Illinois to stop paying unemployment benefits through debit cards and start issuing checks

Illinois residents who are out of work soon will no longer be able to use state-issued debit cards to collect their unemployment insurance benefits.

Starting Dec. 27, claimants will begin receiving benefits through paper checks instead of debit cards, the Illinois Department of Employment Security announced Monday.

Those collecting their benefits through a direct deposit option will be able to continue using that method, IDES said in a statement.

IDES’ debit card vendor, KeyBank, decided to stop providing the cards for unemployment recipients, though the statement from the state agency did not say why. A spokesperson for KeyBank declined to comment.

The policy change comes as IDES has struggled during the COVID-19 pandemic to cope with demand and amid reports of fraud that caused some claimants to experience delays in receiving payments or not receive their benefits at all.

IDES has previously told the Tribune that it has worked “vigilantly” to combat fraud, while also saying federal officials should provide states with better tools. The agency has also said that efforts to block fraud can unintentionally lead to delays in payments or the outright rejection of benefits to legitimate filers.

This summer, Senate Republicans, a superminority in the Illinois General Assembly, called for a broader state audit of IDES and accused Democratic Gov. J.B. Pritzker’s administration of not being forthcoming about the problems.

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People making claims will have access to their remaining funds through the debit cards until the cards expire, IDES said Monday, but no more payments will be made to those cards beginning Dec. 27.

“Claimants who currently receive benefit payments via debit card are strongly encouraged to switch to direct deposit,” IDES said in a statement. “Doing so will result in quicker access to benefit payments.”

Step-by-step instructions on switching to direct deposit can be found in the Direct Deposit Guide on the IDES website at