Ill. to refund debt recovered from retirement funds

March 29, 2012 3:14:36 PM PDT
The state of Illinois says it will refund money it took from the retirement checks of people who owe money to the city of Chicago and other local municipalities.

A new law allows for debt to be collected from payouts like income tax refunds. Still, the state says it will refund money it collected from people's retirement checks.

City officials say the scofflaws still owe money, but they should not have taken the money from pension checks.

Some at the city of Chicago scrambled Thursday to reverse debt recovered from retirees.

"There are hiccups as you implement new laws, and we are working with the state to make sure that this follows what it was intended to do," said Kathleen Strand, Chicago Department of Finance.

Two suburban retirees contacted ABC7 this week about money that was withheld from their monthly pension checks.

"I was shocked, because I didn't think no one could touch my pension," said retiree Clantcha Miller.

"It hurt me. It really hurt me. It was just like somebody took something away from me," said retiree Dora Green.

Green and Miller got the same letter informing them that a debt with the city of Chicago triggered $244 to be withheld from each of their state retirement checks.

"They got this idea that dealing with senior citizens is like taking candy from a baby," said Green. "But I'm a tough cookie. You're not going to take nothing from me too many times."

The women say they were told by the city they each had an unpaid red light ticket. They say their daughters got the tickets years ago, and they thought the tickets were paid -- until now.

"If you're going to be aggressive with me, tell me," Miller said. "I have no problem with it. If I owe you, I'm going to pay you. If I'm guilty, then I'll pay for the crime, but don't just sock it to me."

A new Chicago ordinance allows debt to be collected by the state. The city's finance spokeswoman apologized to the retirees and says the city did not intend to take money from retirement checks.

"We took immediate action to insure and worked with the state to make sure that truly this new law for the city only focuses on income tax returns," Strand said.

The state is in the process of refunding the money. The retirees are still responsible for the debt. But the city of Chicago is willing to work on payment plans to address the debt.