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Taking a Voluntary Redundancy from the public service

By Howaboutthat 17 June 2013 24

Ok folks, here’s the thing. After 26 years in the APS I’ve given it the flick. Or, to put it in more technical terms, I’ve been offered a Voluntary Redundancy from the Australian Public Service and I’m going to take it.

There’s one part of me that says “Hoo-Bluddy-Ray, Hallelujah, Saints Preserve Me and Toorah all you tossers”. Then again, there’s another part of me that says “OMG …I’m going to be Unemployed in a couple of weeks…What now?”.

This is A Big Huge Might-Be-No-Good Or May-Be-Very-Good-But-Who-Knows-Very-Scary-Thing.

Have any other Rioters taken a VR recently? Did it turn out OK, or the other way? Is anybody considering doing it and needs advice on the steps? What’s the vibe out there? I’d really like to hear from anybody who has done it , would like to do it, or wouldn’t dream of doing it in a million years. And why or why not?


What’s Your opinion?


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Taking a Voluntary Redundancy from the public service
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LSWCHP 9:51 pm 24 Jun 13

Christoph Zierholz said :

I did some years ago and went into business for myself.

It’d probably take a book to cover the last few years of trials and tribulations but for me it was the right thing to do.

My take on it is that I am the kind of person who had to give it a go and see what happened and as long as I gave it my best shot then even if I failed, at least I wouldn’t be sitting at a desk for the rest of my life contemplating “…what if…?”

As an aside, I didn’t leave my old job because I hated it or anything, it was interesting enough and I worked with great people but it was just that I found something that I wanted to do more.

Anyway, good luck.

Hey Cristoph, I sample your fine products regularly out at Fyshwick, so I’m glad you made the decision you did. 🙂

Terra 3:57 pm 21 Jun 13

After 26 years yeah? Good luck!
I went the other way, after 26 years in the private sector I retrained and scored a Public Service job in a central agency.

Nothing annoys me more than the old biddy’s who have never worked elsewhere in their lives complaining about conditions, treatment and the like. I wish there were some way to show them just how insulated they are.

There’s the real world and the PS. Sure, this is how it all should be, but it’s not. It’s sooo not.

Good luck.

laughtong 10:51 am 21 Jun 13

I took a package nearly 2 years ago after 25 years in the Public Service. I planned to move to near Melbourne for family reasons.
As a librarian with a range of experience and skills, I was already looking for work options in Melbourne and had several interviews before and after finishing work.
I was offered a role in the academic sector the day we were being packed to leave Canberra. Roughly equivalent role but considerably lower salary. This was about a week after finishing work.

As others have said, seek financial advice from companies that specialize in APS super. They are around.

The package and selling in Canberra allowed us buy here mortgage free – making the lower salary plus APS super very livable, and giving the potential to build a 2nd super money pot.

Consider your age if planning to look for work – my hubby has been unable to get work here, largely due to his age.

ramblingted 9:23 am 21 Jun 13

Well, I can speak from a couple of experiences. Took a VR in 2000 after 20 years in the APS as an EL2. Had a part time consulting job lined up which was great for a year or so, then rejoined the APS, and got back to my old level by 2004 before taking another VR in 2010.

The only thing I regret is the big slab of unused sick leave I left behind the first time. While it really depends upon what stage of life you’re at (kids at school, mortage etc) one thing I would suggest is to take up the offer of free financial advice which usually comes as part of the deal. While you need to be aware of financial advice from advisers with an interest in investment commissions, you should get the good oil on the tax treatment of any lump sum you might want to take. It gets complicated depending upon the various tax status of your contributions.

Roundhead89 1:52 am 21 Jun 13

After September 14 will you change the heading on this post to “Taking a compulsory redundancy from the public service”?

poetix 10:30 pm 20 Jun 13

OpenYourMind said :

poetix said :

OpenYourMind said :

Gotta say this RiotACT post deserves some kind of award. A question is posted and the responses all seem reasonable, honest, non abusive and relevant to the original post.

You would say that, wouldn’t you…I know your type. (-:

You could write some poetry, but what rhymes with voluntary redundancy??

Vinegary incumbency?

(Not really, but let’s pretend. I am very tipsy.)

OpenYourMind 7:57 pm 20 Jun 13

poetix said :

OpenYourMind said :

Gotta say this RiotACT post deserves some kind of award. A question is posted and the responses all seem reasonable, honest, non abusive and relevant to the original post.

