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5 reasons kids still need to learn handwriting (no, AI has not made it redundant)

<p><a href="https://theconversation.com/profiles/lucinda-mcknight-324350">Lucinda McKnight</a>, <em><a href="https://theconversation.com/institutions/deakin-university-757">Deakin University</a></em> and <a href="https://theconversation.com/profiles/maria-nicholas-1443112">Maria Nicholas</a>, <em><a href="https://theconversation.com/institutions/deakin-university-757">Deakin University</a></em></p> <p>The world of writing is changing.</p> <p>Things have moved very quickly from keyboards and predictive text. The rise of generative artificial intelligence (AI) means <a href="https://theconversation.com/in-an-ai-world-we-need-to-teach-students-how-to-work-with-robot-writers-157508">bots can now write human-quality text</a> without having hands at all.</p> <p>Recent improvements in speech-to-text software mean even human “writers” do not need to touch a keyboard, let alone a pen. And with help from AI, <a href="https://www.theguardian.com/technology/2023/may/01/ai-makes-non-invasive-mind-reading-possible-by-turning-thoughts-into-text">text can even be generated by decoders</a> that read brain activity through non-invasive scanning.</p> <p>Writers of the future will be talkers and thinkers, without having to lift a finger. The word “writer” may come to mean something very different, as people compose text in multiple ways in an increasingly digital world. So do humans still need to learn to write by hand?</p> <h2>Handwriting is still part of the curriculum</h2> <p>The pandemic shifted a lot of schooling online and some major tests, <a href="https://www.nap.edu.au/naplan/understanding-online-assessment">such as NAPLAN</a> are now done on computers. There are also <a href="https://theconversation.com/teaching-cursive-handwriting-is-an-outdated-waste-of-time-35368">calls</a> for cursive handwriting to be phased out in high school.</p> <p>However, learning to handwrite is still a key component of the literacy curriculum in primary school.</p> <p>Parents may be wondering whether the time-consuming and challenging process of learning to handwrite is worth the trouble. Perhaps the effort spent learning to form letters would be better spent on coding?</p> <p>Many students with disability, after all, already learn to write with <a href="https://www.understood.org/en/articles/assistive-technology-for-writing">assistive technologies</a>.</p> <p>But there are are a number of important reasons why handwriting will still be taught – and still needs to be taught – in schools.</p> <figure class="align-center "><img src="https://images.theconversation.com/files/530220/original/file-20230606-17-7sme40.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px" srcset="https://images.theconversation.com/files/530220/original/file-20230606-17-7sme40.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=600&amp;h=400&amp;fit=crop&amp;dpr=1 600w, https://images.theconversation.com/files/530220/original/file-20230606-17-7sme40.jpg?ixlib=rb-1.1.0&amp;q=30&amp;auto=format&amp;w=600&amp;h=400&amp;fit=crop&amp;dpr=2 1200w, https://images.theconversation.com/files/530220/original/file-20230606-17-7sme40.jpg?ixlib=rb-1.1.0&amp;q=15&amp;auto=format&amp;w=600&amp;h=400&amp;fit=crop&amp;dpr=3 1800w, https://images.theconversation.com/files/530220/original/file-20230606-17-7sme40.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;h=503&amp;fit=crop&amp;dpr=1 754w, https://images.theconversation.com/files/530220/original/file-20230606-17-7sme40.jpg?ixlib=rb-1.1.0&amp;q=30&amp;auto=format&amp;w=754&amp;h=503&amp;fit=crop&amp;dpr=2 1508w, https://images.theconversation.com/files/530220/original/file-20230606-17-7sme40.jpg?ixlib=rb-1.1.0&amp;q=15&amp;auto=format&amp;w=754&amp;h=503&amp;fit=crop&amp;dpr=3 2262w" alt="A child writes in an exercise book." /><figcaption><span class="caption">Technology changes mean we can ‘write’ without lifting a pen.</span> <span class="attribution"><span class="source">Shutterstock.</span></span></figcaption></figure> <h2>1. Fine motor skills</h2> <p>Handwriting develops critical fine motor skills and the coordination needed to control precise movements. These movements are required <a href="https://www.understood.org/en/articles/all-about-fine-motor-skills">to conduct everyday</a> school and work-related activities.</p> <p>The refinement of these motor skills also leads to handwriting becoming increasingly legible and fluent.</p> <p>We don’t know where technology will take us, but it may take us back to the past.</p> <p>Handwriting may be more important than ever if <a href="https://www.theguardian.com/australia-news/2023/jan/10/universities-to-return-to-pen-and-paper-exams-after-students-caught-using-ai-to-write-essays">tests and exams return to being handwritten</a> to stop students using generative AI to cheat.