As an employee there is a word none of us ideally wish to hear;
A “swear” word that sometimes brings with it:
- Concerns about the future.
- A lot of complexities on the financial front to contend with.
- An unknown “where do I go from here attitude” especially for those persons ceasing employment after a long time with a firm.
Redundancy can also bring with it a time of:
- A chance for a most wanted change.
- Opportunities for lifestyle changes.
- A move away from what may have been “unhappy” employment
- Do some things that I always wanted to do.
Obviously, there are a lot of financial issues and hence decisions revolving around:
- What are the taxation implications of my various payments?
- Should I remove some debt?
- What about that dream holiday?
- Is this a time to semi retire for me?
- Should I go into business for myself?
- What about my superannuation situation?
- Should I buy an investment property
- What are my Centrelink entitlements?
The government recognises some of the dramatic outcomes of redundancy for individuals and has considerable tax concessions in place for persons made redundant.
Apart from those persons electing to retire then the reassessment of my future working life and will this be vastly different to what I have done, is at the forefront of decisions to be made.
The considerations of where to now can easily be centred on the financial matters rather than personal lifestyle changes. For this reason, we are strong believers in individuals not rushing in to decisions and to explore the full range of lifestyle and financial alternatives and seek appropriate advice and guidance.
On the non- financial front for those persons wishing to continue to work there is a good old saying:
“MY NEW FULL TIME JOB IS TO INITIALLY LOOK FOR A NEW JOB”
This can be quite daunting for persons who have not had to attend job interviews and the like for some time.
On the financial side of things essentially most redundancies come with:
- A tax-free redundancy amount depending on years of service and company policy/awards.
- A taxable redundancy amount generally applicable to higher income earners.
- Concessionally taxed annual leave and/or long service leave.
- Possible access to superannuation particularly for older persons nearing retirement.
If you are fortunate to have been advised of your pending redundancy well in advance of the actual date of leaving the firm there are also various strategies to assist with planning ahead for taxation impacts, liquidity, lifestyle continuation whilst seeking new employment, improved Centrelink entitlements etc.
Moreover, we always urge individuals to explore all their options whether that be type of future work/employment, financial decisions and lifestyle changes.
At Plus 1 Group, we are available to assist individuals facing redundancy with a view to lessening some of the concerns at invariably difficult and uncertain times for individuals and their families.