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Refer to AIM-24 for information and guidance in determining whether a waiting 

period is to be established for the new period of continuing sickness for these 

and other situations.

1301 Provision of Law

Section 4(a-1) of the Act provides, in part, that:

"There shall not be considered as a day of unemployment or as a day of 

sickness, with respect to any employee--

* * *

(iii) if he is paid a separation allowance, any of the days in the period beginning 

with the day following his separation from service and continuing for that number 

of consecutive fourteen-day periods which is equal, or most nearly equal, to the 

amount of the separation allowance divided (i) by ten times his last daily rate of 

compensation prior to his separation if he normally works five days a week, (ii) by 

twelve times such rate if he normally works six days a week, and (iii) by fourteen 

times such rate if he normally works seven days a week;". 

1302 General Description of the Disqualification

Under Section 4(a-1)(iii) an employee who is paid a separation allowance is 

disqualified from receiving either unemployment or sickness benefits. The 

disqualification period begins the day following the employee's separation from 

service. It runs for a number of consecutive 14-day periods determined by a 

formula taking into account the amount of the separation allowance, the 

employee's last daily rate of pay and the number of days in his normal work 

week. The disqualification lasts approximately as long as the employee would 

work to earn the amount of the allowance.

1303 Information as to Separation Allowances

1303.01 Reports from employers

Railroad employers report to the Quality Reporting Service Center (QRSC) 

information about separation allowances paid in connection with separations 

from service on Form BA-9 Report of Separation Allowance or Severance Pay. 

From this form, a UI-13 computer tape is created and sent to the RUIA Daily 

System to calculate the separation disqualification period. The form furnished to 

employers for this report is Form UI-13, Notice of Payment of separation 

Allowance. Form UI-13 calls for the date of the employee's separation from 

service; the amount of the separation allowance; the employee's occupation and 

last rate of pay; and whether he worked a five, six, or seven-day week or was in 

train-and-engine, dining-car, or sleeping-car service. 
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1303.02 Advice from claimants

Spaces are provided on the application and claim forms for unemployment 

benefits and on the claim form for sickness benefits for claimants to report receipt 

of separation allowances from employers.

1303.03 Reports from field offices

Field offices report information about separation allowances to the Sickness and 

Unemployment Benefit Section (SUBS) on Form ID-13e. If a field office finds out 

from information on a claim or from any other source that a claimant has been 

separated from service, it will check to find out whether he has been or will be 

paid a separation allowance. If so, the field office will report information about 

the allowance to SUBS on Form ID-13e.

1304 Information Recorded on Computer Record

When a field office reports a separation allowance, a stop is put on the record to 

prevent the payment of benefits until the employer reports the particulars; and 

the employer is asked for a report on Form ID-13e. Upon receipt of an 

employer's report on Form ID-13e, the duration of the disqualification period is 

determined; a stop is then placed on the record to prevent the payment of 

benefits for days in the disqualification period. This action is taken even if there 

is no previous record for the individual.

1305 Considerations in Applying the Provision

1305.01 Separation allowance

A "separation allowance" is a payment by an employer to an employee who 

elects to separate from service. It may be paid under the provisions of a labormanagement agreement or other job-protection plan, such as the Washington 

Agreement, or as a result of an arrangement between the employer and the 

individual employee.

The disqualification for separation allowance applies when the employee 

receives a separation allowance, regardless of whether the employee voluntarily 

elected to end the employment relationship or the employee is involuntarily 

separated. 

The separation allowance may be paid in a lump sum, or it may be paid in 

installments for the convenience of one or both of the parties. The method of 

payment does not alter the character of the allowance. It is "remuneration" and 

"compensation" for the month in which the employee's separation from service is 

effective, but it is not attributable to any particular days in the month or to any day 

after the employee's separation from service. Thus no day will be denied on the 
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ground that all or part of a separation allowance is attributable to that day. The 

"amount of the separation allowance" is the gross amount before any deductions.

1305.02 Date of separation

The date of an employee's "separation from service" is the date as of which his 

employment relationship is terminated. This usually comes about on the day 

when he signs a paper accepting a separation allowance. In occasional cases, 

an employee may sign a form specifying separation on a future date; in such 

cases, separation would occur on the date specified. The acceptance of a 

separation allowance does not cause a separation to take place at some time in 

the past. An employee who accepts a separation allowance does not ordinarily 

work on the day separation takes place. An arrangement for an employee to 

accept a separation allowance is usually made some time after the date of the 

employee's last work. Thus the date of an employee's last work for an employer 

generally is not the date of his separation from service. Typically, the date of 

separation is later than the date last worked. The date of separation included in 

the employer's report of the separation allowance is accepted as correct in the 

absence of evidence to the contrary.

1305.03 Daily rate of compensation

The daily rate of compensation used in determining the length of an employee's 

disqualification period is the rate applicable to his last work before his separation 

from service. The rate included in the employer's report of the separation 

allowance is accepted as correct in the absence of evidence to the contrary.

1305.04 Normal work week

The number of days an employee "normally works" in a week is the number of 

days' work considered full-time for his occupation. For this purpose, employees 

in train-and-engine service, dining-car service, and sleeping-car service, are 

regarded as working seven-day weeks. The reports of separation allowance will 

ordinarily contain sufficient information about the work weeks of employees in 

other occupations; thus an employee is ordinarily regarded as working the 

number of days (5, 6, or 7) indicated in his employer's report of separation 

allowance. An employee who works part-time or intermittently is regarded as 

normally working the number of days in a week (5, 6, or 7) that would be full time 

for his occupation.

