Laid off with severance offer - Can I collect EDD unemployment while receiving severance?
So my tech company just went through another round of layoffs (thanks economy 🙄) and they're offering me a 6-week severance package. I've never been in this situation before and I'm totally confused about how this works with EDD unemployment benefits. Can I apply for unemployment while receiving severance? Do I have to wait until the severance period ends? Does the severance amount affect my weekly benefit amount? I need to make a decision about the severance offer by next Friday and I'm trying to budget how much income I'll actually have. Anyone navigate this severance/unemployment combo successfully?
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Jamal Carter
I went through this last year. You CAN apply for unemployment immediately after your last day of work, but you have to report the severance pay when you certify. The severance will delay when your benefits start but won't disqualify you completely. On your certification, EDD will ask if you received any income, and you'll need to report the severance in the week you receive it (not when it was earned). Your UI benefits will be reduced or eliminated for those weeks depending on the amount. After your severance period ends, you'll get your regular UI amount. Make sure you clarify with your employer exactly WHEN the severance will be paid - lump sum or spread out - as that affects how you report it.
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Zoe Alexopoulos
•Thank you! So if I take the lump sum option they're offering (vs. bi-weekly payments over 6 weeks), does that mean I'd just report it all in one week and potentially get UI the very next week? That seems almost too good to be true compared to having benefits delayed for all 6 weeks.
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Mei Liu
When i got layed off i got a sevrence but didnt tell EDD about it and still got my full benifits. They never found out and it was fine. just saying
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Jamal Carter
•This is terrible advice. EDD regularly cross-references with tax records and employer reporting. When (not if) they discover unreported income, you'll face an overpayment notice plus penalties, and potentially fraud charges. Not worth risking your financial future over.
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Liam O'Donnell
I AM GOING THROUGH THIS RIGHT NOW and EDD is a NIGHTMARE!!!! I reported my severance honestly when I certified and they completely STOPPED my benefits for 6 weeks even though my severance was only for 4 weeks of pay!! Now I'm calling them DAILY trying to get this fixed and CAN'T GET THROUGH!! The system is BROKEN and punishes people for being honest. Should've just taken the money and not said anything like everyone else does.
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Amara Nwosu
•Have you tried using Claimyr to get through to an EDD rep? I was in the same frustrating situation last month - calling for hours and never getting past the recording. I used claimyr.com and they got me connected to an actual EDD agent in about 20 minutes. They have a video showing how it works: https://youtu.be/JmuwXR7HA10?si=TSwYbu_GOwYzt9km. Totally worth it - the agent fixed my severance reporting issue right on the call.
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AstroExplorer
There's a specific way severance impacts UI benefits in California: 1. Severance is considered "wages in lieu of notice" by EDD 2. You must report it during certification for the week(s) you receive payment 3. If your severance exceeds your weekly benefit amount, you'll receive $0 for that week 4. If it's less than your weekly benefit, you'll receive a partial payment 5. This does NOT reduce your total benefit amount - just delays when you can access it Make sure your severance letter clearly specifies the payment is severance/wages in lieu of notice, not vacation payout or something else, as different types of final pay are treated differently by EDD.
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Zoe Alexopoulos
•This is really helpful, thank you! The HR paperwork says "severance pay in lieu of notice" so I think I'm good there. Do you know if I need to have the actual official termination letter from HR before I can file with EDD, or can I apply as soon as my last day happens?
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Giovanni Moretti
my cousin got laid off from Amazon and had the same thing happen. u def need to apply for ui right away don't wait! the severance gets reported but when his ran out the ui kicked in automatically. the system knows when ur eligible cuz they see the reported earnings each week. he said make sure u certify every 2 weeks even if ur getting $0 otherwise ur claim can get messed up.
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Fatima Al-Farsi
•Yes! This is the part people miss - you MUST continue certifying every two weeks even when receiving $0 due to severance. If you stop certifying, your claim can go inactive and cause all kinds of problems. Keep certifying and reporting income accurately.
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Mei Liu
wait does this apply to bonuses too?? I got a retention bonus when my company was going under but I was still laid off lol
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Jamal Carter
•Yes, bonuses need to be reported too. Any income received during the weeks you're certifying for unemployment needs to be reported. The type of income (bonus, severance, part-time work, etc.) matters for how EDD calculates its impact, but all income must be reported.
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Zoe Alexopoulos
OK so based on everyone's advice, it sounds like I should: 1. Take the severance package (duh) 2. File for unemployment immediately after my last day 3. Report the severance honestly when certifying 4. Keep certifying EVERY week even if I'm getting $0 during the severance period 5. Once severance runs out, benefits should kick in automatically as long as I've kept certifying Does that sound right? Thank you all for the help - this has been so confusing!
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AstroExplorer
•That's exactly right. And remember that you certify every two weeks, not weekly. The only thing I'd add is to make sure you're fulfilling all work search requirements during this time too - EDD can check this later. You need to be documenting at least 3 job search activities per week, even during weeks when your benefits are $0 due to severance reporting.
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