Yes, at least in Illinois. Illinois law permits an employee who is receiving weekly or monthly severance payments to also collect unemployment benefits.
The Illinois Department of Employment Security (IDES) considers severance pay to be money that an employee received for work performed during the time of the employment. Therefore, the IDES does not consider it income for work currently performed, and therefore it will not impact an employee’s ability to receive unemployment benefits.
IDES regulations (56 Ill. Adm. Code 2920.45) state:
a) Amounts paid or payable to an individual for past services rendered by the individual to an employer or amounts paid or payable to an individual for pension or seniority rights lost upon separation or layoff shall be considered severance pay. Such pay shall not be considered wages payable or attributable with respect to the period subsequent to the individual's separation or layoff. Amounts paid or payable to the individual as severance pay shall not render the individual ineligible to receive benefits under Section 2920.5. The nature and purpose of such payments, rather than their characterization, shall determine whether or not such payments are considered severance pay under this Section.
b) For the purpose of this Section, the status of payments as severance pay is not altered by the fact that:
1) Such payments are voluntary; or that,2) Such payments are made periodically rather than in the form of a lump sum.
Ultimately, as long as an you no longer work for your employer, you are eligible for unemployment benefits. But keep in mind, taxes must be paid on severance benefits, as both the IRS and Illinois Department of Revenue consider it to be income.