Your Redundancy Resilience Plan
Whether or not redundancy is on your horizon or not, building financial resilience is time well spent. You switch from "I hope I would be ok" to "I know I"ll be more than fine".
Know your number. Not your income number - your real monthly "cost to be you." Analyse three months of banks statements using my free spending planner (tab 3). If that reeks of effort, don't worry - there's an app for that! Frollo, WeMoney or YNAB all analyse you spending data will do it for you, with bank-grade security built in.
Build or top up your emergency buffer. Even a small buffer changes how you make decisions under pressure.
Personally, I like having a minimum of 6 month's of living expenses stashed away in mine.
Know your entitlements before you need them (more on this below).
Hold off on big financial commitments for now. Things like new car loans, stretching your mortgage borrowing, large renovations.
Keep your skills and network warm, proactively. Don't wait until you're job hunting.
But what if I am made redundant?
First up, I'm sorry. Redundancies don't always feel nice. It says nothing about you or your value. Fact.
Secondly, understand your entitlements. There's two separate things sit inside the National Employment Standards (NES) under the Fair Work Act.
These are NES minimums. So your award, enterprise agreement, or contract might entitle you to more. And the redundancy pay scale only applies to employers with 15 or more staff, so check where you sit if you work for a smaller business.
Many business will also offer you support to brush up skills, rewrite your resume, consult a career coach and search for new roles as part of your redundancy. It's often referred to as outplacement support and it's worth asking for even if it isn't offered upfront as part of your redundancy package negotiation.
The Tax Treatment
For the current 2026-27 financial year, redundancy payments are tax-free up to $13,598 plus $6,801 per year of service. Your payment in lieu of notice counts toward that too. Unused annual leave on the other hand doesn't: it's taxed separately, withheld at
a flat 32%. It's worth noting this so you're not confused AF when you get your final payslip.
The Big Question: How Long Will Your Cash Last?
The clarity that answering this question brings matters so much. It tells you how long you can actually go without needing a new income before life gets tricky/stressful/desperate.
Here's the formula:
Runway (months) = (Payout after tax + savings you're willing to use) ÷ your monthly "cost to be you".
That's your unchanged runway with zero income and no changes to your expenses. Of course, if you start to cut back spending then you can extend that runway. Consider hitting pause on things like discretionary shopping, subscriptions, non-urgent purchases.
I would invest some time working out this number before you make any big decision on spending, a new role or a career pivot.
Don’t Hesitate to get Support
If you do find yourself in a (understandable) bind without income then get support early:
Contact your bank or lender's hardship team before you miss a payment. Ask about a repayment pause or restructure on your mortgage, personal loan, or credit card.
National Debt Helpline: 1800 007 007 it's free and confidential.
Check with Services Australia about JobSeeker eligibility. A waiting period can apply depending on your payout so get advice on your personal situation.
Why Redundancy takes more than your Income
The financial hit from a redundancy is obvious and in many ways the easiest part to deal with. The bigger hit is what it does to your wellbeing. There's a psychological theory that really digs into this - it's called Marie Jahoda's latent deprivation model. Jahoda argues that a job doesn't just give you income but five additional things that you never had to think about because it was always there. When you lose the job, you lose all five at once leaving you feeling somewhat lost.
Time Structure: Wake up, commute, meetings, lunch, work, home. You never had to design your day as it was largely designed for you. Without that structure the days can start to blure. Your momentum dissipates. The phone stops ringing. A dull anxiety creeps in. The antidote: deliberately structure your days with a fixed wake up time, one bounded block for job search, and a real knock off time.
Social Contact: The colleagues, the small talk, the incidental bumping into a friend. It required zero effort to organise and kept you socially connected. Without it you feel isolated and it happens quicker than you expect. People you saw every day for years, even decades disappear from your life. The antidote: schedule contact on purpose - regular coffee dates, co-working sessions and catch ups that aren't focused on finding you a new job all help.
Collective Purpose: Being part of something bigger that yourself.
Initially it's fun to have clear diary but before you know it you miss having something to do, something to contribute to. The antidote: find a temporary source of purpose by volunteering, starting a project or helping someone else solve a problem.
Status: This one is hard to admit but I got a lot of status from my old job titles - Chief Revenue Officer, Director of Retail Banking, Associate Director of blah blah blah. "What do you do" has an easy answer when you have a job title. Without it you lose the short hand for who you are in the room. We dedicate so much of our lives to work that we can be left wondering "Who am I outside of the title?". The antidote: Find identity beyond the title - parent, coach, baker, theatre lover or perhaps history addict? Practice saying this before you first social outing so you've got a confident answer prepared.
Finally, Activity: A reason to use your brain, your skills, your hands. Without the job a restlessness can set in. The sense that " should be doing something" but with nowhere to direct it. The antidote: channel it elsewhere - a project, upskilling, or a creative outlet.
Experiencing a tapestry of emotions off the back of a redundancy? You're not broken. You're simply human and your job was doing so much more for your life than the paycheque ever let on.
This is the kind of work I do with clients every day - not just the numbers, but the story behind the numbers. If you're ready to define your enough and build from there, I'd love to work with you. You can find out more about my coaching programs at betsywestcott.com/coaching.