Court orders Indiana to reinstate pandemic-era federal unemployment benefits

An Indiana court is temporarily blocking Governor Eric Holcomb's order to end federal unemployment benefits pending a final decision on a case of unemployed in the state.
"Indiana should immediately notify the US Department of Labor of its continued participation in the CARES Act programs pending further action by this court," wrote Marion Superior Court Judge John Hanley on Friday.
The order comes after the state suspended benefits on June 19, which affects 236,000 unemployed people and costs the state $ 1.3 billion in federal funds allocated for the benefits.
Indiana is one of 26 states that have phased out or are planning to end certain extended unemployment programs this month and early next month. The federal expiry is September 6th.
Indiana Governor Eric Holcomb, wearing a face mask, speaks during a round table discussion at Catalent Biologics where COVID vaccine vials are bottled. (Photo by Jeremy Hogan / SOPA Images / LightRocket via Getty Images)
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The lawsuit against the state, filed earlier this month by law firm Indiana Legal Services (ILS) and MaceySwanson Hicks & Sauer, alleges that early termination of services "would cause irreparable harm to individual customers."
"These benefits have provided life-sustaining and vital aid to many Hoosiers during the pandemic," ILS Executive Director Jon Laramore said in a statement this month. "Legislature has passed a bill giving entitlement to these benefits, and we are asking Governor Holcomb to obey the bill."
The challenge to Governor Eric Holcomb's decision was based on Indiana Law 22-4-37-1, which requires the state to "provide citizens with all available federal insurance," the organizations said in a statement.
The benefit cut includes the additional $ 300 in weekly benefits, the Pandemic Unemployment Assistance (PUA) program for workers who are normally not eligible for unemployment, and the Pandemic Emergency Unemployment Compensation (PEUC) program, which offers additional weeks of benefit.
"Indiana Indiana law recognizes the importance of these benefits," the court ruling said. "Indiana law requires acceptance of these benefits."
In May, lawmakers including Sens. Ron Wyden (D-OR) and Bernie Sanders (I-VT) urged the Minister of Labor to find a way to pay benefits to PUA recipients, Sanders lettering noted that it is a "congress-like" mandatory requirement. "
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In the 26 states that are opting out of programs early, more than 4 million workers will be cut by at least $ 1,200 per month in benefits, which the Century Foundation estimates will lose a total of $ 22.1 billion in potential benefits . Almost 3 in 5 workers affected by the early expiration are left with no benefits whatsoever.
"Kudos to Judge Hanley for advocating the unemployed and the state's legal mandate to save unemployed people in dire need," Andrew Stettner, Unemployment Insurance Expert and Senior Fellow at the Century Foundation, told Yahoo Money.
The Yahoo Money sister site Cashay has a weekly newsletter.
Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova
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