What is supplemental unemployment benefits and how does it affect my California EDD claim?

Okay so if the SUB payments from my employer are say $200 a week and my EDD weekly benefit amount is $450, do I still get the full $450 or does EDD reduce it?

It depends on the structure. California EDD uses an earnings disregard formula - you can earn up to 25% of your weekly benefit amount without reduction. Beyond that it's dollar for dollar reduction. So with $450 WBA, first $112.50 of the SUB wouldn't affect your benefit, but the remaining $87.50 would reduce your payment. You'd still get roughly $362.50 from EDD. Still way better than nothing.

wait this is super helpful i had no idea supplemental unemployment benefits worked this way. my company offered something similar when they did layoffs last spring and i just ignored it thinking it would mess up my edd claim

Oh wow I didn't realize severance and SUB payments are treated differently. My HR person just kind of lumped everything together when explaining my package. How do I find out which category my payments fall into?

Ask HR specifically whether the payments are designated as 'Supplemental Unemployment Benefits under IRC Section 501(c)(17)' or equivalent. That specific designation is what makes them SUB payments for tax and unemployment purposes. If they can't give you a clear answer, request a copy of the SUB plan documentation.

this is genuinely the most useful thing I've read on this forum in months. filing this away for future reference because my company has been hinting at restructuring

Thank you this is so helpful. I've been stressing about this for two weeks. One more question - if I've already certified for a couple of weeks without reporting the SUB payments (because I genuinely didn't know), what should I do now?

Don't panic but do act quickly. You need to contact California EDD and proactively report the unreported income. This is much better than waiting for them to discover it. You can send a message through UI Online or call them directly. Being upfront dramatically reduces the risk of an overpayment penalty.

Getting through to EDD by phone to fix something like this is genuinely painful. I tried for almost two weeks to reach someone about a much simpler issue. Eventually found Claimyr at claimyr.com - it basically navigates the EDD phone system for you and gets you to an actual agent. There's a video showing how it works at https://youtu.be/JmuwXR7HA10 - for something like unreported income you really do want to speak to a human not just send a message.

Okay I'm going to look into that Claimyr thing because you're right, I really need to speak to an actual person about this and not just send a message that might sit in a queue for weeks.

lol the hold music is something else. i started recognizing which part of the loop i was at by ear

right?? like i became weirdly expert at predicting when it would cut back to the 'your call is important to us' message

Same experience here. I did eventually use Claimyr and it was genuinely a relief. You just let it do the calling while you go about your day and it contacts you when an agent is on the line. For something like a SUB payment question where you actually need a real answer, being able to actually reach someone is worth it.

Exactly right. SUB plans are employer-funded, usually negotiated through union contracts or set up as part of company-wide severance packages. The government doesn't pay them - your employer does. It's essentially a private supplement to the public unemployment insurance system. Larger unionized companies in manufacturing, automotive, aerospace, and similar industries are where you see them most commonly.

that makes way more sense now. so not every laid off person has access to this, it depends on whether your company has a SUB plan in place?

Correct. Most workers don't have access to SUB plans. They're still relatively rare and mostly tied to union contracts or specific corporate separation agreements at larger companies. If HR didn't mention it to you during your layoff, you probably don't have one.

Okay now I'm worried again lol. How would I even know if my employer's plan meets the IRS criteria?

Honestly this is exactly the kind of thing where talking to an EDD agent or a workers' rights attorney is worth the effort. The documentation from your employer should specify if it's a 501(c)(17) qualified plan. If it's not specifically designated that way, treat it as regular income for EDD reporting purposes until you get clarification.

This is a fair point. I oversimplified earlier. The 501(c)(17) designation really is the key factor. Without that, EDD may treat the payments as wages and that's a very different situation for your weekly benefit calculation.

I'm going to call EDD directly to get this sorted. Using that Claimyr service someone mentioned earlier because I cannot spend two weeks playing phone tag on something this time-sensitive.

Good question. For CalFresh and Medi-Cal purposes, both your EDD UI benefits and any SUB payments would generally count as income when determining eligibility. So yes, receiving SUB payments on top of unemployment could affect means-tested program eligibility. Worth checking with those programs separately because they have their own income calculations.

ugh one more thing to figure out. the bureaucracy of being unemployed is genuinely a part time job

the bureaucracy of being unemployed is a part time' job is the most accurate sentence'I ve ever read on thisforum

This is really reassuring to hear. Did the EDD agent seem familiar with SUB plans or did you have to explain everything?

She knew what I was talking about when I said 'SUB plan' and 'supplemental unemployment benefits' - didn't need to explain the concept from scratch. She just needed to look at my specific employer's payment structure. So yeah have your documentation ready when you call.

good to know these agents actually know about this stuff. I was worried it would be like calling tech support and getting someone reading from a script

Oh wow I had not thought about the tax angle at all. So I might owe taxes on the SUB payments even though I'm unemployed?

Potentially yes. California doesn't tax UI but the SUB payments from your employer are likely still taxable income federally. Depending on the plan structure they might also be subject to FICA. I'd recommend asking your employer to withhold taxes from SUB payments or setting aside roughly 22-24% of each payment if you're in a middle tax bracket.