You would say that, wouldn’t you…I know your type. (-:

You could write some poetry, but what rhymes with voluntary redundancy??

poetix 9:41 am 20 Jun 13

OpenYourMind said :

Gotta say this RiotACT post deserves some kind of award. A question is posted and the responses all seem reasonable, honest, non abusive and relevant to the original post.

You would say that, wouldn’t you…I know your type. (-:

OpenYourMind 10:40 pm 19 Jun 13

Gotta say this RiotACT post deserves some kind of award. A question is posted and the responses all seem reasonable, honest, non abusive and relevant to the original post.

what_the 10:07 pm 19 Jun 13

Leaving the public service was the best thing I ever did. Getting paid to leave is even better.

Alien Fiend 9:01 pm 19 Jun 13

“Ah, the best thing I ever did” they say when you bump into them in town. “Yes, landed on my feet, took the dosh and am now back working where I did before (or similar)”. Hmmm.

As for me, happily took a VR after 24 years service (no debt and no plans or jobs in the wind) and swore that whatever happened, I would NEVER say that to anyone. And I haven’t. But now with a job where I get to do real work, that pays me $40k more than my last APS position, I guess I have been lucky.

But take nothing for granted. Everyone has a VR story and I’m happy to admit that during the few months I had off before I landed my new job, I avoided places where I might have bumped into the “best thing I ever did” people.

dtc 3:59 pm 17 Jun 13

harvyk1 said :

It’s all well and good to go and put money into paying off loans and setting up investments, but if the don’t have a job when the now reduced pot of money runs out you may find it very difficult to get access to money for general day to day living short of going the centrelink route. It is also at this point in time that your risking some very bad things happening (eg going bankrupt)..

Either have a redraw account or put the money in a mortgage offset account. Usually it works out much the same, but it means you will have access to the money if you need it. Caveat – it may make a difference for Centrelink purposes (I imagine the mortgage offset counts as an asset in some way).

You also need to assess your skills. To be blunt, everyone in the private sector (other than ‘manager’ or “HR”) is a specialist. Specialist accountant or lawyer or mechanic or IT. A lot of people in the APS are generalists – policy in particular, or a bit of this or that. A great public sectory policy person may not have much chance of getting a job in the private sector – maybe some temp contracting work back in the APS or maybe an industry body, but thats about it. And if you want to move out of Canberra then those skills arent much use.

But if you are a specialist, then its a much more attractive deal.

wrigbe 3:57 pm 17 Jun 13

I took got a VR about 12 months ago after around 22 years service. For me I it was the perfect timing as I have some chronic health conditions I am trying to get under control at the moment, I am trying to complete a PhD, I have young children and I also have a partner who works full-time. I took a pension and put the rest on the home loan. The pension is not huge but it is not dissimilar to what I would earn if I was working a couple of days a week (which is the most I would manage atm anyway), and I get it indexed for the rest of my life.
And for me I am young enough to still have a second career and a second superannuation once I finish this blasted PhD.

I was in the PSS scheme and the pension option from that was not too bad.

harvyk1 1:41 pm 17 Jun 13

I’ve had a redundancy (private sector, but the principal is the same). It was enough to last nearly 4 months on based on maintaining our current lifestyle. In reality it only took me a week to find a new job.

That said be careful about paying off loans and doing all the wonderful things as suggested here until you have your next job in hand.

It’s all well and good to go and put money into paying off loans and setting up investments, but if the don’t have a job when the now reduced pot of money runs out you may find it very difficult to get access to money for general day to day living short of going the centrelink route. It is also at this point in time that your risking some very bad things happening (eg going bankrupt).

That redundancy money is suppose to keep you going until you have your next job. Once that principal purpose has been fore filled use it as you wish.

Christoph Zierholz 1:17 pm 17 Jun 13

I did some years ago and went into business for myself.

It’d probably take a book to cover the last few years of trials and tribulations but for me it was the right thing to do.

My take on it is that I am the kind of person who had to give it a go and see what happened and as long as I gave it my best shot then even if I failed, at least I wouldn’t be sitting at a desk for the rest of my life contemplating “…what if…?”

As an aside, I didn’t leave my old job because I hated it or anything, it was interesting enough and I worked with great people but it was just that I found something that I wanted to do more.

Anyway, good luck.

Grail 12:18 pm 17 Jun 13

I was given a redundancy some time back, the payout was equivalent to about half a year’s salary. I wasn’t complaining! First thing I did was put the entire lump-sum into my home loan, which got me to the point that I only “needed” half the previous salary to meet my obligations. This alone was a great benefit to me since I could look for a job without the pressure of having to find something immediately with a suitable salary.