</p> <h2>2. It helps you remember</h2> <p>Handwriting has important cognitive benefits, <a href="https://www.kidsnews.com.au/technology/experts-say-pens-and-pencils-rather-than-keyboards-rule-at-school/news-story/abb4607b612c0c4f79b214c54590ca92">including for memory</a>.</p> <p>Research suggests traditional pen-and-paper notes are <a href="https://journals.sagepub.com/doi/abs/10.1177/154193120905302218?journalCode=proe">remembered better</a>, due to the greater complexity of the handwriting process.</p> <p>And learning to read and handwrite are <a href="https://www.aare.edu.au/blog/?p=5296">intimately linked</a>. Students become better readers though practising writing.</p> <h2>3. It’s good for wellbeing</h2> <p>Handwriting, and related activities such as drawing, are tactile, creative and reflective sources of pleasure and <a href="https://theconversation.com/writing-can-improve-mental-health-heres-how-162205">wellness</a> for writers of all ages.</p> <p>This is seen in the popularity of practices such as print <a href="https://www.urmc.rochester.edu/encyclopedia/content.aspx?ContentID=4552&amp;ContentTypeID=1">journalling</a> and calligraphy. There are many online communities where writers share gorgeous examples of handwriting.</p> <figure class="align-center "><img src="https://images.theconversation.com/files/530253/original/file-20230606-29-eb7vk3.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px" srcset="https://images.theconversation.com/files/530253/original/file-20230606-29-eb7vk3.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=600&amp;h=400&amp;fit=crop&amp;dpr=1 600w, https://images.theconversation.com/files/530253/original/file-20230606-29-eb7vk3.jpg?ixlib=rb-1.1.0&amp;q=30&amp;auto=format&amp;w=600&amp;h=400&amp;fit=crop&amp;dpr=2 1200w, https://images.theconversation.com/files/530253/original/file-20230606-29-eb7vk3.jpg?ixlib=rb-1.1.0&amp;q=15&amp;auto=format&amp;w=600&amp;h=400&amp;fit=crop&amp;dpr=3 1800w, https://images.theconversation.com/files/530253/original/file-20230606-29-eb7vk3.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;h=503&amp;fit=crop&amp;dpr=1 754w, https://images.theconversation.com/files/530253/original/file-20230606-29-eb7vk3.jpg?ixlib=rb-1.1.0&amp;q=30&amp;auto=format&amp;w=754&amp;h=503&amp;fit=crop&amp;dpr=2 1508w, https://images.theconversation.com/files/530253/original/file-20230606-29-eb7vk3.jpg?ixlib=rb-1.1.0&amp;q=15&amp;auto=format&amp;w=754&amp;h=503&amp;fit=crop&amp;dpr=3 2262w" alt="A book with a calligraphy alphabet." /><figcaption><span class="caption">Caligraphers focus on making beautiful, design-oriented writing.</span> <span class="attribution"><span class="source">Samir Bouaked/Unsplash</span></span></figcaption></figure> <h2>4. It’s very accessible</h2> <p>Handwriting does not need electricity, devices, batteries, software, subscriptions, a fast internet connection, a keyboard, charging time or the many other things on which digital writing depends.</p> <p>It only needs pen and paper. And can be done anywhere.</p> <p>Sometimes handwriting is the easiest and best option. For example, when writing a birthday card, filling in printed forms, or writing a quick note.</p> <h2>5. It’s about thinking</h2> <p>Most importantly, learning to write and learning to think are intimately connected. Ideas are <a href="https://warwick.ac.uk/fac/soc/ces/research/teachingandlearning/resactivities/subjects/literacy/handwriting/outputs/cambridge_article.pdf">formed as students write</a>. They are developed and organised as they are composed. Thinking is too important to be outsourced to bots!</p> <p>Teaching writing is about giving students a toolkit of multiple writing strategies to empower them to fulfil their potential as thoughtful, creative and capable communicators.</p> <p>Handwriting will remain an important component of this toolkit for the foreseeable future, despite the astonishing advances made with generative AI.</p> <p>Writing perfect cursive may become less important in the future. But students will still need to be able to write legibly and fluently in their education and in their broader lives.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/206939/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p> <p><a href="https://theconversation.com/profiles/lucinda-mcknight-324350">Lucinda McKnight</a>, Senior Lecturer in Pedagogy and Curriculum, <em><a href="https://theconversation.com/institutions/deakin-university-757">Deakin University</a></em> and <a href="https://theconversation.com/profiles/maria-nicholas-1443112">Maria Nicholas</a>, Senior Lecturer in Language and Literacy Education, <em><a href="https://theconversation.com/institutions/deakin-university-757">Deakin University</a></em></p> <p><em>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/5-reasons-kids-still-need-to-learn-handwriting-no-ai-has-not-made-it-redundant-206939">original article</a>.</em></p> <p><em>Images: Getty</em></p>

