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.