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Millions Lost Federal Unemployment Benefits On Labor Day Here’s What Happened
On Labor Day, the expanded unemployment benefit programs rolled out for COVID-19 expired. Those temporary programs included the $300 weekly bonus checks as well as assistance for those who are normally ineligible for unemployment insurance, such as gig workers and the long-term unemployed. More than 11 million people were affected by the cutoff, and roughly;7.5 million people have now lost their benefits entirely. What’s worse is that many didn’t find out they were no longer eligible until after their coverage ended.;
Roughly two dozen states had already stopped the emergency federal programs early over the summer. Out-of-work residents in several states took legal action to try to get their benefits reinstated, arguing that without the aid they were unable to pay basic expenses, including rent and food. Governors fired back, claiming the extra unemployment insurance was discouraging people from taking available jobs.;
Yet;various studies have confirmed;that the thing holding back labor market recovery was not unemployment insurance, but the fact that many workers had safety concerns or family care responsibilities. And that continues to be the case in the COVID-19 era, especially with the uptick in;delta-variant;cases. Still, the White House does not plan to renew those benefits.;
Which Federal Unemployment Programs Expired
At the very start of the pandemic, the March 2020 CARES Act established temporary federal unemployment aid programs to help those who lost their jobs due to COVID-19. The American Rescue Plan in March 2021 extended the emergency programs to last until Labor Day this year.;
The first program was Federal Pandemic Unemployment Compensation, the weekly bonus — $600 per week at first, then $300 per week — that helped out-of-work Americans supplement benefits and recover some lost wages. Another was Pandemic Emergency Unemployment Compensation, or PEUC, which extended aid to those who had already exhausted their state’s benefits period . The other was Pandemic Unemployment Assistance, or PUA, which covered self-employed workers and freelancers not typically eligible for aid.;
A later stimulus package created another program called Mixed Earners Unemployment Compensation, which offered $100 per week extra for those workers whose labor was split between being an employee and an independent contractor.;
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Stimulus Update: Other States May Reinstate Jobless Benefits After Workers Sue Indiana Governor Over Unemployment Claims
- Luke Kenton
- 15:27, 28 Jun 2021
STATES across the US may be forced to reinstate pandemic unemployment benefits after workers successfully sued the Governor of Indiana for ending the federal aid scheme early.
Indiana is among 26 Republican-led states that opted to prematurely end the enhanced benefits this summer, ahead of their official expiration on September 6.
Read our stimulus checks live blog for the latest updates on Covid-19 relief…
The benefits -which include $300 weekly bonus checks and coverage for freelance workers – have been widely criticized by GOP lawmakers who’ve claimed the generous payments have discouraged many from returning to the workforce.
Despite such claims, job searches haven’t increased in any of the 22 states that have already ended the aid.
While the White House has insisted that states are free to make their own decisions as to whether they accept the funds, the states that have rejected them may be forced to reverse course.
It comes after a group of jobless residents in Indiana sued Gov. Eric Holcomb over his order to cease the payments from June 19.
Indiana Legal Services and Macey Swanson Hicks & Sauer, a private employment law firm, argued that the move violates a state law that requires Indiana to “procure all available federal insurance benefits to citizens.”
In his ruling on Friday, Judge John Hanley said that a “preponderance” of evidence outlines that the governor has violated state law.
More Details About States Ending Jobless Benefits
States have a limit on how many weeks a person can stay on unemployment. Most provide 26 weeks, with some granting as few as 12 weeks and others as many as 30 weeks. Before the;American Rescue Plan, the federal government had extended pandemic relief benefits to the unemployed an additional 24 weeks. Under the current package, federal unemployment insurance will be extended through Labor Day, offering a total of 53 weeks of additional benefits except for states opting out.;
While many states have automatically renewed unemployment insurance benefits, some recipients may have issues when they reach the;benefit year-ending date. States limit benefits to one year, and that compensation is typically cut off after that date. Many states require recipients to either file a new claim or request an extension. Because it varies from state to state, those who have been unemployed for at least a year should get in contact with their states labor department.;
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Indiana Delays Reinstating $300 Federal Unemployment Benefits Despite Judge’s Ruling
Indiana State Capitol in Indianapolis.; File.
Indiana State Capitol in Indianapolis.; File.
INDIANAPOLIS Indianas Department of Workforce Development said Wednesday that it still hasnt 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.
An agency spokesperson declined to comment on if or when the state plans to rejoin the programs that expanded unemployment benefits during the COVID-19 pandemic. It could still be nearly three weeks before a judge rules on Gov. Eric Holcomb’s appeal;to drop Indiana;from the national programs before theyre scheduled to end on Sept. 6.
Attorneys for the state maintain Indiana cant continue paying out the benefits because the state has already ended its agreement with the federal government to administer the federal programs.
Entering into a new agreement would require the workforce development office to expend extra time and resources to rework its information technology system,” according to court documents. The state also argued that Indiana would not have time to withdraw from the federal programs again should the appeals court rule in the state’s favor.
