Emergency strategies when income stops
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- Triage your cash flow first. List essential expenses (mortgage/rent, utilities, insurance) versus discretionary (or optional) expenses and pause the latter immediately.
- Understand your redundancy payment’s tax treatment. For 2026/27, a genuine redundancy payment is tax-free up to $13,598 plus $6,801 per completed year of service; anything above that is taxed as an Employment Termination Payment (ETP), generally at concessional rates up to the $270,000 ETP cap.1
- Check Centrelink support early, noting redundancy pay can trigger a waiting period before JobSeeker Payment begins. Redundancy payouts can trigger an Income Maintenance Period, where Centrelink delays payments for the number of weeks your payout covers, calculated by dividing your total lump sum by your normal weekly wage.2
- Review income protection cover. Most policies won’t pay out for redundancy itself, but it’s worth checking with your insurer.
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Accessing super early (if eligible)3
Redundancy alone does not give you access to your super early unless you have reached age 60 or met certain other requirements. This is one of the most common misconceptions we hear. Early release generally requires:
- Severe financial hardship. You must have received an eligible income support payment continuously for 26 weeks, and can then withdraw between $1,000 and $10,000, once every 12 months.4 The ATO does not process “Severe Financial Hardship” applications. Instead, you must apply directly to your superannuation fund, which holds strict criteria.
- Compassionate grounds (medical, mortgage default, funeral costs) via a separate ATO application.5
- Reaching preservation age (currently age 60) and meeting a standard retirement condition of release.
Retraining and upskilling investments
- Redundancy can be an opportunity to redirect part of a tax-free payout into a course, certification or training that lifts future earning capacity.
- Government-subsidised training places and Fee-Free TAFE options are worth checking before self-funding.
- Weigh HECS-HELP loans against paying upfront if cash flow allows.
Why reach out for financial advice
We can help you sequence these decisions correctly, making the most of the tax treatment of your payout, avoiding an unnecessary or costly early super withdrawal, and rebuilding an income plan so a redundancy doesn’t derail retirement savings.
This is exactly the kind of “behavioural coaching” and structuring that industry research6 shows drives the bulk of an adviser’s measurable value during periods of financial disruption.7
Faced or facing redundancy?
Book a review before you make any big decisions, as timing and sequencing can genuinely change the outcome.
The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional. We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.
[1] Leaving your job | Australian Taxation Office
[2] Income maintenance period – Services Australia
[3] Early access to super | Australian Taxation Office
[4] When you can access your super early | Australian Taxation Office
[5] When you can access your super early | Australian Taxation Office
[6] Value of a Financial Adviser
[7] Where advisers add most value. Hint: it’s not investing – Professional Planner
