Department of Labor

• Q: Does receiving a pension affect my benefits?
• Q: Is a 401(k) considered a pension that reduces my benefit rate?
• Q: If I roll my pension, 401(k), 403 (b), etc. into a qualified IRA, am I still subject to a rate reduction?
• Q: If I receive dismissal or severance pay, will it affect my benefits?
• Q: What is considered dismissal or severance pay under the new Unemployment Insurance reform law?
• Q: My weekly dismissal/severance pay is more than the maximum weekly benefit rate I would receive from Unemployment Insurance. Does that mean I cannot receive Unemployment Insurance?
• Q: How do I know what my last day of employment was for the purposes of dismissal/severance pay?
• Q: Is WARN pay the same as dismissal/severance pay?
• Q: Can dismissal/severance pay be used to establish a new claim after the dismissal/severance pay period ends?
• Q: What if I’ve lost my job, but I’m still not sure if I will receive dismissal/severance pay, or when I might receive it?
• Q: Will I be eligible for benefits if I receive my first dismissal/severance payment more than 30 days after my last day of employment?
• Q: What if I start receiving Unemployment Insurance benefits, but then start receiving dismissal/severance pay within 30 days of losing my job?
• Q: Is dismissal/severance pay paid in a lump sum treated differently from payments made over a period of time?
• Q: What if my former employer is sending dismissal/severance pay to my union, and the union sends it on to me?
• Q: If I roll my severance (either lump sum or scheduled payments) into a qualified Individual Retirement Account (IRA), will it still affect my benefits?

Q: Does receiving a pension affect my benefits?

A: If you have retired and are not seeking employment, you are not eligible for unemployment insurance benefits.

If you are retired and are actively seeking work, you may be eligible for unemployment benefits under the same conditions as other workers. However, your weekly benefit rate may be reduced by 100% of the weekly equivalent of the prorated amount of the pension you are receiving from a base period employer even if you did not contribute to the pension. If you were the sole contributor to the pension then your benefit rate will not be reduced. The Telephone Claim Center will make a determination of any reduction in your weekly unemployment benefit rate. As with other determinations, you may request a hearing if you disagree with the reduction.

It is your responsibility to notify the Telephone Claims Center if you become eligible for a pension while receiving benefits. Failure to do so could result in an Overpayment Determination.

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Q: Is a 401(k) considered a pension that reduces my benefit rate?

A: If your former employer is a base period employer, your benefit rate could be reduced if you received a 401(k) payment which your former employer contributed to. This would apply if you receive periodic 401(k) payments or if you are unemployed due to your retirement but remain active in the workforce, and you receive a lump sum payment. The pension reduction applies to a governmental or other pension, retirement pay, annuity or any other similar periodic payment which is based on previous work.

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Q: If I roll my pension, 401(k), 403 (b), etc. into a qualified IRA, am I still subject to a rate reduction?

A: No.

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Q: If I receive dismissal or severance pay, will it affect my benefits?

A: You may be eligible for Unemployment Insurance if the weekly payments of dismissal or severance are less than the maximum benefit rate.

You will not be eligible for benefits if:

• You receive weekly dismissal or severance payments that are greater than the maximum weekly benefit rate; or
• Your employer gave you a lump sum payment and the weekly pro-rated amount of the payment is greater than the maximum weekly benefit rate.

You may be eligible to collect benefits if:

• The weekly amount of dismissal or severance pay is less than or equal to the maximum weekly benefit rate; or
• You receive your first dismissal or severance payment more than 30 days after the last day you worked.

If you are still unemployed when your dismissal or severance pay ends, you should file a claim for benefits. You should do this even if you are not sure if you have enough earnings, or if you filed a claim when you started receiving dismissal or severance pay. We will determine if you are eligible for benefits.

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Q: What is considered dismissal or severance pay under the new Unemployment Insurance reform law?

A: Unemployment Insurance law defines dismissal pay as payments made by an employer to an employee due to separation from employment. Severance pay is considered dismissal pay.

Dismissal/severance pay does not include payment for pension, retirement, accrued leave and health insurance or payments for supplemental unemployment benefits.

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Q: My weekly dismissal/severance pay is more than the maximum weekly benefit rate I would receive from Unemployment Insurance. Does that mean I cannot receive Unemployment Insurance?

A: Yes, at least while you are receiving dismissal/severance pay at that rate. However, you may be eligible to receive Unemployment Insurance benefits when the dismissal/severance pay stops or falls below the maximum weekly Unemployment Insurance benefit rate. When this happens, file a new claim.

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Q: How do I know what my last day of employment was for the purposes of dismissal/severance pay?

A: Your last day of employment is the last day you were actually working or were on paid leave, such as scheduled vacation or medical leave.

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Q: Is WARN pay the same as dismissal/severance pay?

A: No. Payments made under the New York State WARN Act (Worker Adjustment and Retraining Notification Act-- Article 25-A of the Labor Law) are not considered dismissal/severance pay. The WARN Act states that Unemployment Insurance benefits may not be denied or reduced because of payment(s) received under the WARN Act.

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Q: Can dismissal/severance pay be used to establish a new claim after the dismissal/severance pay period ends?

A: No. Only wages or earnings for actual employment during the base period of a new claim can be used to establish a new claim.

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Q: What if I’ve lost my job, but I’m still not sure if I will receive dismissal/severance pay, or when I might receive it?

A: You should file for benefits and let us determine your eligibility. However, you must call the Telephone Claims Center right away if you do begin receiving dismissal/severance pay within 30 days of losing your job. If you don't call us right away, you may receive an overpayment of benefits, which you will need to pay back. You also may be subject to penalties.

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Q: Will I be eligible for benefits if I receive my first dismissal/severance payment more than 30 days after my last day of employment?

A: Yes. If you receive your first dismissal/severance payment more than 30 days after your last day of employment, you will be able to receive Unemployment Insurance benefits if you meet the other eligibility requirements.

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Q: What if I start receiving Unemployment Insurance benefits, but then start receiving dismissal/severance pay within 30 days of losing my job?

A: You must call the Telephone Claims Center right away. If you don't call us right away, you may receive an overpayment of benefits which you will need to pay back. You also may be subject to penalties.

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Q: Is dismissal/severance pay paid in a lump sum treated differently from payments made over a period of time?

A: No. Any dismissal/severance pay you receive within 30 days of your last of employment, whether as a lump sum or in payments made to you over a period of time, may affect your benefits.

Usually, the time period covered by the lump-sum payment will be clearly spelled out in your severance /dismissal pay agreement or plan. If it is not, the Department of Labor's Telephone Claims Center will determine the time period that the lump-sum payment covers. They will look at your actual average weekly pay or the average weekly pay of your highest-earning calendar quarter in your base period to determine the length of time covered by the lump-sum dismissal/severance payment.

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Q: What if my former employer is sending dismissal/severance pay to my union, and the union sends it on to me?

A: The same rules apply as if you were receiving the severance/dismissal pay directly from your former employer. Important: You are considered to have received severance/dismissal pay when it is transferred from your former employer to your union, not when you actually receive it.

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Q: If I roll my severance (either lump sum or scheduled payments) into a qualified Individual Retirement Account (IRA), will it still affect my benefits?

A: The severance payment is dismissal pay. What you do with the severance does not change the fact that it is dismissal pay. If your severance pay exceeds your benefit rate, you would not be eligible for benefits for a period of time after filing your claim. (See "If I receive dismissal/ severance pay, will it affect my benefits?" above.)

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