1306 Determining Length of Disqualification Period

1306.01 General

The method of determining the length of a disqualification period is set forth 

briefly below. The computer program follows this method.
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1306.02 Determining daily rate of compensation

The employee's last daily rate of compensation is ascertained from the 

employer's report of the separation allowance. If the rate of pay is reported in 

terms other than a daily rate, it is converted to a daily rate. Conversion to a daily 

rate of pay is as indicated below unless there is information that such conversion 

would be improper. Most exceptions to these rules are covered in Appendix A to 

AIM-4-I,

1. Monthly rate

Divide by:

21.75 for 5-day-week employees

26 for 6-day-week employees

30 for 7-day-week employees, including employees in train-and-engine 

service, dining-car service, sleeping-car service.

2. Weekly rate

Divide by 5, 6, or 7, according to the number of days in the employee's 

normal work week.

3. Hourly rate

Multiply by:

8 for shop crafts, yard service, and office employees

6 for sleeping-car conductors

6 for all dining-car employees (Including stewards), porters, attendants, maids 

and bus boys in service on trains, except multiply by

5.8 for chair-car attendants, sleeping-car porters, all dining-car employees 

(including stewards) and train porters for GM&O; all dining-car employees 

(except stewards) for CB&Q.

4. 100 (or 150) miles

Consider as daily pay rate.

1306.03 Computation of 14-day periods 

The employee's last daily rate of compensation prior to his separation from 

service is multiplied by, 10 for 5-day-week employees, 12 for 6-day-week 

employees, and 14 for 7-day-week employees. Use the 7-day-week rule for 
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employees in train-and-engine, dining-car, and sleeping-car services. The 

amount of the separation allowance, the gross amount before any deductions, is 

divided by the result of computing the last rate of compensation for a 14-day 

period. The net result is the number of consecutive 14-day periods for which the 

disqualification runs. In this resulting number, a fraction of less than one-half 

shall be disregarded; a fraction of one-half or more shall be increased to the next 

higher number. The final equation will look like this:

(SSSSSSSSSSSSSSSSSSSS pp) ÷ (ll ll oo cc cc 14 dd )

= (# oo 14 dd oo dd dddd )

Example 1

Employee A, a clerk, was separated from service on July 26, 2020. They were 

paid a separation allowance of $15,000, their last daily rate of compensation 

before separation was $80, and their work schedule was 5 days a week. This 

equates to 10(dd ) × 80 = $800. This resultant amount will be used in the 

following equation to find how many 14-day periods Employee A will be 

disqualified for, $15,000 ÷ $800 = 18.75, which is rounded up to 19. Therefore, 

the number of 14-day periods constituting the disqualification period is 19. The 

disqualification period starts July 27, 2020 and runs for 266 calendar days (19

14-day periods) ending on April 18, 2021. 

Example 2

Employee B, an engineer, was separated from service August 31, 2020. They 

were paid a separation allowance of $30,000, their last work before separation 

was at the rate of $230 for 100 miles, and their work schedule was 6 days a 

week. This equates to 12(dd ) × $230 = $2,760.00. This resultant amount will 

be used in the following equation to find how many 14-day periods Employee B 

will be disqualified for, $30,000 ÷ $2,760.00 = 10.87, which is rounded up to 11. 

The number of 14-day periods constituting the disqualification period is 11. The 

disqualification period starts September 1, 2020 and runs through February 1, 

2021. 

1307 Determinations on Claims for Benefits

1307.01 Claim including days in disqualification period 

When there is an active stop for separation allowance, the computer will deny 

any days in the disqualification period which are claimed as days of 

unemployment or as days of sickness, and will generate a referral.
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1307.02 Claim including days after disqualification period 

An employee who is paid a separation allowance may get unemployment or 

sickness benefits for days after the end of the disqualification period if he is then 

a qualified employee and meets the usual requirements.

1308 Determining Whether Benefit Payment Erroneous 

If it is found that benefits have been paid for days in an employee's 

disqualification period a determination is required as to whether benefits were 

paid erroneously. Such determinations shall be governed by principles set forth 

in AIM-21. It may generally be assumed, in this connection, that payment of 

benefits was not induced by fraud or other fault of the claimant if the claim or 

claims were made before the separation allowance was paid. It may be 

considered, without investigation, that claims were made before the allowance 

was paid if the last day for which benefits were paid is no more than two weeks 

after the reported date of separation from service. In other cases, information 

should be obtained from the claimant or the employer as to (a) the date which the 

claimant signed a paper accepting the separation allowance, (b) the date stated 

in the paper as the date of separation from service and (c) the date on which the 

separation allowance was paid.

1309 Notice to Claimant

Notice of disqualification for separation allowance shall be sent to each claimant 

who is denied benefits on the basis of such disqualification. Form Letters ID-13c 

through ID-13f are provided for this purpose.

1310 Effective Date

The disqualification applies in cases of separations occurring after the enactment 

date of the amendments, with respect to calendar days in benefit years beginning 

after June 30, 1968. The benefit year is the individual's benefit year, not the 

general benefit year. That is, no day can be denied before the first day of the 

employee's first benefit year beginning July 1, 1968 or later.

1311 Authority to Make Determinations

The Sickness and Unemployment Benefit Section is authorized to make 

determinations as to disqualification for separation allowance.

1312 Forms and Form Letters Prescribed

The following forms and form letters are prescribed:

ID-13c (9-99) 

ID-13e (2-11) 

ID-13f (7-93) 
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1313 Form Letters Superseded

The following form letter is hereby superseded:

ID-13d (6-68)

1314 Instructions Superseded

The following instructions are hereby supersede