Support for members facing job redundancy
If your role has been made redundant or you’re facing redundancy, you’ll have some important financial and lifestyle decisions to make. The loss of your regular income can obviously be quite a stressful time for yourself and any financial dependents. Your superannuation is one thing we don’t want you to worry about. Our aim is to ensure our members have confidence and a clear path forward with their super following redundancy.
If your role is made redundant, you could be eligible to receive a financial redundancy payment which is usually based on your salary at the time and how long you’ve worked for the employer.
You may receive different types of payouts on leaving employment including ‘Employment Termination Payments’ and things like unused annual leave or long service leave, which have different tax implications.
There’s also the question of what to do with any redundancy payment. Without knowing how long it may take to find another job, consider whether or not it makes sense to use your redundancy payment to pay off debts (particularly those with higher interest) like your home loan, personal loans or credit cards.
Contact Centrelink as soon as possible to find out what government allowances might be available to you, noting that there can be waiting period before payments start. Call Centrelink on 13 28 50 or visit your nearest Centrelink office to get started.
You may be eligible for the following:
- JobSeeker (formerly known as Newstart): financial help while you’re looking for a new job or undertaking training or other activities to help you find a job.
- Health Care card: provides access to cheaper health care services and medicines - and is available if you qualify for JobSeeker or some other Centrelink payments.
- Age Pension: Government payments available for those who have reached Centrelink Age Pension age and meet other eligibility criteria.
Your Russell Investments super account is designed to go with you, when you change jobs and even into retirement, so you’ll only ever need one superannuation account.
Our Redundancy and Your Super fact sheet details what will happen to your super account, depending on which division you are in. Generally speaking, your account will either stay the same (including your insurance cover) or you’ll be transferred to another division. You’ll just need to provide our Choosing Russell Investments form to your next employer, and in the meantime maintain a minimum account balance of $6,000.
Other actions to consider taking include:
- Combine your super – apart from making it easier to track and manage, having all your super in one place means you’ll save on paying multiple sets of account fees.
- Pause any personal contributions – if you’ve been making after-tax contributions to boost your super savings, consider using that money instead to meet your other financial needs until you start working again.
- Review your insurance cover – while your insurance cover will generally continue for 16 months if you don’t receive or make a contribution, you will also continue having premiums deducted from your account. It may be worth reviewing the level of cover you need in your current circumstances. Keep in mind that if you cancel or change your insurance now, you may need to reapply later, including providing medical and health information for the Insurer.
- Get advice – we can put you in touch with expert advice related to your super over the phone at no cost. For more detailed advice on your full financial picture, we’ve got the answer to that too, and if you’re ready to plan for retirement, our Retire Ready consultant can talk you through your retirement income options. Just call 1800 555 667 to get started.
Super is designed as a long-term investment to help you fund the lifestyle you want in retirement, so you generally have to wait until you retire or reach your ‘preservation age’ before you can access it.
There are a few exceptions for members who qualify under other circumstances, including some temporary changes the government has made in response to the COVID-19 crisis:
- Early access to super - COVID-19 response: click here for details of your options and how to apply for access to up to $10,000 of your super savings for the 2020-21 financial year.
- Severe financial hardship and compassionate grounds: if you’re unable to meet immediate living expenses for you and your dependents, including medical expenses, you may be able to access some or all of your super before your preservation age.
- Terminal illness or permanent incapacity: if you are diagnosed with a terminal illness or have physical or mental health issues that are likely to stop you from working again, you may be able to claim some or all of your super.
- Permanently leaving Australia: for temporary residents who have earned super while working and living in Australia – you can apply to have your super paid as a Departing Australia Superannuation Payment.
Given the potential longer-term impacts to your retirement savings, you should consider the other types of financial assistance available before accessing your super.
For further details about these early access options, call us on 1800 555 667.