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Indiana restarts payment of federal unemployment benefits

July 16, 2021 GMT
FILE - In this Sept. 2, 2020, file photo, a help wanted sign is displayed at a car wash in Indianapolis. Indiana’s Department of Workforce Development said Wednesday, July 7, 2021 that it still hasn’t decided how to continue payment of federal unemployment benefits more than a week after a judge ruled that the state must restart the extra $300 weekly payments to unemployed workers. (AP Photo/Michael Conroy, File)
FILE - In this Sept. 2, 2020, file photo, a help wanted sign is displayed at a car wash in Indianapolis. Indiana’s Department of Workforce Development said Wednesday, July 7, 2021 that it still hasn’t decided how to continue payment of federal unemployment benefits more than a week after a judge ruled that the state must restart the extra $300 weekly payments to unemployed workers. (AP Photo/Michael Conroy, File)

INDIANAPOLIS (AP) — Indiana on Friday resumed making $300 federal unemployment payments to workers affected by the coronavirus pandemic after a court ordered it to do so.

The state Department of Workforce Development issued 25,000 payments totaling more than $33 million on Friday and expects to make thousands of additional payments in the coming days, Regina Ashley, the agency’s chief unemployment insurance and workforce solutions officer, said during a news conference.

The payments are the first to be paid since mid-June and will be retroactive to the work week that ended June 25, meaning there won’t be a gap in benefits for eligible claimants, she said.

They come more than a month into a legal battle over the state’s participation in federal programs that expanded unemployment benefits during the pandemic.

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In addition to resuming the $300 payments, officials said the state has 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.

Republican Gov. Eric Holcomb, who has pushed to drop the state from the federal programs before they’re scheduled to end on Sept. 6, 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.

Marion Superior Court Judge John Hanley granted a preliminary injunction in an ongoing lawsuit filed June 14 by two legal organizations, ruling that the state must temporarily resume participation in the federal government’s programs that provide unemployment benefits during the pandemic.

In his order, Hanley said Indiana’s decision to leave the federal program early violates state law, adding that the unemployment benefits are “instrumental in allowing Hoosiers to regain financial stability at an individual level while the state continues to face challenges presented by the COVID-19 pandemic during its return to normalcy.”

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The state attorney general’s office asked the Indiana Court of Appeals to quickly stay Hanley’s order, arguing that the state couldn’t continue paying the benefits because it had already ended its agreement with the federal government to administer the federal programs. The state also argued that it wouldn’t have time to withdraw from the federal programs again should the appeals court rule in its favor.

But the appeals court upheld Hanley’s order on Monday.

State officials have not said whether they will next ask the Indiana Supreme Court to consider the preliminary injunction. Should it do so and prevail in the higher court, though, claimants wouldn’t be asked to return payments, said Fred Payne, the head of the Department of Workforce Development.

The $300 checks have more than doubled Indiana’s average $280 weekly unemployment payment, which has a maximum of $390 a week, according to the state agency. The changes cut off or reduced unemployment benefits to around 120,000 people in the state during the hiatus, Ashley said.

Holcomb and other state leaders have maintained that jobs are available around the state, and that ending the benefits early would help businesses find and hire qualified employees for thousands of open positions. Supporters of the federal payments say they’ll help workers get by while looking for good jobs and that businesses should offer better pay and benefits to attract workers.

Payne said Friday that Indiana’s unemployment rate stood at 4.1%, which is down from the pandemic peak of 16.9% a year earlier.

The state has paid out roughly $8.6 billion in unemployment benefits to about 875,000 Hoosiers since March of 2020, Payne said. The average claimant received approximately $10,600 in benefits.

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Casey Smith is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.