Are you ready for redundancy?

Having a lean mean budget becomes especially important if you lose your job. But that doesn't have to be a nightmare. There are things you can do now which will help later:

• Do what you can to put aside a nest egg that you can draw on if you're made redundant. A nest-egg of $16,200 that's drawn down at $300 a week would last a whole year of unemployment.
  
  
• Unemployed people can get a range of benefits from the government, including the unemployment benefit (tested for income but not assets) and an accommodation supplement (tested for both income and assets).
  
  Under the current rules a couple with "cash assets" of $16,200 ($8100 if you're single) or less are eligible for the accommodation supplement (what you actually get depends on your costs and where you live). If you've been made redundant recently, the first $25,000 of your after-tax redundancy payment may not count as assets. Work and Income's website has the latest information on assistance.
  
  
• Try now to reduce what you owe on your mortgage. That means you'll be better prepared to cope with financial shocks like unemployment.
  
  
• Consider adding a redundancy benefit to your life insurance. A redundancy benefit means your mortgage costs will be covered for a set period if your job disappears. A redundancy benefit of around $400 a week for six months added to an existing policy of $150,000 could cost as little as $11 a fortnight. Any payments you receive from this sort of policy won't be counted as income - but while you're getting the payments you may not be eligible for an accommodation supplement.
  
  
• Review how much you're paying for insurance, but don't ditch it if you lose your job. Insurance against major risks is even more important when you have no financial "give" to deal with shocks.