In addition, putting the money into the mortgage meant I had no liquid assets counting against me when it came to asking Centrelink for help. Thankfully I found another job before Centrelink would have gotten involved, so I didn’t have to subject myself to the full-time job that is job hunting under the whip.

If your situation is more complex than having a home loan on your primary place of residence, I would highly recommend searching for financial advice from someone who is not flogging superannuation scams. I mean schemes, sorry, I would never want to label Johnny Howard’s pet industry in anything other than the best light possible.

My unqualified, you-found-it-on-the-Internet-written-by-a-guy-wearing-a-tinfoil-hat-it-must-be-true advice is to take as much of the payout as a lump sum as possible, since any ongoing payment or contribution to superannuation is subject to the whims of the new Government that will appear in September. Put that lump sum to use by dismissing the most expensive loans and credit you have. Do not invest in financial-advisor-recommended superannuation: that industry is a scam, you will never see your money again.

Okay. I have taken my medication and I will put the tinfoil hat away just as soon as they stop beaming the mind control rays into my TV.

But seriously: lump sum, pay off debts. You will be much happier in the long run. Accept that you will be “between jobs” for a while and do what is necessary to placate the other half during this interval. Some people might even decide to extend the “between jobs” interval indefinitely due to extra contact with kids/grand kids, savings on travel and child care, and the simple luxury of having time to prepare nice home cooked food instead of Chicken Duets from the freezer every night.

And if you have already paid off your mortgage? Buy an investment property in not-Canberra and retire on the new income 🙂

watto23 11:56 am 17 Jun 13

As someone who has worked in private industry my whole life in Canberra, the one thing many public servant do underestimate is the difference. If you are the sort to complain about public service working conditions, like annual payrises of 3 or 4 % not being enough, or leave conditions, etc then you will find no joy in the private sector. its also a common myth if you are working in the private sector you must be earning a lot, but in Canberra its not the case. Most do it because of the work, or the industry.

So if you are considering leaving to take a redundancy and plan to keep working, I’d be looking at the things you need in a job and look for jobs first for as long as you can.

Ben_Dover 11:31 am 17 Jun 13

Have they offered you a “package”?

Felix the Cat 10:26 am 17 Jun 13

I took a not-so-voluntary redunancy a few years back and finished on Friday and started a new job in private sector on Monday. But the new job was quite different to the old and was a fair bit less money. But it was a job.

The redundancy money paid off the mortgage which was good so I could afford to live on the lower wage.

I had thought about buying a business (franchise) with the redunancy money but decided the money earning capacity wasn’t enough to justify the long hours (job might be 9 – 5 but then you have paperwork to do such as re-ordering stock, BAS statements etc etc) and that I would be better off on wages – and theoretically more secure employment.

gungsuperstar 10:16 am 17 Jun 13

I took a VR just over a year ago from the APS. I was probably one of “those people” that conservative public service bashers hate. I got tens of thousands of dollars to leave the job… that I was already planning to leave, cos I had another one lined up.

Because I’d had under 10 years service, I think I only would’ve had to have waited 7 weeks or so to be able to work in the APS, which is a bit of a joke. Had I not had another job lined up, I would’ve had money to survive 6 months, which is plenty of time for a break, to apply for work, and then to apply for another APS job if I had gotten desperate.

A couple of things for people considering it to bare in mind:
– It’s not actually a crazy amount of money. While there is the 2 weeks pay for every year of service, the bulk of the money comes from long service leave and annual leave payout.

– watch your tax. If your department offers reimbursement for financial advice, take it so you know what you’re in for. There’s a very friendly tax rate on redundancy – but when you factor that into your total income for the year, I ended up with a tax bill for nearly $2k last financial year.

– remember that every permanent APS job asks you whether you’ve ever taken redundancy. Having sat on recruitment panels before, I don’t remember ever considering the response to that question – but it must be there for a reason. So the 7 weeks wait before you can work in the public service again for less than 10 years service, or the 7 months you have to wait for more than 10 years could become longer depending on how recruiters respond to that question.

My experience was entirely positive. It cleared my debt, gave me a great holiday, it left me a good little nest egg, and it gave me the confidence that the pay cut I took for the new job was manageable. Given the same circumstances again, I’d do the same thing 100 times out of 100. (The fact that I worked in the APS for 5 years and spent the last 4 years trying to get out of it is a factor).

But everyone’s circumstance is different. If I hadn’t had the other job lined up, I wouldn’t have had the confidence to leave. If I had a family to support, I wouldn’t have given up the security. And if I were doing it now, I certainly wouldn’t be taking the APS for granted as a future employment opportunity if my new job hadn’t have worked out.

It really is one of those “tread your own path” things.

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