With Kiwis' fears of losing their jobs growing, it's time to crunch the numbers
One in five New Zealanders fears being made redundant. If the axe falls, and you don't have savings or a redundancy payment, rent, mortgage payments, food and utilities bills will be very onerous.
It's very easy to get despondent or into debt quickly following a redundancy - especially if you're in denial. There is, however, a wide variety of assistance available to get you back on your feet and into work.
The first thing to do is to get advice from: outplacement programmes, your company's human resources department or workplace counsellor, Work and Income New Zealand (Winz) offices and helplines, the Government's Careers Services, and budget advisers.
Raewyn Fox, chief executive of the New Zealand Federation of Family Budgeting Services, says people who have never applied for benefits in the past may be unaware of the assistance they can get.
In many cases there are state benefits you can apply for - and the sooner you do that the better. Even if you think you'll be re-employed quickly, it's worth applying just in case. The most likely benefits to apply for include the Unemployment Benefit and Domestic Purposes Benefit.
Surprisingly, if you want to apply for these benefits it doesn't matter how much you own in assets such as property, shares, KiwiSaver, and bank deposits. It's only the income on the assets that matters.
Many middle-income earners who lose their jobs often fail to apply for the Working for Families package, says Fox. It offers tax credits, an accommodation supplement and a childcare subsidy for up to 50 hours a week when you're working or studying.
Looking for work costs money. Everything from new clothing, printing and faxing charges, public transport or petrol costs and sometimes specialist advice from career coaches and other professionals.
Mike Smith, acting deputy chief executive at Winz, says his department offers Transition to Work Grants to pay for some of the costs of looking for work and attending interviews.
For those who find themselves in need of emergency payments Winz has a number of grants and payments - and you don't necessarily need to be on the benefit to qualify. The main ones are:
* One-off recoverable or non-recoverable "Special Needs Grants". You don't even need to be receiving a benefit to qualify.
* The Recoverable Assistance Programme for non-beneficiaries if you can show an immediate need for an essential item or service .
* Temporary Additional Support. This is a weekly payment to help with essential living costs.
As well as Winz, it's worth contacting the Inland Revenue Department (IRD), which can defer or write off tax owed if you're in serious hardship. You can also apply for a tax credit if a redundancy payment pushes you into a higher tax bracket.
If you have a KiwiSaver account it's also possible if you can prove financial hardship to withdraw everything except the $1000 government kick start, says Mary Holm, author of The Complete KiwiSaver. However, the downside of this is that funds withdrawn from KiwiSaver accounts will be treated as a cash asset and may affect supplementary benefits you wish to apply for.
Tertiary student numbers often rise during recessions and some people who are made redundant will take the opportunity to retrain or upskill.
If you do decide on the full-time training option you may be eligible for a student allowance and/or student loan, says Smith. Details can be found on Studylink.govt.nz.
It can be hard enough to feed and house yourself when you lose your income. But if you've got debts you can get into financial trouble awfully fast. Talk to your lenders before you default on payments, not after, says Fox. With mortgages, for example, you may be entitled to a payment holiday.
If you have a credit contract such as hire purchase or a car loan, the Credit Contracts and Consumer Finance Act allows you to apply to change your contract on the grounds of "unforeseen hardship". You may be able to, for example, extend the contract term, which reduces the monthly payments. It's also worth checking all of your credit contracts, mortgage and life insurance documentation in case you have redundancy insurance attached.
A local family budget service, which can be found by calling 0508 BUDGET, may also be able to negotiate with creditors on your behalf. The Familybudgeting.org.nz website recommends being creative about boosting your income in its Surviving the Recession - Redundancy Tips.
Being made redundant can be a very lonely experience. In many cases, employees are simply out in the cold once the redundancy axe has fallen. If, however, your company is offering an outplacement programme it's worth jumping at the chance.
Neisha Voot, director of outplacement specialist Niche Consulting, says employees who are made redundant are more likely to get a better job at higher pay if they go through an outplacement programme. On their own, people who are made redundant often act too quickly because of their fear of being unemployed.
Work and Income can also support people wanting to upskill. It offers Straight2Work, a pre-employment training programme, and the ReStart package which gives financial and job search assistance to people who have been made redundant, or are no longer self-employed due to the economic downturn.
Finally, if you think you've been treated unfairly by an employer or unjustifiably dismissed, you might have a claim against your former employer. A Community Law Centre, lawyer or the Employment Relations Service can offer advice.
