Making the most of redundancy. THE AXA There s. life after redundancy PLAN.

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1 Making the most of redundancy THE AXA There s life after redundancy PLAN.

2 Making the most of redundancy What payments will I receive? You may receive a termination payment from your employer. The amount of money you receive will depend upon a number of variables, such as the industry in which you work and the number of years you ve been employed. Your redundancy payment will generally consist of: a tax-free amount an employment termination payment (ETP), and leave entitlements. What about tax? While it may be tempting to use your redundancy payment to pay off the mortgage, go overseas or invest in the share market, you need to consider factors such as the tax implications, as tax could substantially reduce the amount of money you receive. As your circumstances will be unique, we recommend you contact your financial adviser to discuss the specific tax implications of your redundancy payment. Employment termination payments Since 1 July 2007, employment termination payments can no longer be contributed into superannuation (other than for individuals who qualify to use the transitional arrangements see the following section). As a result, these payments must be cashed and are subject to tax depending on your age and the ETP components. Your employment termination payment will consist of a taxable component and may also include a tax-free component. The following table outlines the tax treatment of the taxable component, which includes Medicare levy. No tax is payable on the tax-free component.

3 Age at financial year end Tax on the taxable component Up to $150,0001 taxed at a maximum rate of 31.5% Excess over $150,0001 taxed at 46.5% Up to $150,0001 taxed at a maximum rate of 16.5% Excess over $150,0001 taxed at 46.5% If under 55 Up to $150,000 If 55 or over Up to $150,000 1 Indexed annually. Transitional termination payments From 1 July 2007 to 30 June 2012 (inclusive), the rate at which an ETP is taxed differs if the ETP is paid under a transitional arrangement. A transitional termination payment is one where: you were entitled as at 9 May 2006 to a payment on termination of employment under a written contract, Australian or foreign law, legal instrument or workplace agreement made under the Workplace Relations Act 1996, and the payment is made before 1 July A payment under a transitional arrangement can be: paid in cash as a transitional termination payment contributed to a superannuation fund, or used to buy a superannuation annuity before 1 July To gain a better understanding of how ETP taxation will affect you, contact your financial adviser.

4 What should I do with my payout? You may be considering whether it s better to invest your redundancy payment or use it for some other purpose, such as paying off the mortgage. There s no standard answer to this question as it depends on your individual circumstances. However, if you think you re likely to have trouble meeting any repayments, it is worth talking with your financial adviser about ways to restructure your finances. Redundancy may lead to a period of uncertainty and liquidity is therefore important. Be wary of tying up your payout until you know when you will be receiving a regular income again. What else should I consider? Government assistance It s important to carefully consider how you manage your redundancy payment because it may affect your entitlement to Centrelink benefits. Once you leave work, register with the relevant Government departments to ensure that you receive assistance if you re eligible. Personal insurance If you have: personal insurance provided by a super fund into which your employer has been contributing, or sick leave or insurance provided by your employer outside super, these may cease once you have been made redundant. It is important to review your needs as soon as possible to make sure you and your family are adequately covered. Some super funds allow you to continue with your insurance after you have left your employer through a continuation option. Your super fund administrator can help you with this.

5 Where do I start? Redundancy is not an uncommon occurrence most people know of someone who has been retrenched. However, when it s you facing redundancy, it s often difficult to remain calm and rational. As your circumstances will be unique, a qualified financial adviser can help you make the most of your money. Restructuring your financial affairs can be the first step to achieving a sense of direction and order in your life.

6 axa.com.au For more information If you need to know more about how to make the most of redundancy, contact your financial adviser who can help you with: deciding how best to use any redundancy payments assessing taxation implications and social security eligibility reviewing your insurance cover, and keeping your retirement plan on track. Contact your financial adviser Important information This publication has been prepared to provide you with general information only. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. In preparing this information we did not take into account the investment objectives, financial situation or particular needs of any particular person. Before making an investment decision, you need to consider (with or without the assistance of an adviser) whether this information is appropriate to your needs, objectives and circumstances. You should obtain a copy of the relevant Product Disclosure Statement (PDS) before making a decision to invest in any financial product. Copies of our PDSs can be obtained from your adviser or by calling This information is provided for persons in Australia only and is not provided for the use of any person who is in any other country S The National Mutual Life Association of Australasia Limited ABN AFS Licence No Member of the Global AXA Group