Caring

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The controversial change coming to Woolworths that will change the way you shop

<p>Woolworths’ top boss has promised no jobs will be lost despite its warehouse switching to using high-tech robots to help pack customers’ online shopping.</p> <p>The supermarket giant will soon unveil the first of its automated “micro-fulfilment” centres located in Carrum Downs Melbourne, in the hopes that will keep up with the increasing online demand due to the COVID-19 pandemic.</p> <p>The new location is smaller than the average size distribution centres and are either held alongside or in the back of docks of existing Woolworths stores.</p> <p>But despite the upgrade in technology, Chief Executive of Woolworths Brad Banducci said ten times more people will be employed in a decade at Woolworths stores than they are now.</p> <p>“I think our business will have more people in it that it does now. Where they work and what they do will change, and that’s just the way the world is.” he told The Sydney Morning Herald.</p> <p>“We’d love to provide a bit more service in our stores, a bit more meal inspiration … we’re not lacking things we want to do, but we have to find very smart ways to do them given the nature of the world we live in.”</p> <p>“It will change the shape of the business, no question.”</p> <p>The news comes after it was revealed 1,350 Woolworths workers would be made redundant at three NSW distribution centres due to automated technology.</p>

News

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I'm terrified of retirement

<p><em><strong>Megan Giles is a retirement designer for women. She supports and coaches women approaching retirement to successfully transition and create a lifestyle that is fulfilling, meaningful to them and lights them up each day.</strong></em></p> <p><em>Anne* is looking forward to retirement – the ability to do what she wants when she wants and to operate at a less frenetic pace. She has many things on her bucket list and wonders how she is going to fit everything in. But interestingly, despite everything there is to look forward to, there is one thing that terrifies Anne. What is she going to do without work? She is a successful director of a small not-for-profit, loves her job and in particular watching her team members develop and flourish. To her, her team feels like family. Anne is single and has always worked. She doesn’t have children and so never took maternity leave. For her entire adult life work has been a core focus.</em></p> <p>Are you feeling like Anne? Perhaps you too are single, or the main breadwinner in your family and the longest break you’ve taken since university or school is a four-week holiday using all of your annual leave at once. Unsurprisingly you may be feeling a sense of anxiety about letting go of work. Work provides structure, it forms part of our identity, and it helps to create a sense of purpose as others depend on us for decisions, results and input. We might love the thought of never having to answer another urgent late night call or work through the weekend, but with work comes invites to coffee, requests to draw on your expertise and a family who asks how your weekend was each Monday morning. What happens when this is taken away?</p> <p>Anne hasn’t retired yet but there are two key actions she has taken to help ensure the transition is successful.</p> <p><em>Anne has met with a financial advisor to clearly understand her financial position and the retirement lifestyle options that are possible for her. She has also booked 10 weeks of long service leave to ‘practice’ retirement and find out what life without work might be like (without any financial pressure).</em></p> <p>If you are feeling nervous about stepping into retirement, you might like to follow Anne’s lead and ‘try out’ retirement. The following provides three suggestions for testing the water and finding a retirement rhythm that is meaningful to you and gets you out of bed each morning!</p> <p><strong>1. If you are entitled to long-service leave, take it!</strong></p> <p>You may be thinking about banking your longer service leave and receiving a substantial payout when you do retire, but what about if you could use that time as an opportunity to ‘test run’ retirement. If you do decide to do this, do some planning before your leave starts to ensure you get the most out of the time. You may like to book a holiday, sign up for a new activity and simply potter around the home. What would it feel like if you could go to the gym three mornings a week, look after your grandchild one day per week, and volunteer one afternoon per week? Would that be enough for you – would it create the sense of fulfilment that you are seeking or might you need to keep refining your plan?