With the right plan, redundancy is not all bad news

WITH the ongoing uncertainty in the global economy, many companies are being forced to cut costs, making redundancies more common.

So what's the best way to cope if you are made redundant and how can you keep on track with your financial goals?

Dealing with any financial obstacles early on will dramatically improve your situation down the track.

For many people, a redundancy can improve both their quality of life and financial situation.

But it's important to recognise that you need to have a plan.

Redundancy can often mean a significant payout.

This could be used to cover living expenses while you find a new job, help you set up a new business, or for some people - particularly those in their 50s or 60s - it could set you up for an early retirement.

Another important thing to consider is that redundancy packages are often more than just a severance payment and can include other benefits such as outplacement or counselling services and time off for job hunting.

If you're unsure what you are entitled to, check your employment contract.

Most awards and contracts set out employees' redundancy entitlements, so that's the first place you should look.

Unfortunately, some people, including workers under the Workplace Relations Act, may not be entitled to a redundancy package.

If you don't receive a package, it may be a good idea to talk to Centrelink about registering for Newstart Allowance while you look for future work.

Depending on your leave entitlements and liquid assets, you may not be eligible for benefits immediately, but knowing what you can expect later on will help you budget properly.

Centrelink can also assist with employment opportunities and training.

Of course there are other options you could explore, such as transitioning to retirement - maybe by working part time - and drawing some income from your super, but it all depends on your personal situation.

With the right planning, a redundancy could improve your quality of life and give you that extra push to sort out your finances and reassess both your financial and career goals.

Rick Rutten is an Authorised Representative of RI Advice Group P/L. This editorial is general advice only.

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