Indiana also ended its participation in a federal program that made gig workers and the self-employed eligible for assistance for the first time and another that provides extra weeks of aid.
White House Response To States Ending Unemployment Before The Cutoff
Labor Department officials say their hands are tied;and cant counter decisions by state governors to stop participation in the national unemployment programs.;
Moreover, White House officials have indicated they will not continue the enhanced jobless benefits past September in the other states, saying they were intended to be temporary. In his latest speech on;, Biden underlined that it makes sense for those supplemental unemployment benefits to expire in 90 days.;
In remarks on the economy last month, Biden had reaffirmed the guidelines for receiving federal unemployment insurance: Were going to make it clear that anyone collecting unemployment who is offered a suitable job must take the job or lose their unemployment benefits.;According to the Department of Labor, if you turn down a suitable job, you can be denied unemployment benefits: You must be able, ready and willing to accept a suitable job.;
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Could Pandemic Benefits Be Renewed
White House officials made it clear they were not planning to continue the enhanced jobless benefits past the Labor Day expiration, saying they were intended to be temporary. When states began pulling out of pandemic-era unemployment programs early,;Labor Department officials;said their hands were tied and that they couldn’t counter decisions by governors.;
Meanwhile, given the uncertainties of COVID-19, new quarantine restrictions could be imposed, which could lead to more layoffs. President Joe Biden has passed the buck to the states, telling governors they can use recovery funds to help those struggling with unemployment.;
According to an Aug. 19;letter by Labor and Treasury Department officials, states can use $350 billion of pandemic funds that Congress allocated in the American Rescue Plan to continue paying unemployed workers. The letter says that in areas where unemployment remains high, “it may make sense for unemployed workers to continue receiving additional assistance for a longer period of time,” which would allow those individuals to find a job.;
It’s not clear at this time which states will choose to use any leftover pandemic funds to continue jobless benefits. According to a;CBS News report, not every state has shut the door to continuing some benefits, with some local officials reviewing options for providing assistance after the Labor Day expiration.;
Indiana Paying Out Millions In Retroactive Federal Unemployment Benefits After Court Order
INDIANAPOLIS Indiana paid out 25,000 claims for federal unemployment benefits in the first day after reinstating them due to a court order.
The state said around 120,000 people lost those benefits after Gov. Eric Holcomb ordered they be stopped as he moved to end Indiana’s participation in the federal CARES program.
A Marion County judge ordered the state to temporarily continue the benefits in June. Then an appeals court confirmed that judge’s order July 12.
The Indiana Department of Workforce Development said it had been working with the U.S. Department of Labor since the Marion County judge’s order to get the payments restarted.
Those began again July 15, and DWD said 25,000 had already been processed for more than $30 million. Those benefits include the $300 weekly add-on, Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation . Payments for those will be retroactive to the week ending June 26. The final payment after the governor’s order had been made, went out the week ending June 19.
Workers who have since found employment will still receive retroactive payments for claims filed for the weeks they were unemployed. If the courts later rule Holcomb can end the federal unemployment benefits in Indiana, no money will need to be paid back from anyone already receiving a payment.
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Indiana Says It Cannot Reinstate Extra Unemployment Benefits
- Ted O’Neil | The Center Square contributor
A sign advertising for jobs sits along the roadside outside a FedEx location in Zionsville, Ind., Thursday, April 2, 2020.
;Despite a judges ruling that Indiana must continue paying $300 in weekly federal unemployment benefits to residents who qualify, the state says there is no way for it to opt back into the program.
Indiana Gov. Eric Holcomb in May said the state would stop participating in the federal payments as of June 19. Indiana Legal Services, a nonprofit law firm based in Indianapolis that provides free legal services to low-income residents, filed for an emergency injunction to continue the payments.
In a statement last week, the Indiana Department of Workforce Development said it is determining how to proceed because the federal programs in Indiana no longer exist after their termination on June 19.
Holcombs administration has also filed an appeal over Hanleys ruling.
President Joe Biden has said the weekly payments, on top of state unemployment payments, are scheduled to end Sept. 6.
Roughly 4 million Americans currently qualify for the extra money. There are also many who have been receiving the money who do not qualify for state unemployment benefits, including those who are referred to as gig workers such as ride share drivers and freelancers as well as people who have been unemployed more than six months.
Weve been in contact with the state and were watching this unfold very closely, he said.
How Many People Lost Federal Benefits On Labor Day
Apart from the millions of workers in states that discontinued federal unemployment aid early, more than;3 million additional people;who were getting the weekly $300 bonus lost it on Labor Day. If they’re still eligible to collect state unemployment insurance , they’ll continue to receive some compensation. But that compensation will return to pre-pandemic benefit levels, which is a significantly lower amount.;
In addition, around 7.5 million people were entirely cut off when the temporary pandemic unemployment programs expired, considered the largest cutoff of unemployment benefits in US history. Here’s how it breaks down, according to a detailed analysis of Labor Department data by the Century Foundation.;
- 3.3 million people covered by PEUC:;This category includes workers who would have no longer been eligible to receive unemployment because they passed their state’s benefit window . The program provided up to 53 weeks of additional aid for those who had exceeded state allowances.
