man signing papers

I received early retirement. Do I qualify for unemployment?


Q. I worked for United Airlines for 26 years. Due to the devastating COVID pandemic, I was offered a voluntary early retirement package. The voluntary separation started March 14, 2021 and it will end Aug. 31, 2022. I remain on the company’s payroll until Aug. 31, 2022. When can I file for unemployment?
— Unsure

A. We’re sorry to hear about your job, but glad you’re getting something from the company.

This can, though, complicate what happens with unemployment benefits.

How the Labor Department will treat the money will depend on how the retirement package is classified, said Joseph Sarnecki, a certified financial planner with U.S. Financial Services in Fairfield.

“If it is considered severance, you are in luck as the State of New Jersey does not consider severance pay to be income when calculating whether or not a person should be able to receive unemployment,” Sarnecki said.

Given that you remain on the active payroll, it is most likely considered an extension of your employment relationship or a continuation of benefits, he said. If that’s the case, you will have to wait until the end of separation to file for benefits.

“Had severance been paid in a lump sum, you more than likely would have qualified for unemployment right away,” he said. “If they did not classify this as severance, and the separation is based on you retiring or resigning, you will not be eligible.”

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This story was originally published on July 13, 2021. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.