</p> <p><strong>2. Learn from others’ experiences.</strong></p> <p>Talk to others who have retired and ask them some questions. For example what they enjoy most about retirement, the challenges they encountered (perhaps that they did not expect) and the one thing they would do differently? This may allay some of your fears and provide some tips to help make your journey a little smoother.</p> <p><strong>3. Consider a step-down approach.</strong></p> <p>Rather than go ‘cold turkey’ and launch straight from full-time work to retirement, especially if work has been all-consuming for you, explore the options available in your organisation to reduce the number of days you work per week. Is it possible to work only two or three days per week and balance the structure of work with time to focus on developing new interests and establish a social network outside of your job?</p> <p>Not everyone will love their work but everyone should love their retirement – what are you doing to help ensure that your transition is a successful one?</p> <p><em>For more great retirement advice please visit Megan Giles’ <span style="text-decoration: underline;"><strong><a href="http://www.megangiles.com/" target="_blank">website</a></strong></span>.</em></p> <p><em>*Name has been changed.</em></p> <p><strong>Related links:</strong></p> <p><a href="http://www.oversixty.com.au/lifestyle/retirement-life/2016/08/tips-to-help-your-marriage-survive-retirement/"><strong><em><span style="text-decoration: underline;">Can your marriage survive retirement?</span></em></strong></a></p> <p><a href="http://www.oversixty.com.au/lifestyle/retirement-life/2016/07/is-happiness-really-what-we-are-after-in-retirement/"><strong><em><span style="text-decoration: underline;">Is happiness really what we’re after in retirement?</span></em></strong></a></p> <p><a href="http://www.oversixty.com.au/lifestyle/retirement-life/2016/08/tips-for-a-happy-and-healthy-retirement-on-a-budget/"><strong><em><span style="text-decoration: underline;">Tips for a happy and healthy retirement on a budget</span></em></strong></a></p>

Retirement Life

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Tips for coping with redundancy when you’re 60-plus

<p>Redundancy is a real concern for people of any age bracket, but when you’re over 60 it can feel especially scary.</p> <p>For many people, the sudden trauma of having no money coming in can see them make some quick decisions that aren’t in their best interest.</p> <p>The best thing to do is in fact to wait it out before you make any big moves such as selling your car or moving house. If you have received a payout it can be tempting to spend up, or pay off debts, but in fact it’s best to wait and see that you can line up another revenue source first.</p> <p>At the same time you don’t want to ignore what is going on. If you have mortgage payments coming up for instance, now is the time to talk to your bank about what is going on. They can be very helpful if you give them all the facts.</p> <p>Check your super fund as some of them have life and sickness insurance or income protection insurance.</p> <p>There’s no need to feel too embarrassed to claim benefits from Centrelink. The funds are there to help get you through this tough time so it is worth finding out what you are entitled to. </p> <p>Be sure to ask your accountant about any tax implications as there are special exemptions for those who have been made redundant.</p> <p>Create a budget and stick with it while you plan your next move. Cut out any spending that is not essential, and be sure to remember to include regular bill payments such as health insurance or electricity.</p> <p>Now is your chance to decide what you really want to do. Use this time as an opportunity to determine if you want to find a new career path or continue down the same route.</p> <p><strong>Related links:</strong></p> <p><span style="text-decoration: underline;"><strong><em><a href="http://www.oversixty.co.nz/lifestyle/retirement-life/2015/12/how-to-mentally-prepare-yourself-for-retirement/">8 steps to mentally prepare yourself for retirement</a></em></strong></span></p> <p><span style="text-decoration: underline;"><strong><em><a href="http://www.oversixty.co.nz/lifestyle/retirement-life/2015/12/reasons-to-volunteer-in-retirement/">5 reasons to volunteer in retirement</a></em></strong></span></p> <p><span style="text-decoration: underline;"><strong><em><a href="http://www.oversixty.co.nz/lifestyle/retirement-life/2016/01/what-you-must-do-before-retirement/">The one thing you must do before retirement</a></em></strong></span></p>

