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Ben Cooper

Can I get unemployment benefits if I received severance pay in Washington?

I was laid off from my job three weeks ago and received a severance package worth about $8,000. Now I'm wondering if I can still file for unemployment benefits with Washington ESD or if the severance disqualifies me? I've heard conflicting information and want to make sure I don't mess anything up. The severance is supposed to last me about 2 months but I'm worried it might not be enough if I can't find work quickly.

You can absolutely file for unemployment even with severance pay! Washington ESD treats severance differently than regular wages. The key is HOW the severance is paid out. If it's a lump sum, it typically won't delay your benefits. If it's paid out over time like regular paychecks, that's when it might affect your weekly benefit amount.

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It was paid as a lump sum, so that sounds promising. Do I need to report it when I file my initial claim?

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Yes, definitely report it on your application. Washington ESD needs to know about all income, but lump sum severance usually doesn't count against your weekly benefits.

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I got severance last year and had no issues getting UI benefits. The important thing is to be honest about everything when you file. Washington ESD will figure out how it affects your claim during the adjudication process.

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How long did your adjudication take? I'm hoping to get benefits started soon since bills are piling up.

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Mine took about 3 weeks, but I had other complications. Yours might be faster since severance is pretty straightforward.

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Just went through this exact situation! I couldn't get through to Washington ESD on the phone for weeks to ask about my severance. Finally found claimyr.com and they got me connected to an actual agent in like 20 minutes. The agent explained everything about how severance works with UI benefits. Totally worth it if you need to talk to someone quickly. They have a video demo at https://youtu.be/7DieNd3C7zQ that shows how it works.

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Never heard of Claimyr before but that sounds useful. Washington ESD's phone system is absolutely terrible.

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Thanks for the tip! I might need to use that if I run into issues with my claim.

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The timing of your severance matters too. If you received it before your last day of work, it might be considered wages and could delay your benefits. If you got it after your employment ended, it's typically treated as severance and won't affect your weekly claim.

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I got it on my last day along with my final paycheck. Does that complicate things?

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It shouldn't be a problem if it was clearly marked as severance separate from your regular wages. Washington ESD is pretty good about distinguishing between the two.

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ugh the whole severance thing is so confusing!! I'm dealing with this right now too and can't figure out what to put on my weekly claims. Do I report the severance every week or just once?

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You only report it once, when you first file your claim. Don't report it on your weekly claims unless you're getting ongoing severance payments.

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oh thank god, I was about to report it every week and probably mess everything up

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I had a similar situation but my severance was paid out over 6 months like regular paychecks. That DID affect my unemployment because Washington ESD counted it as ongoing wages. You're lucky yours was a lump sum!

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That makes sense. I guess the lump sum is better for unemployment purposes even though it would have been nice to have steady income for longer.

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Exactly! I had to wait until my severance payments ended before I could get full UI benefits. Your situation is much better.

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File ASAP even with the severance! There's a waiting period anyway and you want to get the process started. The worst thing that happens is they adjust your benefits if needed, but you won't lose anything by filing early.

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Good point about the waiting period. I'll file this weekend and get the ball rolling.

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Smart move. I waited too long to file after my layoff and regretted it. Start the process now.

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Washington ESD has gotten better about severance issues lately. Used to be they'd hold up claims for weeks trying to figure out how to handle it. Now they usually process them pretty quickly as long as you're upfront about everything.

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That's reassuring. I was worried about getting stuck in adjudication hell for months.

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Yeah, the horror stories you hear are usually from a few years ago. The system has improved quite a bit.

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just remember to keep looking for work even with the severance money! The job search requirements don't change just because you got severance. You still need to log your work search activities.

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Good reminder. I was planning to take a week off to decompress but I guess I should start job hunting right away.

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you can take a few days but yeah, start the job search soon. Washington ESD tracks that stuff pretty closely now

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I'm dealing with something similar but my company is calling it a 'retention bonus' instead of severance even though I was laid off. Anyone know if that matters for unemployment purposes?

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The name doesn't matter as much as the nature of the payment. If you were laid off and received money as part of your separation, Washington ESD will likely treat it as severance regardless of what your employer calls it.

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That's what I was hoping. My employer is being weird about the whole thing but I think they're just trying to make it sound better than a layoff.

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The Washington ESD handbook says severance payments 'generally do not affect eligibility for unemployment benefits' but they might affect the timing of when benefits start. It's all about whether it's considered deferred compensation or not.

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Where did you find that handbook? I'd like to read the exact wording myself.

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It's on the Washington ESD website under employer resources. The claimant handbook has similar language but less detailed.

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Washington ESD is SO much better than other states with this stuff. My friend in California had to wait 3 months because of severance issues. Here they just ask a few questions and move on.

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That's good to know. I was worried Washington would be just as complicated as everywhere else.

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Yeah Washington ESD is actually pretty reasonable about most things. The phone system sucks but the actual policies make sense.

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Pro tip: if your severance came with a non-compete agreement, that might affect your job search requirements. Make sure to mention that to Washington ESD if it limits what jobs you can apply for.

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Interesting point. I do have a non-compete but it's pretty narrow. I should probably mention it just to be safe.

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Better safe than sorry. Washington ESD can adjust your job search requirements if you have legitimate restrictions.

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I used Claimyr when I had questions about my severance and vacation payout. Really helped to talk to an actual person instead of trying to figure it out from the website. The agent walked me through exactly what to report and what not to worry about.

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How much did that cost? I'm trying to be careful with money right now.

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Honestly don't remember the exact cost but it was worth every penny to get clear answers. Way cheaper than making a mistake on my claim.

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Filed my claim with severance last month and got approved within a week. The key is being completely honest about everything. Don't try to hide the severance or downplay it - just report it accurately and let Washington ESD sort it out.

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That's exactly what I was planning to do. Honesty seems like the best policy with these government agencies.

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Absolutely. They're going to find out anyway, so might as well be upfront from the start.

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One thing to watch out for - if you're getting COBRA or health insurance continuation through your severance package, make sure you understand how that affects your benefits. It usually doesn't matter for UI but it's good to know.

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Good point. My severance did include COBRA coverage for 3 months. I'll make sure to mention that too.

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Yeah just be thorough in your reporting. Washington ESD would rather have too much information than too little.

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update us on how it goes! I'm sure there are other people in similar situations who would benefit from hearing about your experience with Washington ESD and severance.

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Will do! I'm planning to file this weekend so I should have an update in a week or two.

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Yes please update! I might be in the same boat soon and would love to hear how it works out.

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Just wanted to add that vacation payout is treated the same as severance usually. If you got both, report both but don't stress about it. Washington ESD handles this stuff all the time.

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I did get vacation payout too, about $1,500. Good to know I should report that as well.

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Yep, report everything. They'd rather have complete information upfront than discover it later during an audit or something.

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Last thought - if you end up needing to talk to Washington ESD about your severance and can't get through on the phone, that Claimyr service someone mentioned earlier actually works. I was skeptical at first but they got me through to an agent when I'd been trying for days on my own.

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Good to have that as a backup option. Hopefully I won't need it but it's reassuring to know it exists.

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Exactly. Sometimes you just need to talk to a human to get clarity on these things, and Claimyr makes that possible when the regular phone system fails you.

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