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Living with a sudden drop in income

Losing a job or having your income cut can be stressful. You might feel panicked but don’t worry. The key to managing your money is to take steps to adjust to your new income as soon as possible.

 Here are some simple steps to keep on top of things.

Make a budget and money management plan 

Take the time to make a budget and money management plan that looks at the money you have coming in and going out. Now that your income has reduced, the quicker you adjust what is possible to adjust, the less debt you will have to deal with later. You can use our My Budget tool to help you look at income and outgoings, or if you have debts, use our My Full Financial Picture tool to include everyone you owe money to.   

Set your priorities  

You’ll need to make sure you can pay the most important debts first. This can be hard, but a good starting point is to list your bills and any debts you have into: 

  • Priority debts (for example rent, mortgage, and electricity) 
  • Secondary debts (credit card, personal unsecured loans).  

Read more on how to prioritise your debts and deal with any urgent bills first. For example, if someone is threatening to repossess your home, disconnect your electricity or repossess your car, you will have to act quickly and reach a repayment arrangement. 

Boost your income 

We sometimes get into debt because we are not receiving all the money we are entitled to. Here are some areas that might increase your income. 

Social welfare  

Check that you are getting all your entitlements. You can get information on social welfare from Citizens Information or from the Department of Social Protection. 

You can apply for a supplementary welfare payment if you’re unable to cover your living costs and meet certain conditions. Contact the Department of Social Protection’s representative at your local office. (Formerly known as the Community Welfare Officer) 

Back to work schemes can help you return to work. Find information on the different schemes from Citizens Information.

Tax 

You may be eligible for tax credits or a rebate. Contact Revenue to check your entitlements. 

You can earn tax-free income by renting a room in your home. Find more information on the Revenue website, but also check if there are any consequences if you are claiming a welfare payment. 

Employment 

There are laws on wages, dismissal, equality and redundancy which could mean you’re owed money by your employer or previous employerContact Citizens Information to check your entitlements. 

Some large employers have schemes to help employees (or past employees) who are having financial difficulty. There may also be local community or voluntary groups who can help you during this time.  

Check your insurances 

Ask your lender whether your mortgage, loan or credit card is covered by insurance. You may get an insurance pay-out if you’ve been paying: 

  • Payment protection insurance 
  • Mortgage payment protection insurance 
  • Short-term income protection insurance 

Cut back your costs and spending 

With your budget in front of you, do the following: 

  • Look at bills that could be reduced such as electricity. Visit the Sustainable Energy Authority of Ireland for advice on how to lower your bill. 
  • Use a price comparison website to find a better deal on your household bills. 
  • Look at spending on entertainment. Even if you decide to cut back here, try and leave room for a social life for you and your family. 
  • See if you can lower your spending on groceries, housekeeping and clothing (without cutting back too severely). 
  • Decide how much you need to save for dealing with unexpected costs, for example, repairs on your home and to put by for irregular costs like back to school, Christmas or a family event. 

Get debts under control 

Read our information on how to tackle debts.  

Contact MABS for help 

If you’re struggling to manage your money or to make ends meet, or you feel like borrowing more is the only solution, help is available, contact MABS.

Find out more: 

Visit CCPC’s Money Hub for comprehensive information about personal finance topics. 

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