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Makayla Shoemaker

Can you collect severance and unemployment at the same time in Washington ESD?

My company just laid me off after 8 years and I'm getting a severance package worth about $12,000 paid out over 6 months. I want to file for unemployment benefits through Washington ESD but I'm confused about whether I can collect both at the same time. Does the severance count as wages that would disqualify me? I've been looking at the Washington ESD website but the information isn't super clear about how they handle severance payments.

The answer depends on how your severance is structured. If it's paid as a lump sum or as continuation of wages, Washington ESD might consider it as earnings that could affect your weekly benefit amount. You need to report all income including severance when you file your weekly claims.

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It's being paid out monthly over 6 months, not a lump sum. Does that make a difference?

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Yes, that matters. Monthly payments are typically treated as income during the weeks they're received, which could reduce your weekly benefit amount or make you ineligible for those weeks.

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I went through this exact situation last year. Washington ESD told me that severance doesn't automatically disqualify you but it gets deducted from your weekly benefit amount. So if you get $400 in unemployment and $500 in severance that week, you might not get any unemployment that week.

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That's what I was worried about. Did you have to report the severance on your weekly claims?

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Yes, absolutely. You have to report ALL income including severance, retirement payments, anything. They will find out if you don't and it's considered fraud.

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I had a nightmare trying to get through to Washington ESD about this exact question. Spent hours on hold trying to get clarification. Finally used Claimyr (claimyr.com) to get connected to an actual agent who explained everything clearly. They have a video demo at https://youtu.be/7DieNd3C7zQ that shows how it works.

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Never heard of Claimyr before. Does it actually work to get through to Washington ESD?

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Yeah it worked for me. I was getting disconnected constantly trying to call on my own. With Claimyr I got through in like 20 minutes and talked to someone who knew exactly how severance affects UI claims.

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Sounds too good to be true but I'm desperate enough to try anything at this point. The Washington ESD phone system is impossible.

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wait so if I'm getting severance I can't get unemployment at all? that doesn't seem fair since I'm still unemployed...

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You can still get unemployment, but the severance might reduce your weekly benefit amount. It's not an automatic disqualification.

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ok that makes more sense, I was panicking for a minute there

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The key thing people don't understand is that Washington ESD looks at severance differently depending on when it's paid and what it represents. If it's payment in lieu of notice, that's treated as wages. If it's just a goodwill payment, it might be handled differently. You really need to talk to them directly about your specific situation.

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My severance letter just says it's a 'transition payment' - not sure what category that falls into

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Transition payments are usually treated as income by Washington ESD. Definitely call them to confirm before you start filing claims.

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This whole system is so confusing!! Why can't they just make it simple - if you're unemployed you get benefits, period. All these rules about severance and other income just make everything harder.

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I feel you but they have to prevent double-dipping. If someone's getting paid severance they're technically still being compensated by their employer.

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I guess that makes sense but it's still frustrating when you're trying to figure out how to pay bills

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One important thing - make sure you file your initial claim right away even if you think the severance might make you ineligible for some weeks. Your benefit year starts when you file, not when you first receive payments. You can always file weekly claims and report zero income during weeks when severance makes you ineligible.

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Good point, I was thinking about waiting until the severance ran out but that would be a mistake

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Yeah don't wait! I made that mistake and lost out on weeks of benefits later when my severance ended.

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Has anyone actually gotten through to Washington ESD recently? I've been trying for three days straight and either get disconnected or the system hangs up on me automatically. It's maddening.

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That's exactly why I ended up using Claimyr. The regular phone system is basically unusable right now.

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I'm starting to think that might be my only option. This is ridiculous.

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Just want to add that you should keep detailed records of all your severance payments - dates, amounts, what period each payment covers. Washington ESD might ask for documentation later and you want to have everything organized.

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Good advice, I'll make sure to keep copies of everything

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Trust me, it's better to over-document than under-document with Washington ESD

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so basically I need to report my severance every week when I file my weekly claim? even if it means I don't get any unemployment that week?

