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Indiana Reverses Decision To Suspend Unemployment Benefits

By Brandon Smith

Posted February 27, 2013

Update 7:08 p.m.

The Indiana Department of Workforce Development says it is reversing its earlier decision to suspend federal unemployment benefits.

"In response to the State of Indiana's request for additional guidance, late this afternoon the U.S. Department of Labor confirmed that unemployment benefits will not be impacted by sequestration through the week ending March 9, and additional guidance will be forthcoming," Department of Workforce Development Commissioner Scott Sanders said in a press release.

Workforce Development said  earlier Wednesday it would suspend federal unemployment benefits because of cuts expected to be a part of the federal sequestration. Those cuts would go into effect if Congress does not reach a budget deal by Friday.

Shortly after the state made its announcement, the Labor Department requested the state reverse its decision. Indiana officials say they will now proceed with full payment of extended unemployment compensation until further notice.

Original Post: 4:35 p.m.

Hoosiers who have received 26 weeks or more of unemployment benefits will see their checks withheld beginning Saturday. State officials say federal sequestration is to blame.

With the status of the automatic federal spending cuts known as sequestration undecided, the Indiana Department of Workforce Development on Wednesday announced all federal unemployment benefits, money the federal government gives to fund weeks 27 through 63 of unemployment, will be temporarily suspended. That is roughly 32,000 Hoosiers who will not receive checks.

"If we pay folks too much money, we have to then go ask an unemployed person, ‘By the way, we need more money back from you,' because federal law says if we pay you more than what you're supposed to get, we have to retrieve that money," says Workforce Development spokesman Joe Frank.

He says Indiana has received no guidance from the federal government.

Since the announcement was made, the U.S. Department of Labor has asked the Department of Workforce Development to remove the suspension notice until receiving further guidance from the federal government, a spokesman says

But Workforce Development has not indicated it will reverse its decision, and Frank emphasizes the suspension is temporary.

"If the federal government tells us in the next how many ever days, whatever, that this is what's going to happen, this is what we expect, we have the type of computer system we can turn this around really quickly," he says.

Frank says if the state receives information on extending federal benefits, checks could go out within days.

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