Indiana restarts federal unemployment payments while court battle plays out

The Indiana Department of Workforce Development resumed processing federal unemployment benefits this week — amid ongoing legal battles — and more than 25,000 claimants have received payments in the past day, the agency said Friday.

Fred Payne, DWD commissioner, and Regina Ashley, chief unemployment insurance and workforce solutions officer, said Indiana has restarted paying the $300 weekly add-on federal unemployment payments and other federal benefits that were cut off late last month. The DWD said those who have remained unemployed since federal payments were cut off will begin receiving back payments.

“We want to make sure we are paying every individual the benefits they deserve,” Payne said.

The extra unemployment benefits from the federal government were ended by Indiana on June 19, almost three months earlier than when the benefits were set to expire, on Sept. 6. Indiana was among 27 states that terminated early at least one of the three pandemic unemployment insurance programs that Congress enacted in March 2020 to support workers affected by the coronavirus pandemic. It was Indiana Gov. Eric Holcomb’s solution to getting people back to work, he said at the time of the announcement.

That decision was challenged in court by two law firms representing federal benefits recipients. A Marion Superior Court judge ordered the state to continue to pay the benefits while the lawsuit continues, and that action was affirmed by the Indiana Court of Appeals this week.

The state did not immediately resume the benefits following the court order, and payments had been in limbo for the past three weeks.

Payne said DWD began working with the U.S. Department of Labor as soon as the judge’s order was issued June 25, and it took weeks to sort out details on how to restart the benefits. The department was not waiting on the ruling on the appeal to restart, he said.

About 120,000 individuals were filing for the federal payments when they were halted last month, Ashley said.

If the state does prevail in its court battle on whether it had the right to end the benefits early, individuals who received the benefits will not have to pay the money back, Payne said.

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

Holcomb said ending the benefits early would help Indiana businesses find and hire qualified employees for thousands of open positions.