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Exactly. You still file the weekly claim and report the severance income. Washington ESD will calculate if you're eligible for any benefits that week.

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ok got it, thanks for clarifying

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I'm in a similar boat but my severance is a lump sum. Does that change anything? It's being paid all at once next month.

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Lump sum severance is typically allocated across the period it's meant to cover. So if it's 6 months of severance paid at once, Washington ESD might treat it as income for those 6 months.

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That's what I was afraid of. Guess I need to call them to get the specifics for my situation.

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The Washington ESD handbook has some info about this but it's pretty vague. Basically says severance 'may affect' your benefits but doesn't give clear examples. Typical government communication.

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Right? Everything is 'may' or 'might' - just give us straight answers!

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I think they keep it vague because every situation is different, but it definitely doesn't help when you're trying to plan your finances

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Another thing to consider - if your severance is tied to a non-compete agreement or other restrictions, that might affect how Washington ESD views your availability for work. Make sure you understand all the conditions.

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Mine doesn't have a non-compete but there is a clause about not working for competitors for 90 days. Could that be an issue?

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Potentially yes, because unemployment requires you to be available for suitable work. If you're restricted from working in your field, that could complicate things.

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I used to work for an employment attorney and saw a lot of cases where people got in trouble for not reporting severance properly. Washington ESD has access to wage records and will eventually find out if you don't report income accurately.

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What kind of trouble are we talking about? Like penalties or having to pay money back?

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Both. They can make you repay benefits plus penalties and interest. In severe cases it can be considered fraud which has criminal penalties.

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Does anyone know if vacation pay or PTO payout is treated the same as severance? I'm getting both when I leave my job next month.

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Vacation/PTO payout is usually treated as wages for the period it covers. So if you get paid out 2 weeks of vacation, that's considered wages for those 2 weeks.

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Thanks, that helps me understand what I'm dealing with

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The thing that gets me is that companies use severance to avoid lawsuits but then it penalizes you when you try to get unemployment. Seems like you're getting screwed twice.

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I mean, you're still getting money from your former employer, so it makes sense that it would affect unemployment benefits to some degree

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I guess, but when you're unemployed you're unemployed regardless of whether you're getting severance

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For what it's worth, I tried Claimyr after seeing it mentioned here and it did help me get through to Washington ESD faster. The agent was able to look at my specific severance situation and give me exact answers instead of general info.

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That's encouraging. I think I'm going to try it rather than keep banging my head against the phone system

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Yeah, at this point it's worth trying anything that might work. The regular system is basically broken.

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Just remember that even if severance reduces your weekly benefits, you should still be doing your job search activities and reporting them. The work search requirements don't change just because you're getting severance.

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Oh right, I hadn't thought about that. So I still need to apply for jobs even during weeks when I might not get benefits due to severance?

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Yes, you need to stay in compliance with all the requirements even if you're not receiving benefits that week

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This thread has been super helpful. The bottom line seems to be: file for unemployment right away, report all severance income honestly, and talk to Washington ESD directly about your specific situation rather than trying to guess.

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Exactly what I needed to hear. Thanks everyone for sharing your experiences!

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That's a good summary. When in doubt, always err on the side of over-reporting rather than under-reporting income to Washington ESD.

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One last thing - if you do end up with an overpayment issue later because of how severance was handled, don't panic. You can usually work out a payment plan with Washington ESD or appeal if you think there was an error in how they calculated things.

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Good to know there are options if something goes wrong. This whole process is intimidating enough without worrying about making mistakes.

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Totally understand. Just remember that most issues can be resolved if you communicate with them and keep good records.

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I'm dealing with this same situation right now and it's so stressful! My company is giving me 3 months severance but I'm worried about how it'll affect my unemployment benefits. From reading all these responses, it sounds like I need to file my initial claim immediately and just be completely transparent about the severance payments when I do my weekly claims. Has anyone here actually had their severance payments result in zero unemployment benefits for certain weeks, or does Washington ESD usually still give you something even with severance income?

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