Can I collect unemployment if I get a severance package from my employer?

Yes, you can typically collect unemployment even with severance, but there are some important rules. In NY, severance payments don't automatically disqualify you from UI benefits. However, if the severance is paid out as salary continuation (like weekly paychecks), it might delay your benefits until those payments end. If it's a lump sum, it usually won't affect your weekly benefit amount. You should definitely file your claim right away when you're laid off, even if you're getting severance.

i got severance last year and still got unemployment no problem... but mine was a lump sum payment not spread out over time

The key distinction NYS Department of Labor makes is whether the severance is considered 'wages in lieu of notice' or a true severance payment. If your employer is paying you for a specific notice period and expects you to not work elsewhere during that time, it's treated like continued employment. But if it's just compensation for your years of service with no work restrictions, you can usually collect UI immediately. Make sure to ask HR exactly how they're structuring the payment when you talk to them.

ugh this whole system is so confusing!! why can't they just make it simple - if you lose your job you should get benefits period

I had a similar situation last year but couldn't get through to anyone at NYS Department of Labor to get a clear answer about my specific case. Ended up using this service called Claimyr (claimyr.com) that actually got me connected to a real person at the unemployment office. They have a video demo at https://youtu.be/qyftW-mnTNI showing how it works. Was way easier than sitting on hold for hours just to get disconnected. The agent was able to look at my case and tell me exactly when my benefits would start based on my severance terms.

Whatever you do, make sure you report the severance income accurately when you file your weekly claims. I know someone who didn't report theirs properly and ended up with an overpayment notice months later that they had to pay back with interest.

This is such valuable information, thank you everyone! I'm in a similar boat - got notice that my position is being eliminated in a few weeks. The timing aspect seems really crucial here. @Maya Patel, have you had a chance to speak with HR yet about how they're structuring the severance? I'm curious what you find out since it sounds like our situations are pretty similar. Also planning to file my claim immediately when the layoff happens regardless of the severance situation, just to get the process started.

Just wanted to add that timing of when you actually receive the severance payments can also matter. I had a friend who negotiated with their employer to delay the start of severance payments by a few weeks so they could collect unemployment immediately after being laid off. Not all companies will agree to this, but it's worth asking about if you have some negotiating room. Also, keep all your severance paperwork - the unemployment office will likely want to see the exact terms and payment schedule when you file your claim.

Just went through this exact situation 3 months ago in NY. My advice is to also check if your employer is requiring you to sign a non-compete or any kind of agreement that restricts you from working elsewhere during the severance period. If they are, that could complicate your unemployment eligibility since you'd technically be "unavailable for work" which is one of the requirements for UI benefits. In my case, the severance had no work restrictions so I was able to collect immediately even though it was paid out over 6 weeks. Also, when you file your weekly certifications, there's a specific question about severance pay - just answer honestly about what you received that week and let the system calculate any reductions. The DOL website has a severance calculator tool that's pretty helpful for estimating how it might affect your weekly benefit amount.

One thing I want to emphasize that hasn't been mentioned yet - make sure you understand exactly when your employment officially ends vs when severance payments begin. Sometimes there's a gap between your last day of work and when severance kicks in, and you can usually start collecting unemployment immediately after your employment ends, even if severance hasn't started yet. Also, if your company offers you the option to take severance as a lump sum vs spread out payments, the lump sum is almost always better for unemployment purposes since it won't interfere with your weekly benefits. I learned this the hard way when I took the payment plan option and had my benefits delayed for months. Document everything and don't be afraid to call the DOL multiple times if you get conflicting information - different representatives sometimes give different answers unfortunately.

This thread has been incredibly informative! I'm facing a potential layoff situation too and had no idea about the complexity around severance and unemployment benefits. The distinction between "wages in lieu of notice" vs actual severance payments seems crucial - that could completely change the timeline for when benefits kick in. @Maya Patel I hope you get clear answers from HR about how they're structuring your severance. It might be worth asking them to put their response in writing so you have documentation for the DOL. Also planning to bookmark that Claimyr service that @Layla Mendes mentioned since getting through to the unemployment office seems to be such a challenge. Has anyone else here used similar services to actually speak with a representative? The idea of sitting on hold for hours just to get disconnected sounds like a nightmare when you're already dealing with job loss stress.

