— with financial expert Adrian Raftery

One consequence of a slowing economy is that more people are likely to be made redundant. It's a stressful event, but if it happens to you, there are ways you can reduce its impact.

Your legal rights
Employers must follow strict guidelines when dismissing an employee due to redundancy. If you feel you've been unlawfully dismissed, for example, due to your sex, race or sexual preference, the Australian Industrial Relations Commission can intervene. Claims must be lodged within 21 days of receiving notice.

Get the tax right
Redundancy payments provide many people with a welcome lump sum, and bona fide payments receive special tax treatment. The tax-free limit is currently $7350 plus a further $3676 for each completed year of service. Anything in excess is treated as an "employment termination payment" (ETP). The first $145,000 of an ETP is taxed at 16.5% if you're over 55, or 31.5% if under 55. Anything over that is taxed at 46.5%.

Spend wisely
As a redundancy payment may be the last pay cheque you receive for some time, it's important to make sure it's put to good use. When money is tight, it's time to reassess the difference between needs and wants. Budgeting can be a chore, so why not approach it as a game? Get the family involved, and you'll be surprised where you can find savings. Don't treat your situation as all doom and gloom. Decide now how the family will celebrate when things get back to normal.

Manage debt
Talking to your lenders from the start will give them the greatest opportunity to help you. Good financial advice is crucial at this time, so get in touch with your adviser or bank manager as soon as possible.

Retrain
Many companies provide employees with outplacement assistance to help them find a new job. Make the most of any offers. This is a chance to review your career path, try a new direction or start your own business.

Get support
Redundancy results from events beyond individual control, but it's still easy to feel a sense of personal rejection. In addition to support from your family, it's important to seek help to deal with the emotional upheaval that can occur at this time. Stressful as redundancy is, it can be a great opportunity. Many people emerge from the redundancy experience with fresh motivation, happily embracing a new career.

Where to get help

My Future — explore career and study options
Centrelink — training and education information
Job Guide — jobs and training pathways
Australian Industrial Relations Commission 1300 799 675 — for reviews of your rights at work and unfair dismissal claims
Relationships Australia 1300 364 277 — support if employment issues are affecting your relationship
Lifeline Australia 13 11 14 — 24-hour phone counselling in times of crisis has a free career centre with practical information and tools to help

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