In PA, severance pay is not grounds for a reduction in benefits nor grounds to discontinue your uemployment benefits. Severance pay means one or more payments made by an employer to an employee on account of separation from the service of the employer. I was given a paper-my job was not affected. Forty percent of Pennsylvania's average annual wage ($48,542.52 for 2015) is $19,417.00. Does severance, salary continuation or separation pay affect UC benefits? Severance Pay: Severance pay means one or more payments your employer makes to you because of your separation from your employer. This type of severance will prevent the employee from receiving unemployment insurance until the final payment is made. I'm assuming the severance you're receiving is based on a certain number of weeks of regular wages. A claimant receives $42,000 in severance pay. Forty percent of Pennsylvania's average annual wage ($50,699.48 for 2017) is $20,280.00. Instead of a traditional lump-sum severance, however, sometimes an employer will pay severance over time by keeping the employee on payroll even though that person has been terminated. Therefore, $19,417.00 is subtracted from $32,000 equaling $12,583, which is the amount of the claimant's severance pay that is deductible. Only the excess over 40% will be an offset. (I've never collected unemployment in PA but I've filled out the employer paperwork for any number of PA claims.) Even if you haven't received your first paycheck yet, you ultimately will receive payment for that first pay period and you can't collect pay and … Can I collect severance pay and Unemployment benefits at the same time? Since Unemployment Compensation is administered by each state separately with its own legal framework, it’s paramount to understand how your state treats severance pay. Severance pay is not classified as earned income, because it is a one time payment to you for time of service with your last company. Commonwealth of Pennsylvania Unemployment Compensation Board of Review and Lehigh Portland Cement Company (413 A.2d 444; 50 Pa.Cmwlth. Pennsylvania Questions and Answers about Severance pay. You are not violating any laws by applying, even if the answer turns out to be that you don't yet qualify. 517) Commonwealth Court of Pennsylvania, that in the state of PA, a claimant may not be disqualified from receiving unemployment compensation benefits because he or she is awarded severance pay by his or her employer, because severance pay is … Once I am laid off I will continue to receive normal pay for 8 weeks after. Any severance pay, that exceed 40% of the annual wage of Pennsylvania, is deducted from the claimants UC. $20,000 - $18,981 = $1,019 in deductible severance pay. Therefore, $500 will be attributed to each of the first two weeks following your separation, and $19 will be allocated to the third week. Any severance pay, that exceed 40% of the annual wage of Pennsylvania, is deducted from the claimants UC. Severance pay is meant to ease the burden of being unemployed. Your weekly wage is $500. Hence, if you entered into a severance agreement prior to January 1, 2012, the new law does not apply to you. For Benefit Years that begin in 2014, 40% of Pennsylvania’s average annual wage is $18,981. A claimant receives $32,000 in severance pay. Gross earnings during your last week of employment; Amount of severance pay, if any; Other states where you … At … You are not violating any laws by applying, even if … That 40% threshold is currently $17,853.00. You will need all of your employment information for the past 18 months, including all contact information, dates worked and reasons for your dismissal. Answer (1 of 3): I am very familiar with Ohio unemployment and how severance affects it. Severance pay, however, is deductible from unemployment compensation benefits only to the extent it exceeds 40% of the average annual wage in Pennsylvania. How Severance Pay Affects Unemployment. Gross earnings during your last week of employment; Amount of severance pay, if any; Other states where you have worked in … I'm assuming the severance you're receiving is based on a certain number of weeks of regular wages. Answer (1 of 3): I am very familiar with Ohio unemployment and how severance affects it. shouldn't I receive a severance pay Co. moved to another state , gave help and sev pkgs to all employees losing jobs.