lump sum payment

i received a lump sum payment when my plant closed. It was not a pension and not severance. my paperwork even stated so. It was stated as such on my paper work. Is this deductible on a weekly basis or just for one week of benefits? please advise.

1 answer  |  asked Apr 1, 2013 3:22 PM [EST]  |  applies to Ohio

Answers (1)

Neil Klingshirn
I think you are asking about unemployment compensation benefits, and the effect of a lump sum payment at the time of your separation or layoff on your unemployment compensation benefits.

Ohio reduces your unemployment compensation benefits in any week in which you receive separation pay. If you employer continues your base wage for four weeks as separation pay, then the Ohio Department of Jobs and Family Services (ODJFS) will reduce your benefits by the amount of your continued wage for those four weeks.

Separation pay paid in a lump sum will reduce your benefits for those weeks that the lump sum is designated to cover. Sometimes your employer will designates the weeks for which you receive separation pay. For example, if you received a week of pay for each year of service, and worked 15 years, then you would be treated as receiving the lump sum payment for the first fifteen weeks. Similarly, if the employer does not designate the weeks, but pays everyone the same amount as a lump sum, then ODJFS will treat it as separation pay in an amount equal to your normal pay until it is used up. For example, if you earned $1,200 a week and received $4,800 in separation pay, then the Ohio Department of Jobs and Family Services (ODJFS) would treat that amount as received over your first four weeks of unemployment.

Ohio's law on this is in ORC Section 4141.31. The corresponding Ohio Administrative Code is OAC 4141-30-01, Separation Pay. Also, search online for the "Ohio Dept. of Job and Family Services' Workers Guide to Unemployment Compensation." The current Guide says that amounts received as "Severance Pay" and "Company Buy-Out Payments" will be deducted from an individual's weekly benefit.

posted by Neil Klingshirn  |  Apr 2, 2013 08:44 AM [EST]

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