Indiana sued over the cancellation of federal unemployment programs

Two legal organizations in Indiana are suing the state for the governor's decision to opt out of the federally-funded pandemic unemployment programs.

Indiana Legal Services (ILS) and MaceySwanson Hicks & Sauer law firm have filed a joint lawsuit against the state claiming that ending the benefits would "cause irreparable harm to individual clients."

"These benefits have provided life-sustaining and crucial assistance to many Hoosiers during the pandemic," Jon Laramore, executive director of ILS, said in a statement on Tuesday. "The legislature passed a law creating a right to these benefits, and we’re asking Governor Holcomb to follow the law."

The challenge to Governor Eric Holcomb's decision is based on Indiana law 22-4-37-1 that requires the state to "procure all available federal insurance benefits to citizens," the organizations said in a statement.

Indiana is one of the 25 Republican-led states eliminating or planning to eliminate certain unemployment programs this month and early next month. Alaska, Iowa, Missouri, and Mississippi canceled their programs on Saturday. The federal expiration is September 6.

Indiana plans to cut off benefits June 19, affecting 236,000 jobless workers and costing the state $1.3 billion in federal money that was allocated for the benefits.

That included the extra $300 in weekly benefits, the Pandemic Unemployment Assistance (PUA) program for workers who don’t normally qualify for unemployment, and the Pandemic Emergency Unemployment Compensation (PEUC) program that provides extra weeks of benefits.

"ILS makes a compelling argument that the Governor's actions violate the directive of Indiana state law to protect the unemployed," Andrew Stettner, an unemployment insurance expert and senior fellow at the Century Foundation, told Yahoo Money. "I hope the court will swiftly put a temporary injunction in place to maintain benefits."

In May, lawmakers, including Sens. Ron Wyden (D-OR) and Bernie Sanders (I-VT), urged the labor secretary to find a way to pay benefits to PUA recipients, with Sanders noting that it's a “congressionally-mandated requirement,” in a letter.

In the 25 states, more than 4 million workers will see their benefits slashed by at least $1,200 a month in June or early July, losing a total of $22.1 billion in benefits, according to estimates by the Century Foundation. Nearly 3 in 5 workers affected by the early expiration in the 25 states will be left with no benefits at all.

"This pandemic has been tough on everyone and we’re not out of the woods yet," Jeffrey Macey, partner at Macey Swanson Hicks & Sauer and co-counsel for the case, said in a statement. "A saving grace for many of my clients has been the expanded unemployment benefits offered by the federal government."

Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova

Read more:

  • Some workers finally have the upper hand in the job market

  • Many taxpayers are still waiting to get last year’s tax refund

  • America has 'two completely different systems' when supporting unemployed workers

  • Read more personal finance information, news, and tips on Cashay

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and Reddit.

Source: Read Full Article