Made Redundant in NZ: A Financial Survival Plan for 2026

Made redundant in NZ? A clear plan for what to do first: entitlements, Jobseeker Support and stand-downs, pausing or withdrawing KiwiSaver, what happens to your insurance, and protecting your mortgage without panic decisions.

Redundancy rarely arrives on your timetable. One week you have a salary and a routine, the next you are working out how long your savings will last and what to tell the bank. The good news is that the financial side is mostly a sequence of clear steps, not a single overwhelming problem. Done in the right order, those steps buy you time.

This guide sets out a plain redundancy financial plan for NZ: what to sort first, the entitlements and benefits to check, how to handle your KiwiSaver and insurance, and how to protect your mortgage without a panic decision you later regret.

TL;DR: There is no statutory minimum redundancy pay in NZ, so what you get depends on your employment agreement ¹. Jobseeker Support is the main benefit; the net rate for a single person 25+ with no children was $353.46 a week as at 14 February 2025, with a short stand-down for genuine redundancy ²³. You can pause KiwiSaver after 12 months ⁴.

What is the first thing to do financially after a redundancy?

The first few days matter more for your nerves than your numbers. Before anything else, slow down. Most decisions that go wrong after a job loss are made in the first week, out of fear, when there was no need to rush.

A useful way to frame the first month is as a short sequence rather than one big scramble. The figure below sets out a money plan for the first 30 days.

Redundancy money plan: first 30 days

The single most useful first move is to get your final pay confirmed in writing, including any notice, redundancy compensation, and the value of unused annual leave. Until you know that number, every other plan is guesswork.

What redundancy pay and entitlements should you expect in NZ?

This surprises a lot of people: there is no statutory minimum redundancy pay in New Zealand. Redundancy compensation and notice are only payable if they are written into your individual or collective employment agreement. If the agreement is silent on redundancy, no redundancy pay is legally required ¹.

So the honest answer to "how much will I get" is: it depends on your contract. Some agreements set out generous formulas; others say nothing at all. The figure is $0 as a legal floor ¹, which is why reading your own agreement is step one.

Whatever your agreement says, you are still owed the basics that apply to any job ending:

• Your final wages or salary up to your last day.
• Payment for any annual leave you have accrued but not taken.
• Any notice period your agreement specifies, either worked or paid out.
• Any redundancy compensation your agreement provides, if it provides any.

People often weigh up at this point whether a redundancy lump sum changes their tax position for the year, and how it sits alongside a benefit application. These depend on your circumstances, so it is worth checking the detail rather than assuming.

Can you claim a benefit, and which one?

For most people who lose a job and are available for and looking for work, the main benefit is Jobseeker Support through Work and Income ². It is income-tested, so what you receive depends on your situation and any other income in the household.

As a reference point, the maximum net (after-tax) weekly rate for a single person aged 25 or over with no children was $353.46 a week for the period 1 April 2024 to 31 March 2025, which was the rate in force on 14 February 2025 ². Rates are reviewed each 1 April, so check the current figure on the Work and Income website before you rely on it.

One detail that catches people out is the stand-down period before payments start. Work and Income applies a stand-down based on why your job ended:

The practical takeaway is that a genuine redundancy usually carries only a short stand-down, while resigning or accepting a voluntary exit can attract a much longer one of up to 13 weeks ³. That distinction can be worth thousands, so understand how it applies before you sign anything. Apply early either way, because the stand-down clock only starts once your application is in.

Should you pause KiwiSaver contributions or withdraw on hardship?

When money is tight, KiwiSaver is one of the few levers you can pull yourself. There are two different tools here, and they are not the same thing.

The lighter-touch option is a savings suspension. Once you have been a KiwiSaver member for at least 12 months, you can pause your own employee contributions for between 3 months and 1 year, and renew it ⁴. While suspended, you stop contributing and your employer is not required to contribute either ⁴. That frees up cash flow quickly if you return to work and find your contributions are squeezing the budget.

There is a real trade-off, though. If you stop contributing you also stop earning the government contribution. As at 14 February 2025 the maximum annual government contribution was $521.43, paid as 50 cents for every $1 on the first $1,042.86 of your own contributions each KiwiSaver year (1 July to 30 June) ⁶. (This was halved to $260.72 from 1 July 2025, so check the current figure.) Pausing during a long gap can mean missing some or all of that top-up.

The heavier option is a significant financial hardship withdrawal. This is allowed only in limited circumstances and must be approved by your scheme's supervisor; you have to provide evidence, and your government contributions cannot be withdrawn ⁵. It is generally a last resort rather than a first response to a redundancy.

For most people, a savings suspension is the proportionate move while between jobs, and a hardship withdrawal is something to consider only if the gap is long and other options are exhausted. We cover the mechanics in our guides on a KiwiSaver savings suspension and a KiwiSaver hardship withdrawal.

For when you are back at work: the minimum KiwiSaver contribution rate as at 14 February 2025 was 3% for the employee and 3% (compulsory) for the employer ⁷. (Budget 2025 later raised these minimums to 3.5% from 1 April 2026 and 4% from 1 April 2028.)

What happens to income protection and other insurance if you lose your job?

This is one of the most common misunderstandings, and getting it wrong can leave a real gap. Income protection insurance does not usually cover redundancy. It generally pays a monthly benefit if illness or injury stops you working, not if you lose your job through redundancy, unless you specifically bought a redundancy cover option ⁸.

It helps to be clear about what each safety net is actually for:

ACC is for injury, not unemployment. It only covers loss of earnings caused by accidental injury and pays weekly compensation at up to 80% of pre-injury earnings ⁸. It will not help with a redundancy.

