Hi, My name is XXXXX XXXXX I’m happy to assist you with your question today.
Unfortunately this is true. Under the Penn Unemployment Insurance
Act severance pay received by a claimant that exceeds 40 percent of Pennsylvania's average annual wage
is deducted from the claimant's UC if the claimant's application for benefits (AB) date is on or after Jan. 1, 2012, and the severance pay agreement between the employer and the claimant is entered into on or after Jan. 1, 2012. The deductible portion of a claimant's severance pay is allocated to the weeks immediately following the claimant's separation based on the claimant's full-time weekly wage
. Severance pay means one or more payments made by an employer to an employee on account of separation from the service of the employer. Example: A claimant receives $32,000 in severance pay. Forty percent of Pennsylvania's average annual wage ($46,181 for 2013) is $18,472. Therefore, $18,472 is subtracted from $32,000 to get $13,528, which is the amount of the claimant's severance pay that is deductible. The claimant was earning $1,200 a week at the time of his separation. Accordingly, the deductible amount of severance pay is allocated at $1,200 per week to the first 11 weeks the claimant is unemployed. Because $1,200 exceeds the maximum weekly UC benefit rate, the claimant would not receive any benefits for this 11-week period. The 12th week would be calculated by taking the remaining severance pay amount of $328 to determine eligibility.
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