As the economy slows, redundancy is becoming more common. That doesn’t stop it from being incredibly stressful, both financially and emotionally.
Assistance is available to help bridge the gap until you find another job. Follow the links below to find out more about:
Dealing with people/companies you owe money to
If redundancy means you will have difficulty making repayments on debt, it’s best to talk to the people you owe money to (your creditors) before you fall behind on your payments. You can often negotiate new terms to help you pay a more affordable amount over a longer period.
You may also be able to consolidate high interest debt into a new loan at a lower interest rate. Go to Debt consolidation to find out more.
ASB customers can call the ASB Financial Help Team on 0800 27 27 35. For more information go to Our Commitment to Customers in Financial Difficulty, or Managing your mortgage.
Apply for hardship relief on your debts
If you have a credit contract (eg a hire purchase agreement or personal loan agreement), you can apply to change your contract on the grounds of “unforseen hardship” - this includes loss of employment. You can apply to extend the contract term, and so reduce each payment amount, or to postpone payment dates, or both. However, your payments MUST be up to date; so make sure you consider this option BEFORE you fall behind on your payments.
Go to www.consumeraffairs.govt.nz for more information.
Check credit contracts for redundancy clauses
Some contracts for credit include redundancy insurance clauses. Carefully read the contracts that you signed when you took up the debt.
If you have lost your contract you have the right to request a copy from your credit provider and request a copy over the phone. Usually, there is not a charge for this.
For more information on this go to the Commerce Commission website or call BUDGETLINE to speak with a budget adviser on 0508 283 438.
Check your insurances for redundancy cover
Some life/disability insurance policies include redundancy cover. Check your policy.
Government assistance
Work and Income have created the ReStart Package for people who have been made redundant.
It is made up of three parts:
- ReCover – a payment if you have dependent children and are no longer entitled to an in-work tax credit.
- RePlace – an extra payment to help you with your accommodation costs if you’re already getting the maximum Accommodation Supplement.
- ReConnect – help finding you a job that’s right for you.
To get some or all of the ReStart assistance you must:
- have been made redundant from full-time work on or after 8 November 2008 or have been self employed and are now entitled to Unemployment Benefit
- have been working for at least six months immediately before you were made redundant – although you could have worked for more than one employer
- be looking for a full time job
- be a New Zealand citizen or permanent resident.
Redundancy means that your employer has decided the job you’re doing no longer exists, and you have not been redeployed to another role. It does not mean:
- being dismissed or fired
- completing a fixed term contract
- completing a seasonal contract.
For more information go to the Work and Income website or call the ReStart Line: 0800 559 000.
Apply for a Working for Families tax credit
If you have children you may be eligible for a Working for Families tax credit; if you currently already receive a tax credit then that credit will increase.
You can work out what your entitlements are on the IRD website: go to the IRD website for more information. You can use their online calculator, downloadable worksheet or call them on 0800 227 773.
Tax rebate on redundancy payouts
If you receive a redundancy payout, you may qualify for a tax rebate on the tax you pay on this. Find out more.
