At pmwPlus, we understand that losing a job can be a difficult and stressful experience for anyone. However, it also presents an opportunity for you to take control of your financial situation and plan for the future. If you’re facing redundancy, it’s important that you understand the financial impact, your entitlements, and ways to maximise your redundancy payment. Let’s dive in and explore your options together!

So, what are redundancy payments?

Redundancy payments can be a welcome relief for employees who have lost their jobs due to business closures or downsizing. These payments are designed to help you transition financially until you find new employment. The amount of redundancy payments can vary depending on various factors such as length of service, age, local regulations and employer policies.

Redundancy payments usually contain several components, each with its tax treatment. These components may include a tax-free genuine redundancy payment up to a specific limit, taxable elements of redundancy payments exceeding the tax-free amount, and payments for unused annual and long service leave.

What are the tax implications?

When you receive a payout, it’s important to keep in mind that there may be tax implications involved. Some part of your payment might be tax-free, but the rest could be taxed as an Employment Termination Payment (ETP) or at special rates for unused leave. It’s vital to understand these differences so that you can make the most of your payout and avoid any unnecessary taxes.

How can you maximise your redundancy payments?

1. Financial Advice: We are here to provide you with all the necessary information and support during these challenging times. Our team of financial advisors can provide you with personalised strategies to help you optimise your benefits and payout structure. We can assist you in navigating tax implications, investment options, and social security entitlements.
2. Superannuation Contributions: We recommend that you consider contributing part of your redundancy payment to your superannuation fund. This strategy may offer tax benefits and enhance your retirement savings. However, it’s important to be mindful of contribution caps
3. Career Transition Support: Seeking guidance from career transition experts can be really helpful when re-entering the workforce! They can provide you with all the necessary tools and resources to make the transition smoother and more effective.

Social Security and Superannuation

It’s great to know about the social security benefits you’re entitled to, like the JobSeeker Payment and accessing your superannuation. To be eligible for these benefits, you may have to go through income and asset tests. On the other hand, you can access your superannuation when you reach certain conditions, such as when you’ve reached preservation age.

We know that redundancy can be a difficult and uncertain time. However, with careful planning and informed decision-making, it can also lead to new opportunities. By taking the time to understand your entitlements, tax implications, and strategic financial planning, you can navigate this challenging time with confidence and set the foundation for a secure financial future. pmwPlus is here to support you every step of the way.

General advice warning: The advice provided is general advice only. In preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, and objectives. You should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product.