Coping with Redundancy

New Zealanders are learning the hard way how to cope with redundancy. It seems that every week another factory is closing down, another business disappears, and workers are left to manage as best they can.

“There’s no good time to be made redundant,” says Raewyn Fox, the CEO of the New Zealand Federation of Family Budgeting Services. “No one really wants to think about the reality of life after redundancy, but we’re finding more and more New Zealanders are thrust into this situation and are just doing what they can to cope.”

“There are a few things you can do to try to minimise the financial impact of sudden change,” Fox says. “Until you have a stable way to replace your lost income, these are stop-gap measures, but they might be helpful.

Examine your finances

First up, Fox suggests taking a good look at your finances so you know where you stand. “Take the time to do a comprehensive budget. It will clarify your financial situation and can identify any pressure points,” Fox says. “We have some free tools on our website to allow you to do this.”

Take immediate action

“If you can talk to your creditors immediately, before you fall behind, they’re more likely to be accommodating,” Fox suggests. “If you’re upfront and say ‘look, this is what’s happened, can we work something out until I find new employment?’ most creditors will be understanding”.

You will also have the opportunity to immediately cut back on expenses. “For a short time, you may need to be careful about how much you’re spending on food, petrol, electricity. These bills will probably seem manageable in the short term but you don’t know how long you’ll be without work, and everything adds up eventually,” Fox says.

Check your policies

“I recently talked with a group being made redundant,” Fox says. “We talked about the redundancy insurance they may have, and that many credit contracts included redundancy insurance. Many of them hadn’t even thought to check if they were covered for redundancy, and it came as a very pleasant surprise in the middle of an unpleasant experience.”

It could be that you have a credit contract with a clause covering you in case of redundancy. It will cost you nothing to check.

Check your entitlements

You might qualify for an accommodation supplement through Work and Income, or a Working for Families tax credit through Inland Revenue.

“This is another instance where it doesn’t hurt to find out more. If you qualify for an entitlement, you can use that money to help you get by. If you don’t qualify, you haven’t lost anything except a few minutes of time,” Fox says.

Get advice

“Redundancy is an extremely stressful time. It helps to have someone on your side, who can help you with your financial situation until you find more work,” Fox suggests. “A budget adviser can do exactly this. Budgeting advice is offered free through the New Zealand Federation of Family Budgeting Services, with over 160 locations throughout the country.”

Anyone can visit a budget adviser. You can find your nearest budgeting service by visiting www.familybudgeting.org.nz or calling 0508 BUDGETLINE (283 438).

ENDS

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