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Job loss places a great financial burden on your family that must be addressed as soon as possible.
Here is our guide to money management after job loss.
Ensure that you were paid all that you earned
The first step after job loss is to check that you have received all entitlements from your employer. These entitlements may include a redundancy payout, back-pay or superannuation. The Australian Government lists a range of services that are available to help employees determine and claim their entitlements after job loss. Similar services are also offered by Unions Australia through their Rights Watch Blog or by phone on 1300 486 466.
If you are having difficulty receiving any unpaid wages, salary or payment relating to working conditions (like holiday pay) after job loss, contact the Fair Work Ombudsman or call 13 13 94.
If your employer has failed to pay your superannuation or is withholding tax or pay slips contact the Australian Taxation Office (ATO) or call 1800 199 010.
The Australian Government also provides protection for employees who have outstanding entitlements and lost their job as a direct result of their employer’s bankruptcy or liquidation. Depending on the date of the termination of your employment, you may be eligible for repayments under the Fair Entitlements Guarantee (FEG) or the General Employee Entitlements and Redundancy Scheme (GEERS). For more information, visit the Department of Education, Employment and Workplace Relations website or call 1300 135 040.
Make a budget after job loss
It is important to alter your spending habits immediately after job loss to take into account your new financial situation. You may need to cancel a holiday, cut back on luxury items like pay TV or takeaway food, catch public transport and research weekly specials before going grocery shopping. Although cutbacks can be difficult – especially when children are involved – you must keep the overall well-being of your family in mind.
The Australian Securities and Investment Commission (ASIC) and Pocketbook each offer a comprehensive Budget Planner that can assist you to manage your finances after job loss.
Do not take out a loan or overuse credit cards
Spending money that you don’t have by charging unnecessary items to a credit card will cause more harm than good. Similarly, do not take out a loan while unemployed – in your own name or your partner’s. After job loss, it is likely that the only companies that will give you a loan will be untrustworthy and charge high interest rates, digging you into a deeper financial hole. If it sounds too good to be true, it probably is.
Consult your lenders
If your budget after job loss indicates that you will have trouble paying your mortgage or your utilities bills, contact your lenders immediately to make alternative repayment arrangements. This is particularly crucial if the creditor has security over your home or car, since defaulting on repayments may entitle them to repossess that asset.
Most companies have a hardship officer in place who can help you to sort out an alternative payment agreement after job loss. For example, a hardship officer at your bank may postpone your loan repayments for a set period of time to allow you to get back on your feet. You can find more information about contacting and negotiating with hardship officers on here the ASIC website.
Seek financial assistance
Try not to panic if your budget indicates that it is impossible for you to make ends meet – there are many support services for people in your situation.
The Australian Government pays a Newstart Allowance to people who are unemployed and seeking work. You can also gain access to support services and training services through the Newstart program.
An emergency relief program is also run by the Commonwealth of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA). This program is conducted through community-based support or referral centres in Australia which can be located through St Vincent de Paul or the Salvation Army.
This emergency relief program provides a range of services, including:
- Rent and bill assistance
- Temporary accommodation
- Food, chemist or transport vouchers
- Free Clothing
- Budgeting assistance
- External program referrals
Remember that there is no shame in accessing these assistance services – you were paying taxes as an employee and are entitled to these benefits! Don’t let pride get in the way of what is best financially for you and your family.
