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Does Signing A Release Make My Severance Pay A Special Wage Payment?
I was laid off Sept 30, 2020. I had to sign a Release to be eligible to collect a severance pay (one year long, every 2 weeks at regular pay amount).
Question: does signing the Release allow the severance pay to be characterized as Special Payment and therefore not counted as income?
Hi,
With or without a release It sounds like your severance pay would be classified as a 'payment on account of retirement', and as such would be considered a special wage payment (SWP) excludable from counting for earnings test purposes. You'll need to notify Social Security and complete any required paperwork in order to get the severance pay excluded, though.
Best, Jerry
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Posted:
October 19, 2020