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(The Center Square) – The Indiana Court of Appeals ruled Monday the state must continue paying federal unemployment benefits after denying a request from the state to overturn a lower court’s decision.

A statement from the state’s Department of Workforce Development said it could resume the payments as soon as Friday.

“Since the initial trial court order, the DWD has been working to restart the federal pandemic benefits that are at issue in the lawsuit,” the statement read. “This work continues with an estimated restart date of Friday, July 16.”

The state earlier this month said it did not have a way to opt back into the system that pays $300 per week on top of state unemployment checks.

Indiana Gov. Eric Holcomb in May said the state would end the federal payments as of June 19. Some 25 other states, primarily led by Republican governors, have announced they would end the payments ahead of the Sept. 6 cutoff date.

Most have said the additional money has been a disincentive for people to go back to work as business owners report problems filling open positions.

In a statement Monday afternoon, Holcomb said, “We acknowledge the court of appeals decision today. Notwithstanding, the Department of Workforce Development will continue to work with the U.S. Department of Labor on finalizing the pandemic unemployment insurance benefits to comply with the judge’s order.”

The federal payments, which originally started at $600 per week, are part of the $2.2 billion Coronavirus Aid, Relief and Economic Security Act (CARES Act) signed by President Donald Trump in March 2020.

The weekly checks were continued under President Joe Biden’s $1.9 trillion American Rescue Plan earlier this week. Congress voted to end the program on Sept. 6.

Indiana Legal Services, a nonprofit law firm based in Indianapolis that provides free legal services to low-income residents, asked for an emergency injunction in late June forcing the state to continue the federal payments.

Marion County Superior Court Judge John Hanley granted the injunction, saying the harm caused by ending the payments outweighed the risk to the state.

“A loss of housing or medical care and the inability to provide food, shelter and adequate childcare for a family constitutes irreparable harm pending resolution of this cause of action and are not adequately compensable by an award of damages,” Hanley wrote in his decision.

About 230,000 Hoosiers currently qualify for unemployment. The state’s unemployment rate for May was 4 percent, slightly higher than April’s 3.9%. Figures for June will be released later this week.