Retirement Life

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Tax legislation unfairly targets seniors

<p>An online petition has exposed legislation unfairly targeting seniors.</p> <p>The petition was started by Linda Aldridge, who had been affected by the legislation. Linda had been made redundant at her workplace, but because she was just over 65 years of age when this happened she was taxed highly on her severance payment.</p> <p>The difference was startling, and had Linda been made redundant a mere eight months earlier she would have been $14,000 better off. Linda has been on ABC Radio and contacted the Treasurer of Australia and her local Member of Parliament.</p> <p>The latter, the Hon Alan Tudge Federal Member for Aston, Assistant Minister to the Prime Minister and Assistant Minister for Social Services wrote, “I have taken on board your comments and will take this into consideration when this issue arises in Parliament.”</p> <p>Linda notes that she still wants to work, but $14,000 is a lot of money. “I still have a Mortgage and have had to cancel my health fund. There has been a drive to keep older people in the work force but to lose thousands of dollars as a penalty for being over 65 is wrong,” she said.</p> <p>At time of publishing Linda was close to her target of 25,000 signatures.</p> <p>To view her online petition, <a href="https://www.change.org/p/federal-government-taxation-on-redundancy-payment-for-seniors?recruiter=306657321&amp;utm_source=share_petition&amp;utm_medium=copylink" target="_blank"><span style="text-decoration: underline;"><strong>click here</strong></span></a>.</p> <p><strong>Related links:</strong></p> <p><a href="/finance/money/2015/10/how-weak-aussie-dollar-affects-investments/"><span style="text-decoration: underline;"><em><strong>How will the weak Aussie dollar affect your finances</strong></em></span></a></p> <p><a href="/finance/money/2015/11/is-australia-becoming-cashless/"><span style="text-decoration: underline;"><em><strong>Will Australia become a cashless society?</strong></em></span></a></p> <p><a href="/finance/money/2015/11/how-to-build-a-food-bank/"><span style="text-decoration: underline;"><em><strong>6 ways a food bank will help you save money on groceries</strong></em></span></a></p>

News

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A guide to voluntary redundancy

