If I received a severance package from my employer in a lump sum, will it effect unemployment benefits?
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If I received a severance package from my employer in a lump sum, will it effect unemployment benefits?
I received a severance package from my employer for 4 months. My last day was 3 weeks ago. I have not filed yet because I did not think I could until the 4 months was up. Can I receive unemployment and not use up the severance pay?
Asked on September 21, 2011 under Employment Labor Law, Texas
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
A lump sum severance payment should not affect your ability to collect unemployment, though payment over time (e.g. 6 months severance is paid out over 6 months, through the payroll system) often does.
The issue is whether you are still officially employed by the company, even if you are not actually performing work for them--the unemployment office and unemployment law, don't care about what you actually do or if you're being paid for nothing. So if still on payroll and still employed, even if not actually working, you most likely cannot collect unemployment compensation; but if you are no longer employed, then you should be eligible for unemployment if terminated or laid off, no matter how much severance you received.
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