What you can do straight away is check what you actually hold, and confirm whether any redundancy benefit exists. Where money is tight, some people look at whether to keep paying life or health premiums during a gap. That is a genuine balancing act: cancelling cover saves a little now but can be costly to replace later, especially if your health has changed, because re-applying usually means fresh underwriting. Whether a claim is paid depends on the terms, conditions, exclusions, stand-down periods and underwriting of the specific policy, and on your disclosure. This is a summary only, so always read the policy wording.

How do you protect your mortgage and avoid panic decisions?

For most households the mortgage is the largest fixed cost, so it is where a job loss bites hardest, and where panic does the most damage. The key thing to know is that you can ask for help early.

If you cannot keep up your mortgage after losing your job, lenders must consider hardship. Under the Credit Contracts and Consumer Finance Act (CCCFA) you can apply to your lender for a hardship variation, for example reduced payments, an interest-only period, or extending the loan term, if you reasonably expect to keep up payments under the new arrangement ⁹. Make that call before you fall into arrears, not after.

A few principles tend to keep people on steadier ground:

• Contact the bank early, while you are still up to date, and put any agreement in writing.
• Cut variable spending first, before touching long-term assets or cover.
• Avoid locking in losses by selling investments in a hurry; if you can ride out a gap, you usually keep more.
• Be wary of high-cost short-term borrowing to fill a gap, which can deepen the hole.

We do not provide advice on mortgages or lending. This is general information only, so for the specifics of a hardship variation talk to your lender or an appropriately authorised professional.

How long should your emergency fund last, and how do you stretch it?

An emergency fund is simply money set aside that you can reach quickly. A common guideline used in NZ financial guidance is to hold about 3 months of essential living expenses, and longer if your income is less secure, kept accessible so it can cover costs while you look for new work ¹⁰.

"Essential" is the operative word. The number that matters in a redundancy is not your old salary but your real monthly survival cost: housing, food, power, insurance, minimum debt payments, transport. Strip out the discretionary spending and the figure you must cover is often lower than feared, so your buffer stretches further than you thought.

A simple way to stretch a fund is to separate costs into three buckets and act on them in order: fixed essentials you must pay, variable costs you can trim, and nice-to-haves you can pause. Combine that with the entitlements above, and a three-month buffer can often cover a longer search than its raw size suggests. If your buffer is thin, this is where the trade-off between a savings buffer and income protection becomes real, which we work through in income protection versus a savings buffer.

When does it pay to get financial advice during a job loss?

Not every step here needs an adviser. A lot of it is admin you can do yourself: confirming your payout, applying for Jobseeker Support, asking your bank about hardship.

Before paying for anything, know that free help exists. MoneyTalks is a free, confidential, government-funded helpline and budgeting service for people facing job loss or money trouble, on 0800 345 123 ¹¹. For many people, that is the right first call.

Personalised advice tends to earn its keep when the moving parts start to interact: a redundancy lump sum alongside a benefit application, pausing KiwiSaver while protecting the government contribution, and whether to keep or pause insurance during a gap. Those are the points where a joined-up plan helps and general information stops being enough. Our guide on when to see a financial adviser sets out how to decide.

Frequently asked questions

Is there a minimum redundancy payment in New Zealand? No. There is no statutory minimum redundancy pay in New Zealand. Redundancy compensation and notice are only payable if they are written into your employment agreement; if the agreement is silent, none is legally required ¹.

How much is Jobseeker Support, and when does it start? The maximum net rate for a single person aged 25 or over with no children was $353.46 a week as at 14 February 2025, reviewed each 1 April ². A genuine redundancy usually carries a stand-down of about 1 to 2 weeks before payments begin, while leaving voluntarily can attract up to 13 weeks ³. Check current figures with Work and Income.

Should I pause my KiwiSaver after redundancy? You can take a savings suspension for between 3 months and 1 year once you have been a member for at least 12 months, which frees up cash flow ⁴. The trade-off is that you stop earning the government contribution while paused ⁶. Whether that suits you depends on your situation, so consider advice tailored to your circumstances.

Does income protection cover redundancy? Usually not. Income protection generally pays only if illness or injury stops you working, not if you are made redundant, unless a specific redundancy cover option was added ⁸. ACC covers injury, not unemployment ⁸. Always read your policy wording.

Can my bank help if I cannot pay my mortgage? Yes. Under the CCCFA you can apply to your lender for a hardship variation, such as reduced payments, an interest-only period, or a longer loan term, if you reasonably expect to keep up payments under the new arrangement ⁹. Contact the bank early, before you fall into arrears.

Where can I get free help? MoneyTalks is a free, confidential, government-funded helpline and budgeting service on 0800 345 123 ¹¹. It is a good first call before paying for advice.

Facing redundancy? Book a free 30-minute review and get a clear plan from Smiths Financial. Book a review

This article is general information only and is not personalised financial advice. It does not take into account your particular financial situation, goals or needs. Before acting, consider whether it's right for you and seek advice tailored to your circumstances. Craig Smith Business Services Ltd (FSP712931), trading as Smiths Financial, holds a Class 2 licence issued by the Financial Markets Authority to provide financial advice and is a member of the Financial Dispute Resolution Service (FDRS). Smiths Financial does not provide advice on mortgages or lending. KiwiSaver government contributions, contribution rates and rules are set by the Government and can change; figures are correct as at 14 February 2025. Written by Henry Smith, Financial Adviser; reviewed by Craig Smith, Principal Adviser. Last reviewed 14 February 2025.