BY MARIA PAPA – THE CORONAVIRUS pandemic has caused massive job losses here in Australia. So far, nearly one million Australians have lost their jobs as companies are cutting down on employees to weather the storm. The travel, retail and hospitality industries were severely affected. Qantas recently stood down 20,000 of its workers in an attempt to save the airlines. If you are one of those who has been laid off because of COVID-19, here are a few steps to help ease the financial stress.
Know what you’re entitled to and your quick sources of cash
Losing your job suddenly is scary knowing that the next pay you’re expecting will not arrive. First thing you need to understand and find out are your quick sources of cash. Ask your employer if you’re entitled to redundancy or retrenchment payments, or annual leave and long service payouts. These payments will help tide you over for at least the next 2 weeks or one month depending on how long you’ve been with your employer.
The government and the states announced several financial assistance packages in the last 2 weeks for people whose livelihoods were affected by the coronavirus pandemic. There is the Job Seeker payment from the Australian government which was introduced for working age Australians without a job and currently looking for work. The federal government announced a $750 one off Economic Support Payment which will benefit 6.5 million Australians. Find out if you qualify for this payment and what your state government is providing in terms of support. State governments provide assistance with retraining, job-matching and other help to transition into jobs in key industries.
The Federal Government is allowing individuals affected by the coronavirus to apply for the early release of their superannuation. If you’re eligible, you can access up to $10,000 of your superannuation in 2019-2020 and a further $10,000 in 2020-2021. It is important that you work out what accessing your super early could end up costing you in the long term. Withdrawing money from your super today means less money available to you in your retirement so use this as your last resort.
Consider applying for jobs in the interim
Despite the stimulus and economic support packages announced by the government, there is a wait time and not everyone is eligible to access these payments. Surprisingly, there are a few companies that are actually hiring during these difficult times. Retail companies like Woolworths and Coles have announced its plans to hire thousands of new staff. Telecommunication companies such as Telstra are offering temporary call centre jobs. Services Australia and the state government are hiring people to help process welfare applications and payments.
Get serious about your budget
Set up a budget and cut your expenses. Remember, you have a mortgage or credit cards and you need to put food on the table. If you want to stretch whatever money you have left, do the following.
- Stop dining out and cook more meals at home
- Cancel a planned holiday
- If you pay for house cleaning, lawn maintenance, pool maintenance, consider doing these yourself since you’re home anyway
- If you’re one of those who spend $100 a month on cable and streaming services like Netflix, it’s time to cut the cord.
- Suspend your gym membership, especially since you can’t go there to work out now anyway
- Start doing your coffee at home instead of take-out
No matter how much you tighten your belt, you may still find yourself struggling to pay your bill on time. Fortunately, banks are now offering a six-month mortgage repayments holiday. Lenders have also made it easier for their customers to suspend their mortgage repayment by making the application available online. Most banks have dedicated webpages outlining coronavirus resources for their customers. It may also be worthwhile to ask your bank for a rate reduction and have them waive their fees. If you’re struggling to pay your credit card debt, get on the phone and call them to discuss your options such as extending payment deadlines, lowering interest rates or waiving late fees. Don’t wait until you start missing payments by reaching out to them as soon as you can. If you are renting, negotiate with your landlord to lower or suspend payment.
Upskill and learn new skills
The lockdown is a good time to explore the free TAFE courses offered in your state. Coursera and edX are two online learning platforms offering courses from various universities around the world. This may be the best time to consider a change in career or getting further upskilling. Online access to libraries in Australia is free. Reading books increase our knowledge and can help boost our mental health.
This article is for general information only and should not be considered personal financial advice. Before making a financial decision, you should seek independent advice from a mortgage broker, financial planner or an accountant.
Maria Papa is a senior finance expert specialising in home loans, investment loans, self-employed loans, Alt Doc loans, car loans, personal loans and loan protection. She has offices in Sydney and Melbourne. If you have questions, you can call Maria at 0430 144 008 or email her at mpapa@maverickfinance.com.au