Unemployment Compensation and Severance Offset

[trippypea]

Does anyone live in a state that offsets severance when calculating unemployment benefits?

I'm in PA. The PA UC website says if you receive severance to file as soon as you are separated because severance may offset UC. The example they give is "Johnny gets $42,000 in severance and the PA average annual wages (2018) is $20,280. The amount that is deductible from Johnny's UC is $21,720. If his normal weekly pay is $1200, he gets nothing from UC for the first 18 wks and the remaining $120 is deducted from wk 19. Since PA allows for 26 wks of UC, Johnny will only get UC for less than 7 wks.

DH separated from his company in January. He received severance for 6 months (not a lump sum). We didn't file immediately because we hoped that he would have a job by the time his severance ran out and he wouldn't need to. Unfortunately, the coronavirus has stopped all hiring in his field, so he filed at the end of April to get the ball rolling, knowing that the system is backed up and it is taking a long time to get paid. He hasn't received anything yet, but I see nothing on his account to indicate there is any problem besides just being slow. As far as severance and UC goes, the website states, "The offset amount is allocated to the weeks immediately following separation from employment in an amount equal to the former employee's full-time weekly wage." Had we filed in January, the offset would have made it so he had no UC for the first 14 weeks and a partial 15th week, with full payments for the remaining 11 weeks.

Since he applied for benefits 16 weeks AFTER he was separated from employment, will his payments start with full payments, or will they be subject to the original offset? Or will it be subject to an offset based on the unpaid balance at the time he applied (from 4/20 to end of June?)? Anyone ever had this situation?

[jelloshots4all]

My state WI has a question as part of the UC filing.  They ask if during the week you received severance, sick pay, vacation, holiday etc.  I believe you then input the amount for the week you are filing.  My state will not go back to original date of separation as you have to file within 7 days of separation.

My guess is his UC will be reduced based on what he is still receiving for severance.  I know with my severance, I had to notify my former employer if I filed, so I didn't "double dip".  They would reduce my severance by the amount of unemployment I received.  I didn't file until after my severance was fully paid out.

Not sure if this helps, but it is what I have experienced.

Hope he finds a new job soon!!!

[trippypea]

Hmm. Then I think I may have been filing the biweekly claims incorrectly. The first question when filing is: "Answer Yes if you worked at all during the week or if your employer paid you (regular wages, supplemental payments or any type of paid leave including vacation pay, sick leave or Paid Time Off (PTO)), to be off work for the COVID emergency."

I've been selecting NO because it didn't mention severance pay, which is paid AFTER you are no longer employed, while the things they did mention as supplemental pay are things you get while employed. If the UC would still be subject to the severance offset, and it would be based on what was left to be paid out AFTER the date DH filed for unemployment (roughly $18,000), it would be less than the PA Average Annual Wage of approx. $21,000. And only amounts higher than the average wage have to be deducted?

[The Walk of the Penguin Mich]

It depends.  When TD’s  company shuttered, he was paid out 24 weeks in severance.  He also was able to collect exactly one week of unemployment immediately after his departure date, because he quickly got picked up.  The labor person that they brought in told them how to fill out the form for this.  I wonder if a company shuttering has different rules? 

I think it very much depends upon the state you live in, we are in WA.

[jelloshots4all]

Also, if had been a lump sum payout, it would be different I think.  It sounds like he is still collecting weekly/biweekly payroll from his previous employer.  Again, every state is different.  I know my states questionnaire.

[Deleted]

There may be a filing deadline he missed, depending on your state's rules. I think in CA if you wait that long they deny your claim outright.

[buystoys]

When I collected, the verbiage was set so I was receiving supplemental unemployment rather than severance pay.  That meant that I received the full amount of unemployment plus my regular pay for 13 pay periods (my years of service plus vacation) rather than just severance pay for that same time period. 

[formerroomate99]

In my state, if you get anything whatsoever from your old company, even a vacation time paid out, It delays getting unemployment. So if unemployment is 2000 a month, and you get 6000 in severance, you don’t start collecting unemployment for three months.