The way this played out was maddening and frustrating for the people involved, and we're told went against the letter of the law; it looks like it matched income after the unemployment event against the unemployment payments...

but looking at the calculation that was done, it was not incredibly immoral or something, "if average income in a year was greater than welfare eligibility for that year, no eligibility" doesn't sound kafkaesque. The cost of unemployment insurance will reflect the average payouts, and people who treat unemployment as an entitlement (you're supposed to look for a job, not squeeze every nickel out of the system) just drive the costs up for everybody else.

People who yearn for socialism, yes, they want every benefit they can get. People who yearn for systemic efficiency, taking a moving average of your income and filling in where it falls short sounds like a good method.