• Genuine redundancy payment

  If you’re receiving genuine redundancy some (or all) of your payment will be tax-free and received as cash. You cannot roll this into your super. However, you may continue to make contributions into your super, subject to eligibility criteria and contribution caps.

  Note: if you're over Age Pension age, you're not eligible for a genuine redundancy payment and your entire payout will be treated as an ETP.

• Employment Termination Payments (ETPs)

  When you leave your employer, you may be entitled to an ETP. ETPs (including genuine redundancy payments over the tax-free limit) consist of a tax-free component and a taxable component. Amounts that may be included in an ETP are:

  • genuine redundancy payments over the tax-free limit
  • unused rostered days off and sick leave
  • payments in lieu, gratuities, compensation payments for loss of employment.

  You can't roll your ETP payment into your super. However, you may continue to make contributions into your super, subject to eligibility criteria and contribution caps.

• Other redundancy payments

  On leaving your employer as a result of a termination or redundancy, you may also be eligible to receive a range of other cash payments.

  • unused annual and long service leave salary and wages owed to you.

  Leave that's not considered an ETP as a result of a redundancy is taxed at concessional rates.

• Put it in your bank account
  While it may be tempting to immediately spend some of your redundancy payment on paying off debts or purchasing new items, you should remain as financially flexible as possible while you consider the next steps in your life.
• Reduce or pay off debts
  If you have high levels of debt you may want to consider paying it off with your lump sum payment. It's important to plan for your future. If you pay off your debts with your payment you may not have the money to pay for your day to day expenses.
• Put it in your Mortgage offset account
  You can park your redundancy package in an offset account and reduce the amount of interest you pay on your mortgage, whilst retaining flexibility to access your funds if required in future.
• Contribute to super

  You can also put a lump sum payment into your super. If your income in the year falls below a certain amount you may also be eligible for a government co-contribution. There are contribution limits to be aware of before making any larger contributions into your super.

  Boost your super

Other considerations

• Find out about Centrelink payments
  You may be eligible to receive Centrelink income assistance. Waiting periods may apply, so you should contact Centrelink as soon as possible to get the right information. Contact Centrelink online or call 13 28 50 (Employment Services) or 13 23 00 (Retirement Services).
• Set a budget
  Preparing a budget will give you an idea of the cash reserves you're likely to need in the coming months. Use our Budget planner and remember to take into account the length of time it may take you to find new employment and include any entitlements to Centrelink payments you may receive.
• Consolidate your super accounts
  Do you have more than one super account, eating away your savings in unnecessary fees? You can check if you have any other super accounts instantly by logging into your online account. You can also combine them together in a few clicks, it takes less than five minutes and could save you heaps in the long run. Make sure you read our list of things to think about before considering consolidating your accounts into one super fund.