How can ipac help me manage my career transition?
We’ll help you understand all your options and make the right choices on issues including:
~ money for the short term
~ using your retrenchment payment most effectively
~ what to do with your super
~ how to manage employer benefits like insurance, employee share schemes, car leases and regular bill payments
~ Centrelink benefits you may be entitled to (including waiting periods)
~ your overall tax position.
Some of these decisions must be made quickly, and working with ipac can reduce the stress and help make sure you don’t miss important opportunities.

What payments will I receive if I am retrenched?
The payments, and size of them, can vary. But if you are a full-time employee and receive a bona fide redundancy payment, there are four key elements:
~ unused annual leave
~ unused long service leave
~ tax-free portion of retrenchment payment
~ taxable portion of retrenchment payment.

How much of my payment is tax-free?
It depends on the size of your payment but for the 2004/2005 financial year, the first $6194 plus $3097 for each year of service is tax-free. For example if your payment is $20,000 and you have been with your employer for two years, your tax-free component would be $12,388 ($6194 + $3097 + $3097).

What does “roll over” mean?
Roll over simply means moving money within the tax-effective superannuation environment. For example, you may choose to ”roll over” your super into another fund when you leave your employer.

Am I able to roll over the taxable part of my retrenchment payment into my super?
No, unless you are entitled to transitional rules.

A financial adviser can help you determine this.

Can I “cash out” my super if I’m retrenched?
Generally, you can’t cash out your super until you retire. Even then it is often more tax-effective to maintain money in the superannuation environment by setting up an income stream like an Allocated Pension. There may, however, be a portion of your super that can be cashed out. This is called the “unrestricted non-preserved” portion. Before cashing this out, it is important to consider your age, your need for money now and the tax consequences.

What Centrelink payments may I receive?
Centrelink offers a Newstart allowance that is subject to assets and income tests. Plus there are waiting periods. If you are eligible, your waiting period depends on:
~ the amount of your liquid assets such as cash, term deposits, shares and managed funds;
~ the size of payment for annual leave and long service leave from your employer.
The rules are complex and it is important to seek professional advice if you are unsure how they apply to you.

How can I manage my cashflow until I find work again?
The key to managing your cashflow is to preserve flexibility because you don’t know exactly what the future will bring. This is not the time to take big risks or make hasty decisions. Some of our clients have found it makes sense to “pay themselves” while in transition. This involves putting cash, either from the tax-free part of their retrenchment payment or other sources, into a cash account. They can then draw down a regular income until they get back to work.

Make an enquiry or see an adviser now, or call us on 1800 626 881.