Surviving the Recession - Redundancy Tips

Apply for ReStart

This is a package of benefits available through Work and Income if you’ve recently been made redundant from full-time work. It has three components:

 - ReCover – a payment if you’ve got dependent children and you’re no longer entitled to an in-work tax credit

 - RePlace – an extra payment to help with accommodation costs if you’re already getting the maximum Accommodation Supplement.

 - ReConnect – help in finding a new job

Go to www.workandincome.govt.nz or phone 0800 559 009 for more info or an appointment at your local Work and Income centre.

Apply for Working for Families

If you have children, and you or your partner are made redundant, then its likely that you will be eligible for a Working for Families tax credit; if you currently already receive a tax credit then it's likely that this will go up.

You can work out what you entitlements are on the IRD website, go to www.ird.govt.nz for more detail. You can use their online calculator, downloadable worksheet or call them on 0800 227 773.

Apply for hardship under the CCCFA

If you have a credit contract and can’t see your way to keeping up payments with your bank or finance company for the time being,  apply to change your contract on the grounds of “unforseen hardship” - this includes such events as loss of employment.  You can apply to extend the contract term, and so reduce each payment amount, or  to postpone payment dates or both. But there is a catch – your payments MUST be up to date; so make sure you consider this option BEFORE you get into financial trouble.

Go to www.consumeraffairs.govt.nz for more info or call BUDGETLINE to speak with a budget adviser on 0508 283 438.

Check credit contracts for redundancy clauses

Some credit contracts include redundancy insurance clauses. This is a payment made upfront to cover you in case of redundancy. You may not remember paying for this insurance and you should read any credit contracts to find out if this was included.

If you have lost your credit contracts you have the right to request a copy of your contract under the CCCFA. Call your credit provider and request a copy over the phone, there should not be a charge for this.

For more info on this go to the Commerce Commission website, www.comcom.govt.nz or call BUDGETLINE to speak with a budget adviser on 0508 283 438.

Apply for hardship to access your KiwiSaver funds

In some cases you may be able to make an early withdrawal from your KiwiSaver fund. One of those cases is significant financial hardship. The criteria is:

 - Significant financial hardship includes difficulties that arise because you're "unable to meet minimum living expenses", and

 - You may be required to "complete a statutory declaration about your assets and liabilities, and provide other documents or information to support your application."

The amount you can withdraw is limited; you cannot withdraw the government kick-start or member tax credit contributions.

Go to www.kiwisaver.govt.nz for more info or call BUDGETLINE to speak with a budget adviser on 0508 283 438.

General Advice

·       You’ll  be able to get yourself out of trouble more easily if you talk to creditors BEFORE you fall behind on your payments.  Talk with your bank if you’ve got a mortgage, credit card debt or loan with them, to let them know that things are about to become tough. In our experience, banks are open to negotiation, and can offer mortgage holidays and extended terms to customers that meet their criteria.

·       If you’ve never worked to a budget before, now is the time to start. Look under  “Locate a service” or dial BUDGETLINE on 0508 283 438, for free personal budgeting help. 

·       Be creative about boosting your income. A hobby (eg craftwork) that can be sold, a weekend job, casual work, freeing up a room for a boarder, expecting your kids to pay some board if they have a paying job etc…

·       Make sure you’re getting all your entitlements from Work and Income.  If your pay has dropped you may be eligible for a higher accommodation supplement , Temporary Additional Support, or recoverable assistance payments (interest-free loans) for specified items/costs.

If you have a mortgage (even if you don't) consider getting redundancy cover insurance. Insurance companies offer various products but most provide up to a certain level of your income for up to 6 months or more. Check out the qualifying periods with your insurance company first.