<p>Have you been offered voluntary redundancy but are unsure whether to take it? It’s a tough decision and one not to be taken lightly. Here’s some things to consider.</p><p>The offer of voluntary redundancy can be enticing, especially when you’ve been working at the company for a number of years and are looking to retire. A large sum of money and the prospect of a hard-earned break is music to many people’s ears, but it’s not always the best way forward.</p><p>When is it a good idea to take the money and go? What if you don’t find work again? Or, are you looking to retire and a lump sum payment is the sweetener to doing it sooner? There are also a few considerations to factor in when looking at the lump sum payment, such as take-home amount, type of payment and after-tax amount.</p><p>Wealth management firm BT Financial Group said people looking to take a voluntary redundancy should ask themselves these questions.</p><p><strong>How much will I get in my hand?</strong></p><p>Start by setting up a table or if you’re a whiz with Microsoft Excel, a spreadsheet, comprising of four columns with sub-titles: type of payment, before tax amount, tax taken out and after tax amount. You can then take a look at the section down the bottom called, Types of redundancy payments and tax treatment, to get a clearer idea of the different payments you may receive and the tax involved with each.</p><p><strong>How long will it take me to find another job?</strong></p><p>If you’re not ready to retire, ask yourself the time it may take to find a new job. There’s also the consideration that while laws forbid it, age discrimination still exists. Unfortunately, it may take you a little longer to secure a job you want if you’re over 60.</p><p><strong>Do I want a change of career?</strong> &nbsp;</p><p>If you have already decided your current career path has come to an end, a voluntary redundancy may provide a golden opportunity to keep an income while training and breaking into a new career.</p><p><strong>Am I ready to start looking for another job?</strong></p><p>The thought of not having to set the alarm and face the traffic is very appealing when you’re working. Once you have slept on it for a week or two, however, you start to think about the things you miss about working, such as the interaction with different people, the satisfaction of having a purpose and the fact that you don’t have to hunt for another job. Make sure you’re ready to dust off the resume, brush up on your interview skills, let the world know you’re looking for your next opportunity and get the skills and qualifications you need to land your dream job.</p><p><strong>Am I financially ready to retire?</strong></p><p>If you’re thinking about retiring, add your total assets, including the amount you’ve worked out in your spreadsheet, your super and any investments. Divide that number by 20 and that will give you the amount you can expect to receive as retirement income (assuming a 5 per cent income return). Be mindful that if you were born after 1952, you will not qualify for a Centrelink age pension until at least six months after you turn 65. Those born after 1957 won’t qualify until you reach 67. It’s a good idea to speak to a financial adviser at this point to maximise your Centrelink age pension, minimise your tax and get the right investment mix for you.</p><p><strong>Types of redundancy payments and tax treatment</strong></p><p><strong>Genuine redundancy payment:</strong> This is your redundancy payment if you’re under 65, which usually includes a base amount and an amount for each year of service. When it comes to tax, the first $9,246 plus an additional $4,624 for each completed year of service is tax free, the remainder is taxed as an eligible termination payment.</p><p><strong>Eligible termination payment:</strong> This payment is above the tax free amount if you’re under 65 and your entire payment if you’re over 65. For tax, if you’re under 55 the amount under $180,000 is taxed at a maximum rate of 30 per cent and any amount over that is taxed at 45 per cent. If you’re 55 or older, the amount up to $180,000 is taxed at a maximum rate of 15% and the balance is taxed at 45 per cent.</p><p><strong>Accrued annual leave or sick leave:</strong> This is leave pay that you’ve earned but haven’t taken. It’s taxed at a maximum rate of 30 per cent.</p><p><strong>Accrued long-service leave:</strong> This is long-service leave that you’ve earned but have not taken. Generally, this is paid if you have more than five years’ service. In regards to tax, if you started your current job after 1978 the maximum tax rate is 30 per cent.</p><p><strong>What should I do with my redundancy payment?</strong></p><p>If you do decide to take the voluntary redundancy, there’s a few sensible options of where you could put it.</p><p>1. Set up a bank account that will pay you the same way as you’re paid now. If you’re paid monthly, set up a monthly payment into your day to day bank account equal to your after-tax monthly salary.</p><p>2. Use any money you don’t need for the next six months to pay off as much of your home loan as possible so you can afford to live on a lower salary if necessary.</p><p>3. If you’ve decided to retire and are over 60, set aside enough income for the next two months and put the rest into your super fund. Once the money is in super, start an account based pension and use it to pay yourself an income. It may pay to hire a financial planner at this point to help you through this process.</p>

Money & Banking

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A guide to voluntary redundancy

