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Redundancy

Redundancy

Managing Your Redundancy

If you are leaving your employer due to redundancy, this means a major change in your circumstances. And that change can bring about a number of challenges and indeed – emotions.

As such, one of your greatest challenges will be the management of your new financial position.

In recognition of this, we have put together this guide to help you through the transition process.

Whether you are being made redundant within the private sector or government, many of the same “rules” per se will apply. However, there are some unique factors relevant to public sector redundancies. More details on these further on.

In any event, these initial three steps should be taken by you:

  1. Read about the payments you might receive from your employer, including the tax implications;
  2. Consider the financial issues likely relevant to your age and your work/retirement goals thereafter;
  3. Speak to a financial adviser to learn how to better manage your redundancy payments.

One of our providers has created a relevant e-book on the topic which you can read/refer to here. Nevertheless, we have produced a summary of that information for you. Please read on…..

The types of payments you may receive in the event of genuine redundancy include:

  • A genuine redundancy payment;
  • An early termination payment (ETP);
  • Other termination payments such as unused annual leave and long service leave.

Genuine redundancy payments are tax-free to a limit, based on your full years of service with your employer. The amount exceeding the tax-free limit is classified as an ETP.

Financial Issues to Consider if You Plan to Continue Working

How will you meet your living expenses?

NOTE: If you meet certain conditions, you may be eligible to receive the JobSeeker Payment. Also, there is another possible option in the form of a TTR (Transition to Retirement) Pension. Your financial adviser can help you with this – to gain a better understanding of it and whether or not it’s a viable option for you..

Where can you put your employer’s payments?

There are a number of options open to you. Once again, however, this is an appropriate subject to discuss with your financial adviser before deciding.

What is the JobSeeker Payment?

JobSeeker Payment is a social security payment available to eligible job seekers who are in genuine need of government assistance to help meet their basic living expenses. Please refer to Services Australia JobSeeker page for more detailed information.

Targeted Separation Package Or Rejuvenation Package

S.A. Government  employees may qualify for a TVSP (Targeted Voluntary Separation Package).

The S.A. Government’s Rejuvenation Package was announced in the 2021/22 Budget.

If you have an entitlement to any form of redundancy payment, including a TVSP or Rejuvenation Package, you should consult with your financial adviser. Since there are different taxation implications for each form of redundancy payment, your adviser’s input on your financial options could prove invaluable.

Consequently, it is vital that you make a well-informed decision before committing to anything.