KEY POINTS:
Redundancy is never a desirable outcome, but a clear understanding of a person's finances can help alleviate the burden of losing a job, says a budgeting expert.
With a slowing economy and firms looking to cut costs, redundancies have already started and more are expected as the job market tightens.
Australian market economists forecast the jobless rate there to rise to between six to nine per cent over the next two years, from the present 4.4 per cent.
Director of financial services at Australian accounting and advisory firm Prosperity Advisers Gavin Fernando said people made redundant needed to first and foremost have the means to survive time out of work.
Fernando said clients should have a three- to six-month timeframe when looking at redundancy, their finances, job prospects and family considerations.
"They need to have sufficient cash or access to capital to get them through with their lifestyle - putting food on the table, to manage their debt and also education expenses," he said.
"Maybe for some re-education training themselves, or indeed for their children's education."
Fernando said the outlook was based on person's assets, what debts they had, their understanding of superannuation and what welfare benefits were available.
A review of a person's debt and costs was paramount, he said.
"Look at debts and see if there is an ability to reduce or have a holiday on repayments, or indeed access some capital from the mortgage for other things," he said.
Fernando said the major banks were quite amenable to borrowers with repayment holidays on their loans, particularly clients ahead with repayments.
"They (banks) would much rather work with a borrower than taking enforceable action," he said.
"If you kept your repayments at what you were paying at 9.5 per cent and rates are now at 6.5 per cent, you are at the head of the game."
If a client had cash in the bank, for example $20,000, ($24,064.49) when they were made redundant, Centrelink would assess that amount as a liquid asset, Fernando said.
"You have to serve a waiting period based on the amount of money you have in the bank," he said.
But if those funds were placed on a mortgage, that money would be available to be redrawn, depending on the lender, Fernando said.
"In the event of you being made redundant, you could still have access to that $20,000," he said.
"It won't be counted for Centrelink means testing when they assess you for what benefits might be available to you."
Other considerations retrenched workers had to consider were the tax implications of their redundancy packages and how much access they had to their superannuation, depending on their age.
Jobseekers would find 2009 difficult, Fernando added. "You might have to bide your time."
"You need to be preparing for not just next month, but have a three- to six-month outlook of how long it may take for you to find further work."
- AAP