Appeal from the Circuit Court of Cook County; the Hon. Arthur
L. Dunne, Judge, presiding.
MR. JUSTICE CREBS DELIVERED THE OPINION OF THE COURT:
This case involves the manner in which Federal retirement benefits are to be considered in calculating "disqualifying income" pursuant to section 611 of the Unemployment Compensation Act (Ill. Rev. Stat. 1971, ch. 48, par. 441).
The plaintiff, John W. Benekos, voluntarily retired as an employee of the United States government on June 30, 1972. One week later, on July 7, 1972, the plaintiff filed a claim for unemployment benefits with the local office of the Division of Unemployment Compensation, Bureau of Employment Security, Illinois Department of Labor. In his claim, the plaintiff requested payment of benefits retroactive to July 2, 1972, based upon wages paid him during the base period ending December 31, 1971.
A claims deputy investigated the claim and determined that the plaintiff was ineligible for compensation. The basis for this determination was that "one half of the weekly amount of [the plaintiff's] retirement pension" constituted "disqualifying income" which exceeded the amount of benefits to which the plaintiff would otherwise be entitled. The plaintiff then filed a notice of appeal, seeking review of the deputy's determination by a hearing referee.
A hearing was held on August 31, 1972. Approximately one week later, on September 8, 1972, the referee handed down a decision affirming the determination of the claims deputy and denying the plaintiff benefits from July 2, 1972, through August 12, 1972, the period within the referee's jurisdiction. On appeal, the Department's Board of Review upheld the decision of the referee.
The plaintiff subsequently brought an action in the circuit court of Cook County to obtain administrative review of the Board's decision. The circuit court reversed the decision of the Board, ruling that the Board's decision was against the manifest weight of the evidence. The court further held that section 611(A)(2) of the Unemployment Compensation Act did not apply to the facts of this case. On appeal, the appellate court affirmed. (Benekos v. Cleary, 35 Ill. App.3d 68.) We have granted the defendants leave to appeal from the judgment of the appellate court.
The relevant statutory provision is section 611 of the Unemployment Compensation Act, which reads as follows:
"A. For the purposes of this Section `disqualifying income' means:
1. The entire amount which an individual has received or will receive with respect to a week in the form of a retirement payment (a) from an employing unit for which he performed services and which pays all of the cost of such retirement payment, or (b) from a trust, annuity or insurance fund or under an annuity or insurance contract, to or under which an employing unit for which he performed services pays or has paid all of the premiums or contributions; and
2. One-half the amount which an individual has received or will receive with respect to a week in the form of a retirement payment (a) from an employing unit for which he performed services and which pays some, but not all, of the cost of such retirement payment, or (b) from a trust, annuity or insurance fund or under an annuity or insurance contract, to or under which an employing unit for which he performed services pays or has paid some, but not all, of the premiums or contributions.
C. An individual shall be ineligible for benefits for any week with respect to which his disqualifying income equals or exceeds his weekly benefit amount. If such disqualifying income with respect to a week totals less than the benefits for which he would otherwise be eligible under this Act, he shall be paid, with respect to such week, benefits reduced by the amount of such disqualifying income." (Ill. Rev. Stat. 1971, ch. 48, par. 441.)
In ruling against plaintiff's claim for unemployment benefits, the hearing referee made express reference only to section 611(A)(2)(a). Apparently applying that subsection, the referee found that one-half of the plaintiff's weekly retirement pay, or $69 per week, must be considered disqualifying income. Since the plaintiff was otherwise eligible to receive only $51, it followed that he "was ineligible for benefits." The Board of Review affirmed the decision of the referee without referring to either subsection of section 611(A)(2). Therefore, although the defendants urge in the alternative that plaintiff's claim is barred through operation of section 611(A)(2)(b), we focus at the outset upon the applicability of section 611(A)(2)(a).
The plaintiff's position has consistently been that his initial retirement payments are solely a return of his own contributions. Accordingly, the plaintiff argues that his employer has not paid "some, but not all, of the cost" of such payments within the meaning of section 611(A)(2)(a). Accepting this argument, the appellate court stated:
"As we can see, the Illinois statute does not contain any language which refers to an individual who receives a pension under a employer-contributed plan. Rather, section 611 apparently looks to who pays the cost of each weekly payment. On its face, therefore, the Illinois statute is not applicable to the facts at bar. The evidence shows that the cost of each initial retirement payment received by plaintiff was borne by him alone from his individual retirement account. As long as plaintiff is receiving payments from this account, and is otherwise eligible for unemployment compensation benefits, section 611 would be inapplicable. When the funds in his individual account are depleted, ...