This has been such an eye-opening discussion! I'm currently employed but my company has been dropping hints about "restructuring" so I'm trying to get ahead of this. The advice about asking HR to clarify whether severance is "wages in lieu of notice" vs. actual severance is brilliant - I never would have known to make that distinction. Also really appreciate the tip about negotiating the timing of severance payments if possible. One question for those who've been through this - when you filed your unemployment claim, did you mention the upcoming severance payments upfront, or did you just report them when they actually started? I'm wondering if being proactive about disclosure helps or if it just complicates things. The DOL severance calculator mentioned by @AstroAce sounds like a great tool to model different scenarios before making any decisions about lump sum vs. payment plan options.

This thread has been a goldmine of information! I'm actually going through a similar situation right now - just got word that my department is being eliminated next month. Reading through everyone's experiences has really helped me understand what questions I need to ask HR. The biggest takeaway for me is that the devil is really in the details with how the severance is structured and paid out. I'm definitely going to ask specifically about the "wages in lieu of notice" vs true severance distinction that @Ava Kim mentioned, and whether there are any work restrictions during the severance period like @AstroAce warned about. Also planning to inquire about lump sum vs payment plan options since it sounds like that could make a huge difference for unemployment eligibility. One thing I'm curious about - has anyone here had experience with severance that includes benefits continuation (like health insurance) and how that might interact with unemployment benefits? My company mentioned something about COBRA but I'm not sure if that affects the unemployment calculation at all.

This conversation has been incredibly helpful for understanding the severance/unemployment intersection! I'm in a similar position where layoffs are happening at my company soon. One thing I wanted to add that I learned from a coworker who went through this - make sure you also ask HR about any accrued vacation or PTO payouts and how those are treated. In some cases, unused vacation time paid out as a lump sum is treated differently than severance for unemployment purposes. Also, if anyone is considering taking a voluntary severance package (if that's an option), the timing of when you actually separate from employment can be really important. My understanding is that voluntary separation might have different implications than being laid off, so it's worth confirming that you'd still be eligible for unemployment benefits. The complexity of all these rules really makes me appreciate communities like this where people share their real experiences!

This has been such an educational thread! I'm actually dealing with a similar situation - just learned my position might be eliminated in the next few weeks as part of a company restructuring. Reading through everyone's experiences has given me a much clearer roadmap for the conversations I need to have with HR. The key questions seem to be: 1) Is it "wages in lieu of notice" or true severance? 2) Any work restrictions during the severance period? 3) Lump sum vs payment plan options? 4) How vacation/PTO payouts are handled separately? I'm planning to document everything and file for unemployment immediately when the separation happens, regardless of severance timing. One additional thing I'm wondering about - has anyone dealt with severance packages that have clawback provisions if you find new employment quickly? I'm curious if that impacts unemployment eligibility or if you're still free to job search normally while receiving both severance and UI benefits.

This thread has been incredibly valuable! I'm actually facing a potential layoff situation myself in the coming weeks, and reading through everyone's experiences has given me so much clarity on what to expect. The distinction between "wages in lieu of notice" vs true severance payments seems absolutely critical - that could completely change when benefits start. I'm also going to make sure to ask about any work restrictions in the severance agreement since that "available for work" requirement is so important for UI eligibility. One thing I'm curious about that hasn't been mentioned yet - has anyone dealt with severance packages that require you to sign a release of claims or non-disclosure agreement? I'm wondering if those types of legal requirements could impact unemployment benefits in any way, or if they're completely separate issues. Planning to file my claim immediately when the separation happens and document everything along the way. Thanks to everyone who shared their experiences - this community is such a lifesaver when navigating these stressful situations!

Wow, this thread has been incredibly thorough and helpful! I'm also potentially facing a layoff situation in the next month or two, and reading through everyone's experiences has been like getting a masterclass in severance and unemployment benefits. The key takeaways I'm getting are: 1) Ask HR specifically about "wages in lieu of notice" vs true severance, 2) Check for any work restrictions during severance period, 3) Consider lump sum vs payment plan implications, 4) File unemployment claim immediately regardless of severance timing, and 5) Document absolutely everything. One aspect I haven't seen discussed yet is whether the size of your severance package affects your unemployment benefit amount at all. I know the weekly benefit calculation is based on your previous earnings, but I'm wondering if getting a large severance somehow impacts that calculation or if it's completely separate. Also planning to look into that Claimyr service mentioned by @Layla Mendes since it sounds like getting through to an actual person at the DOL is nearly impossible through normal channels. This community is such a valuable resource - thank you to everyone who shared their real-world experiences!