The Illinois Department of Employment Security (IDES) may say you were paid too much in unemployment benefits, and make you repay them.
Two examples where you have to repay the unemployment benefits are:
- The amount of unemployment benefits you received was more than what you should get, and
- Your former employer disagreed with your claim for unemployment benefits.
If IDES says you were overpaid benefits, you will receive a Notice of Reconsidered Determination and Recoupment Decision. The notice will state the amount that IDES believes you were overpaid, and the reason for the overpayment. IDES has the right to collect the overpaid amount from you.
Collection of an overpayment
In the Notice of Reconsidered Determination and Recoupment Decision, IDES will ask you pay it back. You do not have to agree to do so, and do not have to sign anything they send to you. If you disagree with the decision, you should wait until you have exhausted your appeal(s) before paying back the alleged recoupment.
IDES may try to get you to agree to repay the debt voluntarily by signing a contract. You do not have to agree to this, and are not advised to do so, because by doing so you are granting IDES more time to get the money from you, from 5 to 10 years.
If you do decide that you want to voluntarily pay off the recoupment amount, but find that you cannot pay the entire amount at once, you can ask IDES if you can pay the debt in installments.
To make an installment agreement, you will need to talk with IDES' Benefit Overpayment Collection at (800) 245-9762.
Recoupment of benefits
If you do not agree to voluntarily repay the amount, IDES may recoup the overpayment by keeping up to 25% of any future unemployment benefits you receive until the total amount is paid.
Normally, IDES has only 5 years to collect those benefits. That deadline begins running from the date it found you were ineligible for benefits you received.
For example, if the Agency found that on January 1, 2015 you were ineligible for benefits you previously received, it would have until December 1, 2020 to collect that overpayment. If you applied for unemployment benefits in 2021, the Agency could not keep any of that money to cancel out the recoupment amount.
If IDES withholds part of your subsequent unemployment benefits, you may request a recoupment waiver from IDES. In order to be given a waiver, you must show that you did not provide any false information or keep any information from IDES.
You must also show that you will suffer financial hardship if you have to pay. This means that if you made the payment, you would not be able to afford food, medicine, housing, or another necessity. The request must be made before payment is due.
Exception to the 5-year deadline
The exception to this 5-year deadline is if IDES determines that the overpayment occurred because you lied to the Agency or failed to disclose an important fact (such as you earned income while collecting unemployment).
In that case, IDES faces no deadline to recoup those payments and it can withhold the entire amount of your benefits. Further, you will be penalized by being ineligible for unemployment benefits for up to 26 weeks or for 2 years from the date you first committed fraud.
Also, the amount of benefits you otherwise would have received during this period do not cancel out the recoupment amount. If you are eligible for benefits after the penalty period, IDES may keep all of your benefits until the debt is fully paid, and you may not be eligible for a recoupment waiver.
IDES may also file a lawsuit against you in court to collect the overpayment amount. The same deadlines apply. IDES has 5 years to file suit if there was no fraud, but has no deadline if fraud is involved.
Finally, IDES may seek repayment through your income tax returns (the same deadline applies).
Updated: November 2016