<p>Have you been offered voluntary redundancy but are unsure whether to take it? It’s a tough decision and one not to be taken lightly. Here’s some things to consider.</p><p>The offer of voluntary redundancy can be enticing, especially when you’ve been working at the company for a number of years and are looking to retire. A large sum of money and the prospect of a hard-earned break is music to many people’s ears, but it’s not always the best way forward.</p><p>When is it a good idea to take the money and go? What if you don’t find work again? Or, are you looking to retire and a lump sum payment is the sweetener to doing it sooner? There are also a few considerations to factor in when looking at the lump sum payment, such as take-home amount, type of payment and after-tax amount.</p><p>Wealth management firm BT Financial Group said people looking to take a voluntary redundancy should ask themselves these questions.</p><p><strong>How much will I get in my hand?</strong></p><p>Start by setting up a table or if you’re a whiz with Microsoft Excel, a spreadsheet, comprising of four columns with sub-titles: type of payment, before tax amount, tax taken out and after tax amount. You can then take a look at the section down the bottom called, Types of redundancy payments and tax treatment, to get a clearer idea of the different payments you may receive and the tax involved with each.</p><p><strong>How long will it take me to find another job?</strong></p><p>If you’re not ready to retire, ask yourself the time it may take to find a new job. There’s also the consideration that while laws forbid it, age discrimination still exists. Unfortunately, it may take you a little longer to secure a job you want if you’re over 60.</p><p><strong>Do I want a change of career?</strong> &nbsp;</p><p>If you have already decided your current career path has come to an end, a voluntary redundancy may provide a golden opportunity to keep an income while training and breaking into a new career.</p><p><strong>Am I ready to start looking for another job?</strong></p><p>The thought of not having to set the alarm and face the traffic is very appealing when you’re working. Once you have slept on it for a week or two, however, you start to think about the things you miss about working, such as the interaction with different people, the satisfaction of having a purpose and the fact that you don’t have to hunt for another job. Make sure you’re ready to dust off the resume, brush up on your interview skills, let the world know you’re looking for your next opportunity and get the skills and qualifications you need to land your dream job.</p><p><strong>Am I financially ready to retire?</strong></p><p>If you’re thinking about retiring, add your total assets, including the amount you’ve worked out in your spreadsheet, your super and any investments. Divide that number by 20 and that will give you the amount you can expect to receive as retirement income (assuming a 5 per cent income return). Be mindful that if you were born after 1952, you will not qualify for a Centrelink age pension until at least six months after you turn 65. Those born after 1957 won’t qualify until you reach 67. It’s a good idea to speak to a financial adviser at this point to maximise your Centrelink age pension, minimise your tax and get the right investment mix for you.</p><p><strong>Types of redundancy payments and tax treatment</strong></p><p><strong>Genuine redundancy payment:</strong> This is your redundancy payment if you’re under 65, which usually includes a base amount and an amount for each year of service. When it comes to tax, the first $9,246 plus an additional $4,624 for each completed year of service is tax free, the remainder is taxed as an eligible termination payment.</p><p><strong>Eligible termination payment:</strong> This payment is above the tax free amount if you’re under 65 and your entire payment if you’re over 65. For tax, if you’re under 55 the amount under $180,000 is taxed at a maximum rate of 30 per cent and any amount over that is taxed at 45 per cent. If you’re 55 or older, the amount up to $180,000 is taxed at a maximum rate of 15% and the balance is taxed at 45 per cent.</p><p><strong>Accrued annual leave or sick leave:</strong> This is leave pay that you’ve earned but haven’t taken. It’s taxed at a maximum rate of 30 per cent.</p><p><strong>Accrued long-service leave:</strong> This is long-service leave that you’ve earned but have not taken. Generally, this is paid if you have more than five years’ service. In regards to tax, if you started your current job after 1978 the maximum tax rate is 30 per cent.</p><p><strong>What should I do with my redundancy payment?</strong></p><p>If you do decide to take the voluntary redundancy, there’s a few sensible options of where you could put it.</p><p>1. Set up a bank account that will pay you the same way as you’re paid now. If you’re paid monthly, set up a monthly payment into your day to day bank account equal to your after-tax monthly salary.</p><p>2. Use any money you don’t need for the next six months to pay off as much of your home loan as possible so you can afford to live on a lower salary if necessary.</p><p>3. If you’ve decided to retire and are over 60, set aside enough income for the next two months and put the rest into your super fund. Once the money is in super, start an account based pension and use it to pay yourself an income. It may pay to hire a financial planner at this point to help you through this process.</p>

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