12 February, 2019 / IN Redundancy / by Kurt Purkiss
Are you facing redundancy - or considering taking it? It’s a huge decision that has a big bearing on your future. This redundancy advice will help you decide…
Redundancy advice is an important consideration. Redundancy is becoming part and parcel of modern workplaces and it can happen at any age – both forced and voluntary.
It is often caused by a restructure, industry disruption or technological advancement, my experience is that everyone’s redundancy is slightly different.
So getting the right redundancy advice before you decide or after it happens to you is crucial.
Redundancy: Opportunity or threat?
Depending upon your stage of life, retirement plans and job satisfaction, redundancy can be a wonderful opportunity for change or a cause of fear and trepidation.
Regardless of your next career choice, it’s important to fully understand what payments you may receive and what potential tax implications may apply. This will help you make decisions that will put you and your loved ones in the best possible position.
A redundancy payment often consists of a “genuine redundancy payment”. This is is tax-free up to a limit, based on the years of service with your employer.
Then there is an Employment Termination Payment (ETP). This is a lump sum payment, usually known as a payment in lieu of notice or a “golden handshake”.
You will also receive any other employee entitlements which can include accrued annual leave, accrued long service leave and your final pay.
Each of these payments is paid as cash, less any applicable taxes. A list of these taxes can be found in a table at the end of this article.
Redundancy advice: The main financial questions you should ask…
When retirement is not an option the four financial issues to consider are:
- How will I pay the bills and keep putting food on the table until I find another job?
- Do I need to move my superannuation to another fund?
- How will I meet my home loan repayments?
- What should I do with any “left over” redundancy pay when I find another job?
Get the right redundancy advice at this crucial turning point
Are you unsure if you’re financially able to retire or do you want to consider what your options are?
The advice of a qualified professional can help you decide. They can also advise on the best way to manage the payments you receive and provide guidance to make the most of your redundancy.
Seek guidance on a range of topics relating to redundancy, including:
- How to improve your cashflow
- How to manage your investments
- Reviewing your debt
- Considering your estate planning needs
Redundancy can often bring with it feelings of fear, sadness and loss. Speaking with a professional may alleviate the stress related to the financial uncertainties of your situation.