Menu
Business

Seek advice on retrenchment

MANY are facing retrenchment or redundancy as firms cut costs in a bid to stay afloat. 

It can be an emotional time for anybody who is faced with losing their job, but it's also a time when expert advice is vital. 

Changes have been introduced since July 1, 2007 where only those who satisfy the "transitional rules" are allowed to transfer or direct part of their redundancy payment into superannuation to save tax.  

Also, Centrelink defers payment of benefits for a time because the termination payment is regarded as a resource to keep you going till you get a new job.

Sarah, aged 50, has been employed for 15 years and six months. She has recently received a bona fide redundancy payment of $160,000 and qualifies for the transitional rule treatment. Sarah will be required to take the tax-free component of her redundancy payment ($71,705) as cash but may elect to roll over the remaining amount of $88,295 to superannuation.

Should she choose this strategy instead of cashing it in she will save just over $14,568 in tax.

An additional benefit of this strategy is the amount transferred into super will not be taken into consideration by Centrelink when determining the numbers of weeks Sarah will have to wait to claim unemployment payment.

A major decision for many older workers will be to retire or look for a new job, but in all cases try to keep your situation as flexible as possible. For example, don't repay more than three month's payments off your loans, because your age space if you suffer a financial setback such as difficulty in finding new employment.

Noel Whittaker is a director of Whittaker Macnaught Pty Ltd. His advice is general in nature and readers should seek their own professional advice before making any financial decisions. His email is noel.whittaker@whittakermacnaught.com.au.
 



Raising money for the roof at Lawrence

DONOR PLEA: Vice-president of Lawrence Museum, Roz Jones, looks up from the mezzanine level of the new building, which needs a roof .

Museum needs help to finish building

Investor interest in $1.175m Iluka property

HIGH END: The two near new flats, a part of the property for sale at 80 Charles St, Iluka.

80 Charles St boasts potential for growth

Valla search unable to find missing swimmer

An aerial view of Valla Beach.

Hopes of finding swimmer who went missing at Valla Beach are fading.

Local Partners