Tips for coping with redundancy

If you have lost your job or are worried about being made redundant, there are steps you can take to ease the financial pressure.

Lost your job?

Review your budget
Take a close look at your budget to see how your household can cope with reduced income. If you have a savings fund or a redundancy payment, work out how long that will last.

Use Sorted’s Budget calculator or if you need personal help, contact the NZ Federation of Family Budgeting Services. You can call them free on 0508 283 438, or look in the White Pages under “Budget Advice Services” to find your local office. 

Seek government help
As well as the unemployment benefit, you may be entitled to special redundancy help from the government’s new ReStart package. Contact Work and Income or visit their website for more information.  There’s also helpful information about dealing with redundancy on the Careers Services website.

If you have received a redundancy payment, you may be entitled to a redundancy tax credit from Inland Revenue. 

Talk to your lender
Talk to your lender right away if you think you will have trouble meeting debt or mortgage repayments. They will have options they can talk through with you.

Worried about losing your job?

Save for an emergency fund
As a rule of thumb, you should aim to have 2-3 month’s income as a “cash cushion” you can call on if the worst happens. But anything is a start. If you have high interest debt, you might prefer to pay that off before you start saving.  

Make a budget
Do a budget to see what you’re spending your money on and where you can make changes to free up some money for saving or reducing debt. Use Sorted’s Budget calculator or get help from a trained budget adviser.  

Check your insurance
If you have repayment insurance as part of a personal loan or hire purchase agreement it may cover payments if you are made redundant. Check the policy document for details.

If you have mortgage repayment insurance you may be able to extend it to cover your payments over a period of redundancy. Ask your lender if this option is available, what it would cover, and how much it would cost.  

Know your rights
Check your employment contract to see if you would be entitled to a redundancy payment and how much that would be.  You can find out more about your rights on the Department of Labour website.

Published 7 May 2009