The economic waters are currently turbulent in Tasmania; the local and global economies are still uncertain and as we’ve seen lately, redundancy is a real prospect.
The steps taken, when being made redundant and paid entitlements, will decide if you find yourself coping well, or doing it even tougher in a very stressful time.
The first step is understanding what you’re entitled to and ensuring you receive it. This will be unpaid wages, unused annual and long service leave, and termination payments.
The spectre of tax also looms large over any payments and this is where it gets complex, with each individual situation differing from the next. The factors involved are: age, the size of payment received and length of service.
Some payments will be tax free, up to a limit, yet the payments may affect other entitlements, like family tax benefits.
Making sure you get professional advice before receiving a payment is important. Good advice will see you minimise tax paid and maximise access to other entitlements like Centrelink benefits.
The crucial part is when money arrives; often this is a time when people can go very wrong.
Most payments won’t be ignored by Centrelink, they will be considered income and you’re expected to live off the money until you serve a deferment period.
This is not the time to buy a new car or boat with the assumption another job is just around the corner. Basing your decisions around the worst case scenario is a prudent measure and leaves you in a stronger financial position if you find employment.
A new car or boat won’t feed the family in an extended period of unemployment, unless you’re planning a career change to a fisherman.
Take care with the financial decisions you make and the advice you take. It’s a good form of protection if your job prospects don’t improve.
Peter Mancell is a director of Mancell Financial Group and FYG Planners AFSL 224543. This information is general in nature and readers should seek professional advice specific to their circumstances. If you’d like help with your financial future, we might be Australia’s best financial advisor.
