Labor and Economic Opportunity
Severance pay is a payment made by the employer when the employee is separated from the job. Severance pay is remuneration and is issued in calculating a worker’s benefit payment.
How Severance Pay Affects Worker’s Unemployment Benefits
The severance payment, like any other kind of "remuneration," will reduce unemployment benefits for the weeks to which the severance payment is allocated or distributed. If the payment is not allocated to a specific week or weeks by contract or by the employer, then the reduction in unemployment benefits will occur only in the week in which the severance payment is actually made.
Depending on the amount of severance pay, a worker’s unemployment benefit can be affected in the following ways: