Unemployment and severance pay

[funder]

What is the name of your state (only U.S. law)? MI

Person laid off permanently (position eliminated) in Feb. Starts drawing unemployment. Then, along comes a "bonus" of $1,700 based on last year's work performance. Does this have to be included as income for the purposes of drawing unemployment?

There is also a severance package of $5,400 coming and the same question goes for this. Person has to sign papers accepting this severance package before it is paid. I think it's that no lawsuit or other claims will be made by employee. But, thinking about the money coming, it will likely wipe out unemployment.

Person was first told they would be called back to work. Under this condition, they were NOT eligible for the 65/35% for cobra coverage and had to pay the whole monthly amount. Person pays $900 for two months cobra coverage and all of a sudden they have the "letter" telling them of the position elimination. All of a sudden, they are eligible for the 65/35. Thanks for any elightment. There is supposed to be all this $$ out there for displaced workers ie education etc. Just try to find it. Funder

 

[Beth3]

Does this have to be included as income for the purposes of drawing unemployment? Yes. Bonuses are wages.

There is also a severance package of $5,400 coming and the same question goes for this. Same answer as above.

You need to report all the income you receive from your employer to the UC Division, including bonuses and severance pay. (a) You can be assured the employer will report it to them and (b) if you don't, the State may pursue you for unemployment fraud.

 

[justalayman]

Michigan did a strange thing with the last person I know that received severance pay. They took the amount of the severance and divided it by the employees typical weekly pay and did not pay UI for that number of weeks.

I do not think this fair but it did not reduce the ultimate amount of benefits received so it really did not cause any harm.

 

[pattytx]

justalayman, I think that several states do that.