Change is something we can all find challenging. Being made redundant or deciding whether to take voluntary redundancy can be an emotional and difficult time.
A genuine or ‘bona fide’ redundancy payment is one that is received by an employee under 65 years, who is dismissed from employment because their position has become genuinely redundant.
There are generally two types of redundancy offers:
- involuntary, where you do not have a choice
- voluntary, where you may choose to accept your employer’s offer to leave the company.
If you have been offered redeployment or other job opportunities, and have not accepted them, you should check with your HR department to see if you will be paid a genuine redundancy as you may no longer be entitled to the payment. There can be taxation implications if this is not the case.
Need more information?
Redundancy can create a lot of financial pressure. In our experience, it’s normal to feel worried and uncertain. Speaking to a planner can answer many of your questions and help guide you to maintain a positive financial outlook as you go through a period of change.
A financial planner can assist you in:
- Developing strategies to manage and arrange your finances
- Assessing your options for your lump sum payment
- Understanding your redundancy entitlements
- Determining your eligibility for Centrelink support
A strategy doesn’t have to be complex. It can be as simple as preparing a budget, deciding how much money you need each week, and recommending investments that match your cash flow needs.
If your circumstances are more complex, a planner can show you how to arrange your affairs to maximise Centrelink entitlements, give you advice about insurance and investments, and if you are near your preservation age, transition to retirement options and starting an income stream.
Benefits of advice
Research shows that people who get financial advice (when compared with those who don’t):
- Feel more confident about meeting their retirement goals
- Have a better standard of living in retirement
- Make more personal super contributions
- Are less likely to depend on the Age Pension for their income
- Are significantly more confident in their ability to manage higher levels of investment risk.
A summary of the findings from the Australian Retirement Vision Survey, Rice Warner, August 2015