Q. I was let go from my company after 25 years. They gave me a buyout and I receive a payment every two weeks for 10 months. Can I still get unemployment?
— Out of work
A. We’re sorry to hear about your job loss after being with your company for such a long time.
But we’re glad to hear you got a severance package, or buyout, to provide income over the course of the next 10 months.
According to the New Jersey Department of Labor, severance packages are not considered income and do not disqualify you from applying for unemployment compensation, said Claudia Mott, a certified financial planner with Epona Financial Solutions in Basking Ridge.
You just have to make sure the payments are considered severance and not a continuation of employment with the firm, she said.
“The fact that you are receiving payments over the course of the next 10 months may impact the timing of your claim and it may depend on how the company is making the payments to you,” she said. “If the payments are being made through their payroll system, the state may consider you to still be on the company’s active payroll and delay your ability to receive benefits.”
If you had received a lump sum severance package, you would be able to apply for unemployment benefits immediately, she said.
“Once you begin receiving payments, you will be required to check in once a week to confirm your eligibility,” she said. “The Division of Unemployment wants to be sure that you are looking for employment and are ready and able to take a position should it come your way.”
The best course of action may be to put in your unemployment application and follow up to discuss the specifics of your situation once it is processed, Mott said.
Email your questions to Ask@NJMoneyHelp.com.
This story was originally published August 14, 2020.
NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.