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socrateaser
socrateaser, Lawyer
Category: California Employment Law
Satisfied Customers: 33872
Experience:  Retired (mostly)
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can I receive california sdi and severance pay at the same

Customer Question

can I receive california sdi and severance pay at the same time?
Submitted: 1 year ago.
Category: California Employment Law
Expert:  socrateaser replied 1 year ago.
Hello,

Severance pay does not affect a claimant's State Disability Insurance benefits. See Powell and Byrd vs. California Unemployment Insurance Appeals Board, 63 Cal. 2d 103 (1965).

Hope this helps.
Customer: replied 1 year ago.

The hyperlink that was provided addresses unemployment benefits and severance pay. My question was asking if State Disability benefits can be collected while the severance pay (which is not wages) is in effect. State Disability benefits and Unemployment benefits are two distinct and different benefits. Can you address State Disability (SDI) only?

Customer: replied 1 year ago.

The hyperlink that was provided addresses unemployment benefits and severance pay. My question was asking if State Disability benefits can be collected while the severance pay (which is not wages) is in effect. State Disability benefits and Unemployment benefits are two distinct and different benefits. Can you address State Disability (SDI) only?

Expert:  socrateaser replied 1 year ago.
Hello again.

I apologize for any miscommunication or misunderstanding. Both UI and SDI benefits are reduced by wages. The Powell case stands for the legal proposition that severance is not wages, therefore it is not considered in calculating SDI benefits.

Hope this helps.
socrateaser, Lawyer
Satisfied Customers: 33872
Experience: Retired (mostly)
socrateaser and other California Employment Law Specialists are ready to help you
Customer: replied 1 year ago.

Thanks - helps some but would have liked to had a reference to lean on that was specifically addressing State Disability Insurance.

Expert:  socrateaser replied 1 year ago.
I would too, but the reality is that there is no dispositive statute, regulation or case law. If there were, I would have given it to you, because I am an extremely dilligent researcher -- and I hate not to be able to provide a direct citation to legal authority.

All I can tell you is that EDD will not compute severance pay in determining your SDI benefits, and the reason is because severance is not considered wages under the Powell decision.

I understand that this may not give you a sense of security -- but, the only other thing I can recommend is for you to contact EDD and ask them directly. If you want, I can send them an email and see if they respond -- then I can post the result here, once I receive it. But, I could be making up the answer, so the only way you would be certain of my answer would be to try to corroborate it yourself.

Let me know what you would like, either way.

socrateaser, Lawyer
Satisfied Customers: 33872
Experience: Retired (mostly)
socrateaser and other California Employment Law Specialists are ready to help you
Expert:  socrateaser replied 1 year ago.
Hello again,

After concluding our conversation, I decided to send EDD an email and request an opinion on your question. The response came this morning -- and it was extremely short. I reproduce it here for your convenience (personally identifying materials redacted):

Topic:
Other (Questions or Comments)

You wrote us the following:
Can you please tell me if SDI benefits are reduced by an employee severance plan/agreement (lump sum or installment)? I have read Powell v. California Dept. of Employment, 63 Cal. 2d 103 (1965), but I find no statute, regulation, or case law directly addressing this issue. Thanks in advance.

Here is our reply:
no for lump sum yes for installments

END EMAIL TEXT

Comments: This answer is provided without citation to legal authority. I believe it to be legally incorrect -- however, since it would appear to be the internal EDD position that installment severance is wages, if you don't want to fight about it, then make sure you get your severance as a lump-sum payment. Otherwise, you may end up in multiple appeals hearings trying to demonstrate that the EDD position is legally flawed.

Best wishes.

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