Does Severance Pay Affect my Unemployment Benefits?

Understanding the Impact of Your Severance Pay on Unemployment

Whether severance pay will delay or reduce your unemployment benefits depends on the agreement you signed.

If you are given severance pay with no strings attached, this will be considered continued income and you will not be eligible for unemployment until it is exhausted.

If, however, you are required to sign a release of legal claims in exchange for the severance, it does not count against your unemployment. This means you can apply right away, even while receiving severance payments.

You will have to report the income, and you may have to provide a copy of your severance agreement to the DUA to prove that you signed a release of claims. The severance may also result in an initial denial, if the DUA does not have full information about the severance agreement. In that case, if you timely appeal the denial, it is usually fairly straightforward to prove your eligibility at or before the appeal hearing.

Learn more here about unemployment benefits in Massachusetts.