How will coronavirus affect employment?
A long period of low unemployment has left many Australians unprepared for a period of reduced income.
As social distancing, work from home and potentially lockdowns affect Australia it’s likely that many people will not be able to work as usual or will receive a lower income.
In some cases, there may be redundancies followed by an extended period of being unable to find work.
The coronavirus is likely to have wide reaching and long lasting effects, it’s better to prepare now rather than get caught out.
Which income types are likely to be affected?
If you’re a salaried employee receiving a standard wage then unless there’s a significant problem it’s unlikely that your base income will be affected.
However, some income types are likely to be affected:
- Overtime may be reduced or not received at all.
- Commission income will be lower if salespeople cannot visit customers.
- Bonus income may not be received if staff are unable to hit targets.
- Casual jobs may have no shifts or significantly reduced hours.
- Contractors may face their contract not being renewed.
- Those with seasonal or temporary employment status.
What can you do to prepare?
You can prepare by:
- Talking to your employer about their plans and your role.
- Help your employer to plan for this crisis, if they’re successful then you will be too.
- Figuring out how to continue working/provide your services remotely.
- Agreeing with many staff for everyone to have reduced hours rather than one person to lose their job.
- Consolidate your debts into your home loan.
- Cut/reduce unnecessary expenses.
- Look for additional sources of income.
- Create an emergency fund.
There is likely to be plenty of work to be done, however, it may be in a different sector or location to your normal employment.
Talking openly with your employer
If your employer is unable to continue doing business then they may let go staff.
The best thing to do in these situations is to have an open discussion with your employer and other employees and consider all options:
- Staff taking unpaid leave
- All staff taking a salary cut
- Staff reducing their hours
- Some staff selecting themselves for redundancy
One or more of these options may help you to reduce the impact of this crisis on your coworkers.
Refinancing to create an emergency fund
The best insurance in a crisis is cash in the bank. As we can’t change the past, you may need to consider options such as selling assets.
We’ve written a blog post on refinancing to create an emergency fund. The key is to act now as there is likely to be significant challenges to refinancing later.
This is particularly true for people with irregular incomes as banks rely on your two most recent payslips, and the income shown on them when assessing your application. There are also significant differences in the way that each lender assess irregular income types with some looking at recent income and others looking at a trend over time or previous financial years.
Email your Home Loan Experts mortgage broker, call us at 1300 889 743 or fill in our free assessment form if you’d like our assistance. Our team is working from home for their safety but will be working overtime to assist our clients.
Facing significant financial trouble
We’ve written a blog post on financial hardship due to the coronavirus that may be able to help.
Stay safe! Act now!
Unfortunately the Australian government has been slow to take the health impacts of the coronavirus seriously. Just because they haven’t acted, doesn’t mean that you don’t have to.
Social distancing is the most effective way to slow the spread of the virus. Our team is now working from home and where possible you should discuss with your employer and do the same.
Your employer has a legal obligation to provide a safe place of work and if need be you should remind them of this and take any action necessary to force them to take the coronavirus threat seriously.