EDD deducted my severance pay from UI benefits - is this normal?
I was laid off from my tech job in February and have been receiving regular UI benefits since then without any issues. Last week, I finally got my severance package (about $4,300) that was promised in my termination agreement. When I certified for my UI benefits yesterday, I honestly reported the severance payment and checked the box for 'severance pay received' like we're supposed to. Today I checked my account and saw EDD only paid me for one week instead of both - they completely deducted the week when I got my severance! I'm confused because I've read multiple times on this forum that severance shouldn't affect unemployment benefits in California. Did EDD make a mistake? Has anyone else experienced this? I'm worried because I was counting on that money for rent next month.
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CosmicCruiser
Unfortunately, EDD does count severance pay as wages for the week it was paid. It's a common misconception that severance doesn't affect UI benefits. From the EDD website: 'Severance pay is reportable when received and may reduce UI benefits for that week.' Since your severance was likely more than your weekly benefit amount, they didn't pay you for that week. The good news is you didn't lose that week of eligibility - it just gets pushed to the end of your benefit year.
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Mateo Hernandez
•Wait seriously?? I swear I read multiple posts here saying severance doesn't count against UI in California. This is so frustrating. So basically that week is just gone for me benefit-wise, even though the severance was for my 3 years at the company, not just for one week of work? Do I need to call them to explain this?
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Aisha Khan
same thing happened 2 me last month! my severance was $2800 and they skipped paying me for that week. its BS cuz severance is for your TIME AT THE COMPANY not for that specific week!!!
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Ethan Taylor
•You're both misunderstanding how EDD calculates this. It's not about what the severance *represents*, it's about when you *received* it. Any income received during a certification week must be reported and can reduce/eliminate benefits for that week. But like the previous commenter said, you don't lose the week permanently - it extends your claim by one week at the end.
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Yuki Ito
I think there's some confusion here about SEVERANCE vs. VACATION PAYOUT. Vacation/PTO payout doesn't affect UI, but severance definitely does. I learned this the hard way during my last layoff. The EDD handbook is really clear that severance is considered wages for the week received and can reduce or eliminate benefits for that week. You did the right thing by reporting it honestly though! Much better than having to deal with an overpayment notice later.
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Mateo Hernandez
•Ohhh, maybe that's what I was thinking of! I thought I read that severance doesn't count, but maybe those posts were actually about vacation payouts. That makes more sense now. Still disappointing, but at least I understand what happened.
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Carmen Lopez
This happened to me too. If you think about it, the logic kinda makes sense - you essentially got "paid" that week through your severance. What I did was call EDD to confirm this was correct (took me FOREVER to get through). They verified that yes, severance counts as income for the week received, and because my severance was more than my weekly benefit amount, I wasn't eligible for benefits that week. But i got my normal benefits the next week.
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Mateo Hernandez
•How did you manage to get through to EDD? I've tried calling multiple times and keep getting the 'we're experiencing high call volume' message before it hangs up on me. Did you just keep calling over and over?
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Carmen Lopez
•Honestly I got lucky after trying for 3 days straight. But my cousin used this service called Claimyr (claimyr.com) that gets you through to EDD much faster. They have a video showing how it works: https://youtu.be/JmuwXR7HA10?si=TSwYbu_GOwYzt9km. Saved him hours of frustration when he had an issue with his certification. Might be worth checking out if you still want to confirm with EDD directly.
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Ethan Taylor
To clarify for everyone in this thread: 1. Severance pay IS reportable to EDD and DOES affect your benefits for the week it was received 2. Vacation/PTO payouts are NOT deducted from your UI benefits (this changed in 2014) 3. You did the right thing by reporting your severance honestly 4. The week isn't "lost" - it extends your benefit year by one week 5. Some employers spread severance over multiple weeks instead of a lump sum, which can actually help in some cases For future reference, here's what counts as income for UI purposes: wages, severance, holiday pay, worker's comp, sick pay, in-lieu-of-notice pay, bonus, and commission. What DOESN'T count: vacation/PTO payout, pension, jury duty pay, disability insurance benefits, and supplemental unemployment benefits.
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Mateo Hernandez
•Thank you for this clear explanation! I wish the EDD website made this distinction more obvious. I appreciate you taking the time to spell it all out.
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Andre Dupont
everyone here is talking about policy but WHAT ABOUT THE FACT THAT THEY PAID YOU THE NEXT DAY???? i certified on sunday and don't get paid until wednesday at the earliest. sometimes thursday. how did you get paid the very next day???
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Mateo Hernandez
•I have direct deposit set up with Bank of America. I usually certify Sunday night and see the deposit Tuesday morning. This time I certified Monday morning and saw it Tuesday. Maybe it depends on your bank?
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Andre Dupont
•i have direct deposit too but never that fast. lucky you i guess!
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QuantumQuasar
lol u all making me nervous now...i just got laid off and getting severance next month but split into 3 payments. does that mean ill lose 3 weeks of UI???? thats like $1200!
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CosmicCruiser
•It depends on the amount of each payment. If your severance payments are less than your weekly benefit amount, you'll get partial UI benefits for those weeks. If they're more than your weekly benefit amount, then yes, you won't receive UI for those three weeks. But remember, those weeks get added to the end of your benefit year - you don't lose them completely.
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