such programs from which they may draw.
Monthly income statements must be submitted, and estimated farm income is to be reconciled every six months, or more frequently, if indicated.
17.2.4 Gross Farm Income
Gross income from a farming operation shall include all proceeds from the sale of items such as livestock, produce, equipment and the rental or other return on land.
Calculations of gross farm income should also include the fair market value of produce consumed by the EIA family.
17.2.5 Net Farm Income - Formula or Costs
To calculate net farm income available for current maintenance and earning exemptions, use:
- Farm Income Formula - where gross farm income is under $5,000.00 per year, take
20% of the first $1,000.00 gross annual income PLUS
30% of the second $1,000.00 gross annual income PLUS
40% of the third $1,000.00 gross annual income PLUS
100% of the gross annual income on excess of $3,000.00; - Gross Income Minus Costs - where gross farm income is $5,000.00 per year or more, costs include any or all of the following:
- essential operating costs as approved by the District Director
- taxes on excess farm property
- mortgage payments on excess farm property
- board and room costs for ineligible children living at home to assist with farm operations
Where net farm income is a minus figure, EIA shall not be granted to cover any portion of the deficit.
17.2.6 Earnings Exemptions for Farmers
Earned income exemptions for applicants and participants under a provision of the Act are outlined in clause 8(4) of the Regulations. These exemptions were effective January 1, 2008.
Please note that gross farm income has been defined (see section 17.2.4) to include some forms of unearned income which are not subject to earning exemptions.
17.2.7 Refundibility of Assistance to Farmers
Where farmers own excess property, they may be granted assistance for up to four months to allow the excess property to be converted to cash under section 4.2 of the Regulation. Assistance granted in these circumstances is not recoverable.
17.3.1 Allowable Exemptions and Expenses for Family Child Care Providers
Family Child Care Providers licensed under Manitoba Early Learning and Child Care (formerly the MCCP) are eligible to receive special earning exemptions and to claim work-related expenses in the determination of their assistance payable. The following policies apply:
Eligibility
Child Care Coordinators or the Central Child Care office should be contacted to confirm whether an individual is licensed by Manitoba Early Learning and Child Care (MELCC).
Exemptions
- Providers of family child care are eligible for an earning exemption of 30% per section 8(1)(b)(xiii) of the Regulation.
- Operating grants and start-up grants issued to licensed providers by Manitoba Early Learning and Child Care are to be exempted from all calculations of available resources per section 8(1)(b)(iv) of the Regulation.
Allowable Work Expenses
- basic telephone rental
- daily expenses for food, health and program calculated at 25% of gross income.
Verification of Income
Participants must submit an Income Declaration Statement accompanied by:
- a copy of the Child Care program's Notice of Payment and/or cheque stub from the subsidy cheque. This specifies the subsidy paid directly to the provider by the government on behalf of eligible families; and/or,
- a copy of receipts given by the individual to parents. This represents fees paid directly to the provider by non-subsidized or partially subsidized families.