Redundancy will affect many of us in our working lives. During this stressful time, there are important decisions to make, which can affect your life for years to come.
For a start, there are major tax implications in how you take the different parts of the package. You could easily end up paying much more tax than you need to.
Some parts are tax free if taken as cash, up to a limit. For example, if you have been working in a company for fifteen years you can take nearly $50,000 of your “bona fide redundancy” payout in cash, tax-free. The remainder can also be cashed out, but it is frequently more tax-effective to roll it over into a superannuation fund.
Centrelink benefits, such as the Newstart Allowance, may also be delayed or reduced depending on how you take your payout.
If you are facing redundancy, make sure your payout is used wisely to meet your present and future needs. Call to arrange a free, no-obligation meeting with our Financial Planner.