- 4.2 million people covered by PUA:;This category includes workers who do not normally qualify for any form of federal or state unemployment compensation, including freelancers, gig workers, independent contractors and part-time workers. During the pandemic, the program also supported those who couldn’t work because they were taking care of a dependent.;
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Lawsuit Seeks To Force Louisiana To Keep Paying $300 Federal Unemployment Benefits
New unemployment claims in Louisiana recovered after an unexpected spike.
A group of unemployed Louisiana residents filed a lawsuit Friday night challenging Gov. John Bel Edwards decision to stop accepting the federal $300-a-week boost to jobless benefits, arguing that the move violates state law and asking the courts to reinstate the payments immediately.
Louisiana on Saturday ended its participation in three of the federal governments pandemic unemployment programs, cutting off jobless benefits for more than 150,000 residents and slashing payments in half for thousands more who remain out-of-work amid a worsening COVID-19 surge.;
The benefits were made available by Congress until Sept. 6, but Edwards, a Democrat, ordered Louisiana to stop accepting the federal payments effective July 31 in exchange for support from GOP lawmakers and business groups for a permanent $28 hike to the states weekly unemployment benefits, beginning in January 2022.
The lawsuit asserts that Edwards decision violated state unemployment statutes, which compels state officials to secure available federal unemployment compensation for their jobless citizens.
That argument mirrors those made in lawsuits lodged in several other states where federal payments were cut off early including Indiana and Maryland. Judges there recently ordered the federal jobless benefits be reinstated.;
Indiana Was Forced To Reinstate Boosted Unemployment It’s Now Fighting That Ruling
by Maurie Backman | July 21, 2021
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Indiana is intent on pulling boosted jobless benefits — even if that means engaging in a legal battle.
When the American Rescue Plan — the relief bill that put $1,400 stimulus checks into millions of bank accounts — was signed back in March, jobs were still pretty difficult to come by. Plus, at the time, coronavirus vaccines weren’t yet widely available, and so many jobless workers were facing safety concerns that were preventing them from re-entering the labor force.
As such, that relief bill called for a $300 weekly boost to unemployment benefits through the beginning of September. The logic was that the extra money would help people stay afloat until the labor market opened up and vaccines became easier to get.
In recent months, 26 states have attempted to pull the plug on boosted unemployment benefits ahead of schedule. Their reasoning was that the extra money was keeping too many people from getting back to work, causing businesses to grapple with labor shortages. This logic especially applied to lower-wage workers, who may, indeed, have been collecting more money on unemployment than what they’d get at an actual full-time job.
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Court Orders Indiana To Reinstate Pandemic
A court in Indiana is temporarily blocking Governor Eric Holcomb’s order to end federal unemployment benefits programs until a final ruling is made in a case brought by jobless workers in the state.
“Indiana should notify the U.S. Department of Labor immediately of its continued participation in the CARES Act programs pending further action by this Court,” Marion Superior Court Judge John Hanley wrote on Friday.
The order comes after the state cut off benefits on June 19, affecting 236,000 unemployed workers and costing the state $1.3 billion in federal money that was allocated for the benefits.
Indiana is one of 26 states that eliminated or plan to eliminate certain expanded unemployment programs this month and early next month. The federal expiration is September 6.
The suit against the state was filed by Indiana Legal Services and MaceySwanson Hicks & Sauer law firm earlier this month, claiming that canceling the benefits early 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 this month. “The legislature passed a law creating a right to these benefits, and were asking Governor Holcomb to follow the law.”
“Indiana Indiana law recognizes the importance of these benefits,” the court decision read. “Indiana law requires the acceptance of these benefits.”
Mixed Earner Unemployment Compensation Details To Know
For the first time, the original CARES Act;in early 2020 allowed some self-employed workers to temporarily qualify for unemployment benefits. The December 2020 stimulus bill had added additional compensation for someone earning a mixed income from a traditional job and employment as a contractor, who would either receive the unemployment insurance payment or PUA, but not both.;
With the Mixed Earner Unemployment Compensation program, a person who made substantial income from self-employment or a contracting job could receive an extra $100 a week. MEUC was also extended with the American Rescue Plan Act until Sept. 6, though some states are bowing out of that aid as well.;
For example, lets say you made $50,000 in 2019, which was split between $30,000 from a contractor job and $20,000 from a part-time job at a company. If you were laid off, the state unemployment office would calculate whether youd receive benefits for the $30,000 via PUA or $20,000 via unemployment insurance, but not a combination of the two.;
Though someone who works a traditional job and makes $50,000 a year in New York would receive $480 a week from unemployment insurance, by having a mix of the two youd get the greater of the two different amounts, which would be the PUA of $288 a week rather than the $280 from unemployment.;
Mixed Earner Unemployment Compensation will now give that person an extra $100, but only if the state participates.;
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