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Can I Collect Unemployment With Severance Pay in Florida?

by Drew
(Fort Lauderdale, Florida)

I am receiving 6 months severance from an executive position that was downsized. Can I still collect unemployment as I am no longer working.

Hi Drew,

Probably not while the severance is representing weekly wages.

But let's not forget that unemployment weekly benefit amounts are based on earnings in a base period and that is the "First 4 of the last 5 COMPLETED quarter relative to the quarter you file in.

Let's also not forget that you are only entitled at most, to 26 weeks of regular benefits in a "benefit claim year".

So although you may not be able to collect for six months out of that year .. you could for the other half when the severance is no longer a factor.

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What about a lump sum severance?
by: Anonymous

What happens if you receive a 6 month severance in a lump sum? Are you then entitled to receive unemployment as no new money will be coming in?

Hello Annonymous ..
by: Chris -

Your question has been asked and answered .. many times before.

But because it raises an issue with Florida, and I have personal issues with how that state runs their UI program ..

Generally speaking a six month severance paid as a lump sum, still represents six months of weekly wages.

In the state of Florida .. I'm sure without even checking it's UI law, they will spread a lump sum payment out over the weeks you do claim unemployment and label it as deductible income from UI benefits.

Your question, although about Florida is in fact a a monetary issue.

Given most states have a claim year represented by 52 weeks, you could conceivably wait to claim any benefits if still unemployed and still non-monetarily eligible, after that severance wipes out the benefit amount over the first 26 weeks which I don't see you getting any partial benefits.

I do not think there would be any chance of you collecting a partial benefit while that severance is being broke up over the duration of weeks your claims liability can be paid if one is totally unemployed your claim when the severance is being treated as if you were being paid for working.
Severance pay is almost alway going to be more than the maximum weekly benefit amount one can get from FL.

What I'm also saying is anything considered wages while claiming unemployment benefits is subject to a state's specific partial benefit formula that includes a disregard amount for small part-time earnings while collecting.

Florida however, might start paying you benefits when that severance runs out. But keep in mind that for whatever it's publicized legislative reason may be for reducing the duration of benefits .. from the typical 26 weeks is primarily to deal with insolvency and at issue is the states need to regain solvency of it's general unemployment fund.

By the way that link above, should lead to all the information you, or anyone might need to consider about severance pay and unemployment benefits .. and more, on a state by state basis.

Thank you
by: Anonymous

Chris, I appreciate your prompt, detailed response.

You're Welcome!

Should I file?
by: Anonymous

I've just found myself in the same boat as Drew. Six months severance. I hear what you're saying above - no benefits while I receive those payments. My question is: is there a "right" time to file? Should I pursue my job search, wait the six months, then God forbid I am still unemployed, file when the severance payments cease? Or is there any requirement to file closer to the actual date of the lay off? THANK YOU!!

When should you file for unemployment if considering severance or separation payment from an employer
by: Chris -

Question #1 - Is there a "right" time to file?

There may be a better time to file than another, when one considers where in the base period, their high earning quarter is located .. because that can affect the amount of unemployment benefits someone is paid.

Relative for instance, when/if before someone becomes separated from employment they worked at reduced hours, or after a reduction in pay. You can figure the answer out for yourself, once you know what base period Florida uses to apply the monetary formula for establishing the amount of weekly unemployment benefits, right here.

Question #2 Should I pursue my job search?

Absolutely, but this is just my opinion .. if your plan is to find another job.

Florida's maximum weekly benefit amount can be found in the same book of state by state charts, I linked to above. I think it adequately explains by way of the varying max benefits in each state, why one should pursue another job.. in addition to the fact that once you file for benefits .. state conditional eligibility rules kick in and demand one conduct a bona fide and if you're smart .. documented search for suitable employment.

Question #3 Or is there any requirement to file closer to the actual date of the lay off?

I think that once you know the answer to question #1 it should become obvious as to when would be the optimal time for you specifically, to apply.

Truly, I know of no requirement for anyone to apply for unemployment benefits, however, I strongly believe if one does apply .. they should do so as informed as possible including understanding how a state monetarily qualifies their claim before the claim moves on to non-monetary eligibility issues to be resolved through the initial adjudication process to determine if the weekly benefit is something one is entitled to .. due to the cause for separation.

In other words ..

Given the fact you were "laid off" (which literally mean a lack of work) you are the one in control of when you file .. and determining for yourself, which, if any quarter would be most optimal for you to not waste six months of a year long claim .. waiting for severance pay to become a moot point to collect if needed .. the 26 weeks of benefits, you may be hoping you won't have to exhaust .. before finding another job.

PS .. I know you probably didn't want to hear all the above, but just know .. if I answer a new question, or a relevant comment .. it never just goes to one.

A small twist to the above question
by: Anonymous

I just received a lump sum severance payment from my former employer. I have already received unemployment for 6 weeks prior to this payment. Do I have to claim the severance payment for the week that it was paid out? If i do claim it how will it affect that week and the subsequent weeks (the severance was based on a 4 week payout) What happens if I don't claim it and will it be discovered eventually if I don't claim it?

Yes, you must claim it as income from a job because if you don't it will be found out and you won't like of the consequences of intentional unemployment fraud .. even if the lump sum meets conditions that may, or may not exclude the payment from being the same as wages paid to an employee .. who wasn't actually working for the pay.

Chris -

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