13 Nov 2015

If you’ve lost your job, there’s no doubt that it was upsetting and hard to accept, but it’s important to have a clear understanding of what you’re entitled to– such as severance, notices, and what you can do with your finances. It is also important to start considering ways to help with your financial security right away. Watch the video above with Christine Wiley on CBC News!

Severances

This depends on your income/salary and compensation arrangements, but on a minimum scale:

– 1 week notice: 3 months – 2 years
– 2 weeks notice: 2-4 years
– 4 weeks notice: 4 – 6 years
– 5 weeks notice:  6 – 8 years
– 6 weeks notice: 8-10 years
– 8 weeks notice: 10+ years

The time frame of these notices can also be paid in lieu.

Taking Out a Lump Sum

You may receive a peace of mind. Opportunities with this approach is allocating it towards a large debt, or investments (but you will taxed on it as well. Keep in mind of deferrals if the options are available).

RRSP

A great opportunity to look at if you have a limit on your RRSP that you haven’t used. Don’t touch it though! It needs to go directly to the RRSP, otherwise there will be withholding taxes. If you’ve worked for your employer prior to 1996, there is a retiring allowance provision– a part of your severance can be directed there without affecting your RRSP limit.

EI

There is a 2 weeks waiting period, so apply as soon as possible! They will look at your pay out (salary, bonuses.etc) that will be allocated to a period, which you wouldn’t be eligible for EI, but make the claim as soon as you can!

Other Employer Assistance

There are no other legal requirements, but many employers offer:

– Job Counseling
– Skill Upgrades
– Networking Opportunities

Other Advice

Don’t sign anything until you’re sure what you’re getting and what you’re entitled to. Hire a lawyer to look over information if need be as it is tax deductible too!

 

Think smart and think safely with your finances! It’s great to know what you’re entitled to and what ways you can allocate what you have the best!

Comment below for questions or concerns!