at Knowledgebank IQ | 04 April 2014 |

Redundancy

Redundancy is a shock to more than just your finances. It presents you with many challenges and money is just one of them.

Following such an event each individual’s priorities will be different. Whether it’s looking for another job, starting a new career, or deciding to retire early, you’ll have many decisions to make.

Regardless of which way you decide to go, it is important that you understand the types of payments you could receive from your employer.
 

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


Genuine redundancy payments

Genuine redundancy payments are tax-free up to a limit based on your full years of service with the employer. Any amounts exceeding the tax-free limit are classified as an Employer Termination Payment (ETP).
 

Employer termination payments (ETP)

An ETP is a lump sum payment you may receive when your employment arrangement has come to an end as a result of a redundancy which exceeds the tax-free limit.,br />
The ETP payment received as a result of a genuine redundancy is concessionally taxed based on your age.
 

Financial considerations if you plan on getting a new job

  • How will you meet expenses?

  • Where can you put your employer’s payments?

  • What is the Newstart allowance?

  • Will you need to move to another super fund?

  • Do you have any insurances connected with your job?

  • Do you have any personal insurance policies?

  • What issues should you consider when you find a new job?

  • What is a Transition to Retirement pension?
     

Financial considerations if you plan on retiring

  • Do you have any debts?

  • What are you going to do with your super?

  • What are the benefits of starting a superannuation pension?

  • Are you eligible for the Age pension?
     

How can a financial planner help you?

We aim to help you address these questions and assist you:

  • Decide what to do with the payments you are eligible to receive from your employer.

  • Make the most of your super, so you will be financial secure in retirement.

  • Ensure you and your family are adequately protected through having appropriate insurance policies in place.

  • Determine whether you are eligible for any Government income support payments.
     

We can also assist you in:

  • Improving your cash flow

  • Growing your investment

  • Managing your debt

  • Ensuring that your estate is distributed according to your wishes.

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