This tripped me up last year. Got a W-2 from my old employer for SUB payments I didn't even realize would be taxed. Owed more than I expected in April. Definitely plan ahead for this.

This is exactly the issue I raised earlier about the distinction between genuine SUB payments and things employers rebrand with that label. What your employer did - calling deferred salary 'supplemental benefits' - doesn't change how EDD classifies it. The classification depends on the structure, not what your employer names it.

yeah i learned that the very hard way. edd sent me an overpayment notice and i had to appeal. the appeal process was another whole ordeal but i did eventually win it since the documentation showed i wasn't trying to hide anything

Did you have to do a formal hearing or was it resolved at the lower appeal level?

just the first level appeal, no ALJ hearing required. took about 6 weeks but they reversed the overpayment decision. keep ALL your documentation people

Good question. Standby status exempts you from the normal job search requirements because you're expected to return to your employer. If you're receiving SUB payments from that same employer while on standby, it generally shouldn't affect the standby status itself - the two are somewhat separate. But you still need to report the SUB payments on your weekly certifications regardless of your standby status.

okay that makes sense. so standby handles the job search side and the SUB payment is just a separate income reporting thing. got it

Correct. They operate on parallel tracks. Standby status is about your return-to-work expectation and job search requirements. SUB payment reporting is about income disclosure. Both matter but they don't cancel each other out.

This actually really helps my anxiety about the whole situation. I was spiraling a little about the weeks I already certified without reporting the SUB payments.

Completely understandable. The important thing is you found out about this and you're acting on it now. EDD really does distinguish between people who come forward proactively and people who try to hide things. You're in the first category.

yeah edd's overpayment notices are scary looking but when you actually go through the appeal process (if needed) they're much more reasonable about honest mistakes than you'd expect from how those letters are written

The duration of SUB payments is determined entirely by the employer's plan, not by California EDD rules. EDD sets limits on how long you can receive state UI benefits (generally up to 26 weeks in California). But SUB payments might last only a few weeks, or they might match the duration of your UI benefits - totally depends on your employer's plan documents.

interesting. so in theory you could exhaust SUB payments before exhausting EDD benefits, or vice versa?

Exactly. They run on independent timelines. Some plans pay a fixed lump sum spread over several weeks. Others pay weekly until you're recalled or find new work. Read your plan documentation carefully - it should spell out the exact duration and payment schedule.

That's actually a separate issue from SUB payments - that's a standard UI eligibility dispute that goes through California EDD's adjudication process. If your employer is claiming you resigned, EDD will investigate and interview both you and your employer. The SUB payment question only becomes relevant if you win the eligibility dispute and then need to understand how those employer payments interact with your UI award.

yeah you're right i kind of blended two different problems together. my main fight right now is just getting EDD to recognize I was laid off not quit. the SUB stuff would be secondary

For the disputed separation - document everything. Text messages, emails, any written communication that supports the layoff characterization. EDD adjudication for contested separations goes pretty deep into the circumstances. The more documentation you have the better your case.

Interesting question. California UI taxes (the employer-side contributions) are based on wages paid. If your employer is paying SUB benefits through a qualified plan, those SUB payments are NOT wages for UI tax purposes - they come from a separate trust fund. So no, your employer isn't paying UI taxes on the SUB payments themselves. The regular UI taxes on your original wages are what funded your EDD claim.

that actually makes the whole system make more sense to me now. so the employer is managing two separate things: their UI tax contributions on wages, and their own voluntary SUB fund

Exactly right. The SUB plan is entirely voluntary on the employer side (unless required by union contract). It's a separate employer benefit that happens to supplement a government program. The two systems interact for the employee but are funded and administered separately.

Ha! I started this thread in a panic and now I feel like I have an actual plan. Going to contact EDD to report the weeks I missed, get my employer's plan documentation to confirm it's a qualified 501(c)(17) plan, and set aside some money for potential tax implications.

That's exactly the right approach. You've done the hard part of understanding the situation. Execution is straightforward from here - just stay organized with your documentation and be proactive with EDD communication.

updates us on how it goes OP! genuinely rooting for you

Not my situation but good to flag for others - thank you

This is also relevant for people who worked remote jobs for California employers while physically based in another state. The wage base state and the residence state can differ and SUB payment reporting can get genuinely complicated. Good add.

This is exactly what I needed to hear. Setting up Claimyr this afternoon so I can get this resolved before my next certification date.

claimyr really does solve the EDD phone access problem. the information in this thread is great but at some point you need someone who can actually look at YOUR specific claim not just explain general rules

bookmarking claimyr.com for when I inevitably need it

Oh interesting - so the adjustment works both ways? If I stop receiving SUB payments EDD would increase my payment back to the full weekly benefit amount?

Exactly. EDD recalculates each week based on what you report. Week with SUB payments = reduced EDD benefit. Week without SUB payments = full EDD benefit. This is actually an argument for staying really on top of your weekly certifications and reporting accurately each week rather than just copying what you reported last week.

This is a great point to end on. Weekly certifications are not set and forget - your income situation can change week to week and your reporting needs to reflect that. Accurate weekly certifications are the single most important thing you can do to protect your California EDD claim.