Will my severance package disqualify me from EDD benefits in 2025?

Severance pay absolutely affects your unemployment benefits in California. You need to report it when you file your initial claim. The EDD will likely consider your severance as wages for the period it covers (8 weeks in your case), which means you may not be eligible to receive unemployment benefits until after that period ends. However, you should still apply immediately! Don't wait until your severance runs out to start the claim process. The EDD will determine when your benefits can begin after reviewing all your information.

The rules on this keep chnaging!! I went thru this in 2023 and my severance DID count against my benefits. But then my friend just went thru it 3 months ago and EDD told her severance is NOT considered wages anymore! So much conflicting info out there. When you apply make sure to answer everything 100% accurately about the severance on your application... they might ask u if its a continuation of wages or a lump sum, that matters.

when i got laid off i just waited till my severance ran out to apply cuz i didnt want the hassle

I went through this exact situation in January. Here's what happens: Your severance will be allocated over the period it covers (8 weeks in your case). During that time, you'll be considered "employed" for unemployment purposes. You should apply immediately, but understand that your claim will likely be approved with benefits beginning after the severance period ends. You'll still need to certify every two weeks during this period, reporting your severance income. On the certification form where it asks if you received other income, select "yes" and choose "severance" from the dropdown. Enter the amount for that certification period. You'll likely be found ineligible for those weeks, but once your severance period ends, your benefits should begin automatically if you keep certifying. Don't wait to apply - get your claim established now so there's no gap between your severance ending and benefits beginning.

EDD IS TERRIBLE!!! They counted my severance against me and it took FOREVER to actually get benefits. Applied in February and didn't see a single dollar until MAY even though my severance only covered 4 weeks!!! The system is broken!

I think there's some confusion in this thread about how severance works with EDD. Severance is considered WAGES by EDD if it's a continuation of your regular pay. If it's a lump sum payment for signing a release/settlement, it might not affect your benefits the same way. It really depends on how your employer classified and reported it. From my understanding (and I went through this in 2024), here's what happens: 1. Apply immediately after separation 2. Report your severance payment fully 3. If your severance is considered wages, EDD will determine you're not unemployed until that period ends 4. Keep certifying every two weeks, reporting any income 5. Once your severance period ends, you'll start receiving benefits if you continue to certify The most important thing is to be 100% honest about everything. If you try to game the system by not reporting severance, you could end up with an overpayment notice and penalties down the road when they catch it (and they usually do).

lol at everyone trying to sound like experts here... the truth is EDD changes their rules all the time and nobody really knows for sure. when i applied the lady on the phone told me one thing then the decision was something else entirely 🤷‍♂️

Thank you everyone for the helpful advice! Just to update - I went ahead and applied today, reported my severance payment, and got a confirmation number. The online system asked me specifically about severance and I disclosed the full amount. Now I just wait for them to process my application and will keep certifying every two weeks as advised. I'll update this thread once I find out exactly how they handled my situation in case it helps someone else in the future.

Smart move applying right away and being upfront about the severance! I went through something similar last year and the key thing is that EDD will send you a determination letter explaining exactly how they're handling your severance - whether it's considered wages that delay your benefits or if there are any other factors they're considering. Make sure to keep all your paperwork from your employer about the severance package, especially anything that shows whether it's continuation of wages vs. a lump sum settlement. The waiting is the hardest part, but you're doing everything right by staying transparent and keeping up with certifications. Looking forward to your update!

One thing I'll add that might help - when you get your determination letter from EDD, pay close attention to the "benefit year" dates they establish. Even though your severance might delay when you can start collecting benefits, your benefit year clock starts ticking from when you first file the claim. This is important because you only have one year to collect all your eligible benefits. So filing early (like you did) protects you from losing potential weeks of benefits at the end of your benefit year. Also, if you have any questions about their determination, you have the right to appeal within 30 days of receiving the letter. Good luck with everything!

Just wanted to share my recent experience since it's so relevant to your situation! I was laid off in December 2024 with a 6-week severance package and went through this exact process. Like everyone advised, I applied immediately and reported my severance honestly. EDD sent me a determination letter about 3 weeks later explaining that my severance counted as wages for the 6-week period, so I wouldn't receive benefits until after that period ended. I kept certifying every two weeks during the severance period (marking "yes" for other income and selecting severance), and sure enough, as soon as my severance period ended, my benefits kicked in automatically. The whole process was actually smoother than I expected once I understood what to expect. The key really is applying right away and being completely transparent about everything. You're definitely on the right track!