When a person loses a job under certain conditions, he is eligible to receive unemployment benefits -- weekly payments from his state government meant to partially offset the loss of a salary. The purpose of these payments is to allow the individual to purchase things he needs to survive, such as food and shelter, while looking for a job. However, if the person is receiving severance, he may be ineligible to receive unemployment or eligible to receive only partial payments.
Unemployment is meant to help support a person who no longer receives a salary. Whether a person who is receiving severance pay in New York can receive these benefits will depend on whether the state department of labor determines that the person's severance counts as income. For example, a person who is receiving a pension or other regular payments in New York will only be eligible for partial payment, if he is eligible at all.
Whether severance payments count as income is not always clear. While the New York State Department of Labor states that a person who continues to receive a salary after being laid off, with the provision that he will keep receiving this salary until he finds a job, is indeed ineligible. However, severance payments that are equivalent to only a percentage of the person's salary may or may not disqualify the person, depending on their size and how they're paid out.
Whether severance counts as income depends in large measure on when the severance is paid. If the severance is paid all in one lump sum, then an applicant is likely ineligible for unemployment for just the week in which he received the payment, but will be eligible to receive payments on all subsequent weeks. However, if the severance pay is spaced over several weeks, then this will likely be interpreted by the labor department as ongoing income.
If a person receives a series of severance payments over a period of time, he may still qualify for benefit, albeit reduced from the amount he would normally qualify for. The exact size of this reduction will depend on the size of the severance payment in proportion to the person's salary. Also, according to the New York Department of Labor, an employer paying the employee for unused vacation time does not affect eligibility, although a person cannot apply for benefits if he is using this vacation time.