Pensions & Unemployment in Illinois

In Illinois, unemployed workers and those working reduced hours can apply for unemployment benefits through the Department of Employment Security. Eligible workers can receive benefits for up to 26 weeks without federal extensions. After serving a one-week unpaid waiting period, the department will send weekly benefits to eligible claimants. Illinois law requires the department to reduce unemployment benefits for claimants receiving pension or any other type of retirement pay.

Eligibility

The Illinois Unemployment Insurance Act establishes the eligibility rules for unemployment benefits. The Department of Employment Security administers the Illinois Unemployment Insurance Act and requires that claimants meet monetary and non-monetary rules of eligibility. In addition to requiring a sufficient amount of wages earned during a base period of employment, the Unemployment Insurance Act limits benefits to claimants who are unemployed through no fault of their own, look for available work and are available to accept suitable work according to their training.

Benefits Determination

If the Department of Employment Security determines a claimant is eligible to receive benefits, the Illinois Unemployment Insurance Act requires the department to consider any other available income a claimant is receiving. For Social Security retirement pay or pension payments, the department may reduce a claimant's weekly insurance benefits by one-half.

If the claimant receives retirement pension from an employer who paid the entire contribution without requiring him to contribute to the plan, Illinois law requires the department to reduce benefits by one-half. Furthermore, to be deductible from benefits, the claimant must be receiving pension payments from a base period employer. In other words, if the claimant's monetary eligibility is based on wage history from the employer funding the pension plan, the department will reduce benefits.

Reduction Formula

Illinois law reduces benefits using a formulaic calculation whereby the monthly pension payment is divided by 30 and multiplied by 7. If a base period employer contributed to the plan, the weekly total is further divided by one-half. The resulting total is the claimant's weekly benefit amount. However, if the pension is paid from an employer outside of the base period of employment (four of five calendar quarters before filing for unemployment), the department will not reduce a claimant's weekly payments.

Limitations

If an employee quits without good cause and receives early pension benefits before reaching retirement age, as established by the pension contribution program's rules, the department may deny benefits, since voluntary resignation without good cause is grounds for denial. Similarly, an employee who quits after reaching retirement age must have been terminated for lack of work or voluntarily resigned for good cause. Retirement is generally not considered a valid reason to terminate employment. However, an employee who terminated employment based on age discrimination in violation of the state and federal anti-discrimination in employment laws, he would be eligible for benefits. He must look for work and engage in an active work search while he receives weekly benefits.

Considerations

Since state laws can frequently change, do not use this information as a substitute for legal advice. Seek advice through an attorney licensed to practice law.

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