Yes, based on what you write, you would. While the standard for underemployment is subjective, not hard-and-fast, generally going from 120 hours/3 weeks to 20 hours/3 weeks--or to only 1/6th the  pay--would qualify as underemployment. Certainly, based on what you write, there is no reason to not apply for benefits--you can apply in good faith, based on the facts as you describe them, and the worst that would happen is you are denied.