Appeals court says state can halt enhanced unemployment benefits

A decision issued Tuesday by the Indiana Court of Appeals is allowing the state to again stop the federal enhanced unemployment benefits that Gov. Eric Holcomb had tried to end in June because he thought the extra money was hurting the Hoosier economy by encouraging workers to stay out of the job market.

The unanimous appellate panel found the plaintiffs in the lawsuit had not shown a “reasonable likelihood of success at trial” and the Marion Superior Court, which issued the preliminary injunction that prevented the state from opting out of the federal program, had abused its discretion.

Plaintiffs, represented by Indiana Legal Services and Macey Swanson, had argued Indiana Code § 22-4-37-1 required the state to participate in the enhanced benefits that were coming through the Coronavirus Aid, Relief, and Economic Security Act program. They pointed to unique language in the statute which requires Indiana to participate, in part, in federal benefits conferred under the provisions of 42 U.S.C. 1101 through 1109.

The Marion Superior Court agreed and issued a preliminary injunction, which forced the state to restart the $300 extra weekly federal payments. The state also restarted its participation in a federal program that makes gig workers and the self-employed eligible for assistance for the first time and another that provides extra weeks of aid.

But the Court of Appeals held the state statute does not require participation in the CARES Act program.

The 16-page ruling notes the CARES Act benefits were conferred under different sections of the United States Code than those enumerated in the Indiana statute. Specifically, CARES Act unemployment benefits are conferred under 15 U.S.C. sections 9021, 9023 and 9025, which are not included in I.C. 22-4-37-1. The sections under 42 U.S.C. that are highlighted in the Indiana statute established the system for the federal treasury to hold monies and transfer them to the individual states for use in unemployment programs.

“When the CARES Act benefits were created, Congress chose to use the existing accounting system, that was already in place to direct federal funds to the States for use in the area of unemployment, to efficiently distribute funds for the CARES Act benefits,” Judge James Kirsch wrote for the court. “Utilizing this established accounting system and specifying how funds should be moved around and made available for distribution is entirely different from creating a new federal benefit program, which the CARES Act is.”

Holcomb had pushed to drop the state from the federal programs, which are scheduled to last until Sept. 6. He announced in May that Indiana would reinstate a requirement that those receiving unemployment benefits would again have to show they were actively searching for work as of June 1 and that the state would leave the federal programs effective June 19. At least 25 other states also decided to withdraw from the federal programs early.

Indiana stopped paying the extra benefits for several weeks before it was forced to resume making them by the courts.

The $300 payments more than double Indiana’s average $280 weekly unemployment payment, which has a maximum of $390 a week.

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22 thoughts on “Appeals court says state can halt enhanced unemployment benefits

    1. As scheduled now, yes. But, as with the eviction moratorium, there always seems to be a reason to extend these days, whether legal or not.

  1. The initial argument to stop the extra payments has been proven to be no longer valid. Some 22 state did stop the payments and they DID NOT get increased participation in the work force and still have the same labor shortages that the other 38 states that did not stop the program.

    The difference now is Indiana is just loosing out on millions of dollars of federal aid while we KNOW the economy will still suffers from the same low labor participation rate. Good job Republicans by hurting the small guy, hurting the state, but make a political point.

    1. Um, OK. How about the argument that paying unemployment to those who don’t want to work (your low labor participation reference) is an abhorrent waste of TAXPAYER dollars?!?! You seem to think millions of dollars in “federal aid” grows on trees. And, please don’t give me the “well, the aid is there so we should take it argument”….this is nothing but a waste of taxpayer dollars, another huge heap on the national debt, and a handout that promotes government dependence.

  2. What’s the matter with encouraging folks to fill jobs?
    Safety net is not a safety blanket to lay under all day.
    Government is not the answer, government is the problem.

  3. What’s excellent is now we can see the actual impacts, looking at the states who kept it versus those who cancelled it.
    Guess what!? Reducing unemployment benefits had no impact on employment, but sure increased the suffering of the poorest.
    Right on brand for the Indiana Republican FYIGM Party.

    1. CHARLES M. Hmmmm, so it sounds to me like, for you, this is just another government handout increase that you think should be permanent, and that has no relation at all to the availability of jobs. So the truth comes out – libbies never pass on a government handout and the opportunity to spend more hard earned taxpayer money! Here’s a concept – how about you take your money and put it to use helping the poor yourself? I do. And I’d be happy to do it more if the government stopped taking it from me and wasting it away. I guarantee you I’d be able to create much more the positive impact the government….I assume you could too.

  4. How in the world do you know in fact that the 22 states that stopped it….or however many there were….did not have an increase of those going back to work!? Really….you have studied it that much!!??

  5. The battle of having 47% of the country pay for the rest continues…

    Constant pull/push of the takers vs the makers.

    Sound decision by the court, even if the takers keep increasing…

  6. With an Indiana unemployment rate at 4.1% (when most economists consider between 3 – 3.5% to be full employment) the argument that a large number of people are staying home to collect the extra cash and that this is reason you can’t get your Subway sandwich or pizza delivered doesn’t hold water.

  7. The State should have postponed the re-start of the federal unemployment handout pending the outcome of their appeal, knowing that they might have to make it retroactive to the date of the Marion County Judge Hanley’s poor interpretation of Indiana Code. But, now that the handouts have been given, the State should withhold all unemployment benefits until the recipients pay it back. These decisions should go both ways.

  8. The Court of Appeals decision shows all that many dislike about lawyers, nit picking while people are denied a benefit that Congress intended them to have. When employers whine about not being able to fill jobs, no one asks them what they pay, what fringe benefits, if any they offer. So the whining is not news, just a partial report, nothing to make decisions upon. As for the extra money keeping people at home, there are no credible studies showing that to be true; it is just warmed over R talking points from the 1960s about the imaginary “welfare queens.”

  9. Funny how Rs ignore deficits and debt when they’re in power spending like drunken sailors, cutting taxes for the wealthy, heaping welfare in corporations. But benefits for the poor and struggling are a waste of taxpayer money.

  10. Welfare system has never been a good idea. It just makes people dependent on government and is hard to get out of. Because if you try to go back to work all the benefits cease. How about a plan that encourages people to get back to work instead of punishing them?

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