EDD claim with pending severance package - how to report severance when using a lawyer?
Just lost my job yesterday due to 'role elimination' (fancy corporate talk for layoff). I'm planning to apply for EDD benefits ASAP, but there's a complication - I have a lawyer negotiating my severance package, so I don't know the final amount yet. I know you're supposed to report severance pay when filing for unemployment, but how do I handle this when the amount is unknown? Should I just go ahead and file my claim without mentioning the potential severance? Will I need to report it later once the negotiations finish? Really confused about the timing here and don't want to mess up my claim by doing things in the wrong order. Any advice from people who've navigated this situation?
22 comments
Daniel White
You should absolutely file your claim immediately without waiting for the severance negotiations to conclude. EDD allows you to report income after the fact. When you file your initial claim, there's a question about severance - you can indicate that it's pending but amount unknown. Then once your severance is determined, you'll need to report it during your bi-weekly certifications for the weeks it covers. Remember that severance pay is considered wages and may affect your benefits for those specific weeks, depending on the amount and how it's structured.
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Abigail Patel
•Thank you! So when I'm doing the initial application, I should mention that severance is coming but amount unknown? I was worried they might hold up my whole claim while waiting for that information.
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Nolan Carter
happened to me last yr, just FILE NOW don't wait!!! my severence took 3 MONTHS to negotiate and edd woulda denied me if I waited. u can update later
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Natalia Stone
•This is kinda confusing...so if you get severance later do you have to pay EDD back? Or do they just reduce your weekly amount during the severance period?
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Tasia Synder
Here's what you need to know about severance and EDD claims: 1. File your claim immediately after separation - don't wait for severance negotiations to complete 2. On your application, indicate that severance is pending/in negotiation 3. When you receive your severance, you must report it during your bi-weekly certification for the period it covers 4. Severance is typically allocated to specific weeks (usually right after termination) 5. For those specific weeks, your UI benefits may be reduced or eliminated depending on the severance amount The key is understanding how EDD treats severance - they allocate it to specific weeks following your termination date. Your benefits will only be affected during those weeks, not your entire claim. So if you get 8 weeks of severance, that might delay your actual benefits for 8 weeks, but doesn't impact your overall claim eligibility or benefit year.
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Abigail Patel
•Thank you for such a detailed breakdown! So it sounds like the severance will basically just push back when I start receiving benefits rather than affecting my total benefit amount? My lawyer thinks negotiations could take 4-6 weeks - is there anything specific I need to tell EDD during that waiting period when I'm certifying but don't have the severance info yet?
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Selena Bautista
I went through something similar in january. filed for EDD right away but my severance took forever bc of legal stuff too. I couldn't reach anyone at EDD to ask questions and kept getting anxiety about doing it wrong. Finally found this service called Claimyr (claimyr.com) that got me connected to an EDD rep in like 20 mins when i'd been trying for days. They have a video showing how it works: https://youtu.be/JmuwXR7HA10?si=TSwYbu_GOwYzt9km The rep confirmed I should keep certifying normally and just report the severance during the weeks it covered once I knew the amount. Saved me so much stress!
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Abigail Patel
•That's really helpful, I might check that service out if I run into issues. Did you have any problems with your claim being put on hold while your severance was pending? That's my biggest worry right now.
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Selena Bautista
•Nope, my claim wasn't held up at all! The EDD rep I spoke with through Claimyr explained that for reporting purposes, they only care about when the severance payment is actually received. So your claim processing shouldn't be delayed just because severance is in negotiation.
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Mohamed Anderson
wait hang on im CONFUSED...isnt severence different from unemploymnet? why would u need to report it? i got laidoff last year and got both...nobody told me they were related???? now im worried i did something wrong lol
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Tasia Synder
•Yes, they are different, but EDD considers severance pay as wages allocated to specific weeks after your termination. You're required to report this income during certification because it can affect your eligibility for benefits during those specific weeks. If you didn't report your severance when you received it, you might have an overpayment situation. I'd recommend contacting EDD to discuss your specific situation.
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Mohamed Anderson
•oh no...srsly?? nobody told me this when i got laid off! the HR lady just said "apply for unemployment right away" nothing about reporting the severence! am i gonna get in trouble now???
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Ellie Perry
THE SYSTEM IS DESIGNED TO TRIP YOU UP!!! I bet they're hoping you mess this up so they can deny your claim or hit you with an overpayment later. DOCUMENT EVERYTHING. Screenshot every page of your application. Save emails. Record phone calls (California is a two-party consent state so tell them you're recording). EDD will use ANY EXCUSE to deny benefits or create overpayments. When you do get your severance, make SURE you report it properly. I got hit with a $6,700 overpayment because I didn't understand how to correctly report my severance package.
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Daniel White
•While it's important to document your claim process, I think it's a bit extreme to suggest EDD is trying to trick people. The system is complex and sometimes confusing, but most issues stem from misunderstandings rather than deliberate attempts to deny benefits. That said, your advice about careful documentation is solid. And yes, properly reporting severance is crucial to avoid overpayment issues.
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Daniel White
To clarify about the severance allocation: EDD typically allocates severance to the period immediately following your termination. For example, if you receive 8 weeks of severance, EDD will allocate that as income for the first 8 weeks after your termination date. During those weeks, your UI benefits may be reduced or eliminated depending on the severance amount. For the original poster: When you certify bi-weekly, you'll need to report any income you received for the weeks you're certifying for. Until your severance is determined and paid, you wouldn't report it. Once you receive it, you'll need to report it for the appropriate weeks (which may require contacting EDD if those weeks have already been certified).
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Abigail Patel
•This is super helpful, thanks! So it sounds like I should: 1. Apply right away (which I'll do today) 2. Start certifying every two weeks as normal 3. Once my severance amount is finalized, contact EDD to report it for the appropriate weeks Does that sound right? And if the severance ends up being allocated to weeks I've already certified for, will I need to basically give back some of the UI benefits I received?
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Daniel White
•That's exactly right! And yes, if your severance is allocated to weeks you've already been paid benefits for, you may need to repay some benefits. EDD will calculate any overpayment and notify you. Don't worry too much though - this is a common situation and they have procedures for handling it. Just make sure to report the severance as soon as you know the amount and timeline.
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Natalia Stone
My company did mass layoffs in March this year and I had something similar happen with severance negotiations. I just checked the "severance pending" box when I applied and explained in the additional info section. Took almost 5 weeks to get the severance amount finalized, but my UI claim was processed normally. Then I just had to call EDD to report the severance once I got it. My benefits were reduced for the weeks the severance covered, but the claim itself stayed active.
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Abigail Patel
•That's exactly my situation! This is really reassuring to hear. I'm going to file today and just make sure I explain the pending severance situation clearly. Did you have to call them when your severance was finalized or could you report it online?
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Natalia Stone
•I had to call because by the time my severance was finalized, I'd already certified for some of those weeks. The online system doesn't have a great way to go back and modify previous certifications. The waiting time to talk to someone was ridiculous though - like 3+ hours.
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Nolan Carter
anyone else notice how EDD seems to have different rules depending on who u talk to?? my friend got told something completely diffrent about serverance pay!!
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Tasia Synder
•Unfortunately, this is a common issue. The regulations are complex, and not all representatives have the same level of training or experience. That's why it's so important to get information in writing whenever possible, and if something doesn't sound right, don't hesitate to call again and speak with a different representative for confirmation.
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