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02/12/87 Loren Vaught, v. the Department of Labor Et

February 12, 1987

LOREN VAUGHT, PLAINTIFF-APPELLEE

v.

THE DEPARTMENT OF LABOR ET AL., DEFENDANTS-APPELLANTS



APPELLATE COURT OF ILLINOIS, SECOND DISTRICT

504 N.E.2d 250, 152 Ill. App. 3d 340, 105 Ill. Dec. 381 1987.IL.163

Appeal from the Circuit Court of Winnebago County; the Hon. Robert C. Gill, Judge, presiding.

APPELLATE Judges:

JUSTICE WOODWARD delivered the opinion of the court. LINDBERG, P.J., and INGLIS, J., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE WOODWARD

Plaintiff, Loren Vaught, filed for unemployment compensation after termination of his employment. Although it was determined that plaintiff was eligible to receive unemployment insurance benefits, a claims adjuster found that plaintiff received $806 a month in social security and that 50% of that was disqualifying income. Accordingly, plaintiff's weekly unemployment insurance benefit was reduced by $94. Plaintiff appealed the claims adjuster's decision. Following a hearing, the referee affirmed the decision of the claims adjuster, which was in turn affirmed by the Board of Review of the Illinois Department of Labor. Thereafter, plaintiff filed a complaint for administrative review in the circuit court of Winnebago County. The circuit court reversed the decision of the referee. The defendants appeal.

On January 25, 1983, at the hearing before the referee, plaintiff testified that he had worked as an operator of engineers for 35 years prior to being "laid off" on June 25, 1982. At that time, plaintiff was 72 years of age. He received $794 a month from social security, after a deduction for Medicare was made from the total monthly social security payment of $806.20. The referee affirmed the determination of the claims adjuster that under section 611(2) of the Illinois Unemployment Insurance Act (Ill. Rev. Stat. 1983, ch. 48, par. 441(2)) (hereinafter referred to as the Act), 50% of plaintiff's social security payments was disqualifying income. On April 29, 1983, the Board of Review affirmed the referee's decision. On June 2, 1983, plaintiff filed a complaint for judicial review of the Board of Review's decision. On April 3, 1986, the circuit court issued an order finding that the decision of the Board of Review was contrary to the manifest weight of the evidence and reversed its decision. This appeal followed.

Defendants contend that the Department of Labor correctly found 50% of plaintiff's social security payments to be disqualifying income under section 611(2)(b) of the Act because social security old age benefits are retirement payments from a trust. (Ill. Rev. Stat. 1983, ch. 48, par. 441(2)(b).) Plaintiff argues that section 611 only disqualifies retirement pay, and that since plaintiff had not retired, but was terminated and is an active part of the labor market, section 611 is inapplicable.

An unemployed person is eligible for unemployment insurance benefits if, inter alia, he is actively seeking work. (Ill. Rev. Stat. 1983, ch. 48, par. 420.) However, disqualifying income offsets unemployment insurance benefits under section 611 of the Act, which provides as follows:

"For the purposes of this Section 'disqualifying income' means:

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 employment 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.

3. Notwithstanding paragraph 1 and 2 above, the entire amount which an individual has received or will receive, with respect to any week which begins after March 31, 1980, of any governmental or other pension, retirement, or retired pay, annuity or any other similar periodic payment which is based on any previous work of such individual. This paragraph shall be in effect only if it is required as a condition for full tax credit against the tax imposed by the Federal Unemployment Tax Act.

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.

D. To assure full tax credit to the employers of this State against the tax imposed by the Federal Unemployment Tax Act, the Director shall take any action as may be necessary in the administration of paragraph 3 of subsection A of this Section to insure that the application of its provisions conform to the requirements of such Federal Act as interpreted by the United States ...


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