Do I report severance pay to ESD after permanent layoff? Will it affect my unemployment benefits?

Yes, you absolutely must report the severance pay to ESD when you file your weekly claims. According to Washington state unemployment rules, severance is considered reportable income for the week(s) it covers. How it affects your benefits depends on how they structure the payment. If they give you a lump sum payment but designate it as covering multiple weeks (like 4 weeks of pay), ESD will allocate that over those weeks and reduce/eliminate your benefits during that period. If it's just a one-time payment not allocated to specific weeks, it typically affects just the week you receive it. After the severance period is over, you can continue collecting your regular unemployment benefits up to your maximum benefit amount. The severance doesn't reduce your total claim balance - it just potentially pauses or reduces payments temporarily.

Been thru this exact thing last year. The HR dept should give you paperwork showing if the severance is allocated over multiple weeks or just a lump sum. MAKE SURE to report it correctly on your weekly claim when you get it!!! If ESD finds out later you didn't report it, you'll get hit with an overpayment notice plus penalties. Severance doesn't affect your total benefit amount - you'll still get your maximum weeks of benefits, just delayed by however many weeks your severance covers. And remember to switch from standby to regular unemployment status and start doing your 3 job search activities every week!

You definitely need to report it!!! My brother didn't report his severance and ESD found out 6 months later. They made him pay back $4,600 in benefits plus a 50% penalty!!! Don't make that mistake. Also your standby status will probably end when your company officially closes. You'll need to start doing job searches every week (3 activities) and documenting them. The system should prompt you about this change when you do your weekly claim after the standby period ends.

I got laid off in 2020 and reported my severance pay just how they said. ESD is weird sometimes abt how they handle it. They count it as earnings for the week you receive it OR they spread it over weeks - depends on how your HR words it in your severance docs. But either way after that period, I got my full unemployment for the max weeks. The system will tell you when you need to start job searching instead of standby, just answer the questions honestly each week.

To accurately answer your questions: 1. Yes, all severance pay must be reported to ESD when filing your weekly claims. 2. Severance doesn't reduce your total benefit amount, but it may temporarily reduce or eliminate your weekly payments during the period the severance covers. I recommend checking if your severance package specifies it covers a particular time period. If it's allocated over multiple weeks, ESD will distribute it accordingly. If it's considered a one-time payment, it generally only affects the week you receive it. Regarding your standby status - when the company officially closes, you'll need to transition to regular unemployment status and begin conducting job search activities (3 per week). You should proactively report this change to ESD through your eServices account rather than waiting for automatic detection. Make sure to keep detailed records of all correspondence regarding your severance package. This documentation will be crucial if there are any questions from ESD about your benefits.

Has anyone here actually been able to get through to ESD on the phone lately?? I've been trying to ask them a similar question about my severance for TWO WEEKS and can't get past their stupid automated system! SO FRUSTRATING!!! 😡

wait ur company was shut down permanently after telling u it was temporary?? thats exactly what happened to me!! they strung us along for like 4 months saying we'd be back soon then boom, closed forever. such bs. anyway i got severance too and reported it on my weekly claim for the week i got it. my severance letter didnt say it was for specific weeks so esd just counted it as income for that one week. i still got my full unemployment benefits after that week.

Just to follow up on your standby status - you should proactively contact ESD to update your status from standby to regular unemployment. When your standby period ends (either the originally approved period or when your company officially closes), you must immediately begin conducting and documenting your job search activities (3 per week). Also important: Once you switch from standby to regular unemployment, you must be able and available for work each week. This means you need to be actively seeking suitable work and ready to accept job offers. If you're planning any vacations or time away, be aware this could affect your eligibility during those weeks. Regarding your maximum benefits - yes, you can still receive your full maximum benefit amount (MBA) over time, but the weeks you receive severance pay may delay when you can access those funds if the severance is allocated over multiple weeks.

Sorry to hear about your situation - it's really tough when companies string you along like that. I went through something similar a few years back. Just wanted to add that when you do report your severance, make sure you have the exact dollar amount and date you received it. ESD can be picky about details. Also, once you transition off standby, keep really good records of your job search activities. I use a simple spreadsheet with company names, positions applied for, dates, and method of contact. Makes it easy when you file your weekly claims and if ESD ever audits your job search later. One more tip - if your severance pushes you into a higher tax bracket for the year, you might want to talk to a tax professional about potential quarterly payments. Getting unemployment plus a lump sum severance can sometimes create a surprise tax bill come April. Good luck with everything!