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Judge rules in Iowas favor over termination of CARES Act unemployment benefits

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(The Center Square) – A federal judge dismissed a lawsuit filed by two women over IOwa officials’ decision to end federal pandemic unemployment benefits before their expiration date.

Gov. Kim Reynolds ended the unemployment programs on June 12, 2021, based on a recommendation from Beth Townsend, executive director of Iowa Workforce Development. The programs were set to expire on Sept. 4, 2021, but states had the option of ending them early.

Plaintiff Karla Smith was receiving $408 per week in Pandemic Emergency Unemployment Compensation, also known as PEUC, which was given to unemployed workers who had exhausted their state unemployment benefits. Holly Bladel was receiving Pandemic Unemployment Assistance, a program for workers laid off due to the pandemic, and Federal Pandemic Unemployment Compensation, an extra $600 added to unemployment benefits.

The women said in the lawsuit filed in May 2023 that they had a “property interest” in the unemployment compensation based on information stating the benefits would not expire until Sept. 4. The decision to end them “was a deprivation of property without due process and a taking without just compensation,” they said.

Judge Stephanie M. Rose disagreed.

“Plaintiffs’ conclusory assertion that this created an entitlement ‘for a set period of time’ is not supported,” Rose said in the decision. “If every eligible recipient who received the letter had a property interest, then the discretion given to state official by the CARES Act would be without effect.”

The plaintiffs also did not file the case in a timely manner, Rose said.

“Any alleged violation of the law occurred nearly three years ago when Iowa announced its intent to withdraw from the pandemic-related unemployment program,” Rose said. “As Defendants point out, if Plaintiffs desired an injunction to prevent the State from withdrawing its participation, they had an opportunity during the 30-day notice period required by the CARES Act.”

Reynolds said she appreciated the court’s decision.

“During the pandemic, the federal government attempted to pay able-bodied people to stay home instead of seeking employment to keep our economy on track,” Reynolds said. “Republican governors around the country stood up to protect the livelihoods of our citizens, getting people back to work when it was desperately needed. In Iowa, we value hard work and recognize the dignity a good job can bring.”

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