Posts Tagged ‘benefits’

RRB acts for impaired beneficiaries

The Railroad Retirement Board’s policy is that every annuitant has the right to manage his or her own benefits. However, when physical or mental impairments make a railroad retirement annuitant incapable of properly handling benefit payments, or where the Railroad Retirement Board (RRB) determines that the interests of the annuitant so require, the RRB can appoint a representative payee to act on the annuitant’s behalf. A representative payee may be either a person or an organization selected by the RRB to receive benefits on behalf of an annuitant.

The following questions and answers provide information for family members, or others, who may have to act on behalf of an annuitant.

1. Does the RRB have legal authority to appoint a representative payee for an annuitant?

The Railroad Retirement Act gives the RRB authority to determine whether direct payment of benefits, or payment to a representative payee, will best serve an annuitant’s interest. The RRB can appoint a representative payee regardless of whether there has been a legal finding of incompetence or commitment and, depending on the circumstances in a particular case, the RRB can select someone other than the individual’s legal representative to be the representative payee.

2. What if a person has been given power of attorney by a beneficiary?

Power of attorney is a legal process where one person grants another the authority to transact certain business on his or her behalf; but the RRB, like the Social Security Administration, does not recognize power of attorney for purposes of managing benefit payments for a beneficiary. For this purpose, the RRB uses the position of representative payee.

3. Why doesn’t the RRB recognize power of attorney?

The Railroad Retirement Act protects a person’s right to receive benefits directly and to use them as he or she sees fit by prohibiting the assignment of benefits. Power of attorney creates an assignment-like situation that is contrary to the protections given by this law. The Act likewise gives the RRB exclusive jurisdiction in determining whether to appoint a representative payee for an annuitant. If the RRB recognized power of attorney, it would be deferring to a designation made by someone outside of the agency and would, in effect, be abdicating its responsibility to the annuitant.

Also, events often occur which may affect an annuitant’s eligibility for benefits. The responsibility for reporting these events to the RRB is placed, by law, directly on the annuitant or the annuitant’s representative payee. When benefits are accepted, the annuitant or his or her payee attests to a continued eligibility for such benefits. And if payments are misused, they can be recouped from the payee. This is not true with power of attorney.

4. How are these representative payees selected?

Generally, the RRB’s local field offices determine the need for a representative payee and interview potential payees. The field office also advises the payee of his or her duties, monitors the payee, investigates any allegations of misuse of funds, and changes the method of payment, or the payee, when appropriate.

The RRB provides 15 days’ advance notice to an annuitant of its intent to appoint a representative payee, and the name of the payee, in order to allow the annuitant a period of time in which to contest the appointment.

5. What are the primary duties and responsibilities of a representative payee?

The payee must give first consideration to the annuitant’s day-to-day needs. This includes paying for food, shelter, clothing, medical care and miscellaneous personal needs. Beyond day-to-day needs, railroad retirement benefits may be used for other expenses.

The payee is also responsible for reporting events to the RRB that affect the individual’s annuity, and is required to account for the funds received on behalf of the annuitant.

In addition, since railroad retirement benefits are subject to Federal income tax, a representative payee is responsible for delivering the benefit information statements issued each year by the RRB to the person handling the annuitant’s tax matters.

Periodically, the payee will be asked to complete a report which includes questions regarding how much of the railroad retirement benefits available during the year were used for the support of the beneficiary, how much of the benefits were saved, and how the savings were invested. In order to complete the questionnaire correctly, a payee must keep current records of the railroad retirement benefits received and how the benefits were used. The records should be retained for four years.

6. What are a representative payee’s primary responsibilities for an annuitant’s Medicare coverage?

When an annuitant requires covered medical services, the payee must have the annuitant’s Medicare card available. The payee must also keep records of the services received and the expenses incurred or paid, just as for any other usage of railroad retirement benefits.

7. What if an annuitant is confined to an institution?

When annuitants are in a nursing home, hospital or other institution, their railroad retirement benefit payments should be used to meet the charges for their current maintenance. Current maintenance includes the usual charges the institution makes for providing care and services.

The payee should use the benefit payments to aid in the annuitant’s possible recovery or release from the institution, or to improve his or her living conditions while confined. Payments may be used to provide such items as clothing, personal grooming supplies, transportation of relatives to visit the patient, trial visits to relatives, medical and dental care, and reading materials and hobby supplies.

8. How should railroad retirement benefits not immediately required to meet an annuitant’s needs be handled?

Benefit payments which will not be needed in the near future must be saved or invested unless they are needed for the support of the annuitant’s legally dependent spouse or child, or to pay creditors under certain circumstances. It is recommended that conserved funds be held in interest-bearing accounts. Preferred investments are Federally-insured or state-insured accounts at financial institutions and obligations of, or those backed by, the Federal Government, such as U.S. Savings Bonds.

Funds should not be kept in the home, where they may be lost or stolen, nor can they be mingled with the payee’s own funds or other funds.

9. How can a person get more information about being appointed as a representative payee, or whether the use of railroad retirement benefits for a particular purpose would be proper?

More information is available by visiting the agency’s web site, www.rrb.gov, or by calling an RRB office toll-free at (877) 772-5772. Persons can find the address of the RRB office servicing their area by calling the RRB’s toll-free number or at www.rrb.gov.

(The preceding release was issued by the Railroad Retirement Board on September 8, 2010.)

Planning to retire? We have some answers

If you are planning to retire in the coming months, you are sure to have concerns and many more questions.

Understanding retirement benefits, Medicare and Medigap – and, especially, assuring you obtain all you are entitled to – is no simple task. There is help, however, and the UTU can help you.

Many of your pre-retirement questions can be answered at the UTU Internet home page, at www.utu.org by clicking on “UTU Alumni Association” (located along the top under “About UTU”).

See, for example, the article headlined, “Preparing for Your Retirement,” which provides advice on tasks to consider in the months before your actual retirement. The topics include, “Money and health,” “Medicare and more,” “Pension plans,” “Investment income,” “Monthly income,” information for UTUIA policy holders, and advice on documents you will need to complete or obtain before applying for certain retirement benefits.

Also provided are contact information – phone numbers and Web addresses – where additional retirement information (such as veteran’s benefits for surviving spouses) may be obtained.

A new addition to that the Alumni Association page is a link to UnitedHealthcare’s “Retirement Made Easy Kit,” crafted for railroaders about to retire.

For Bus and Aviation Department members, there is a link for Social Security information.

Don’t overlook information on joining the UTU Alumni Association, which will keep you in touch with other UTU retirees and continuing news about the UTU, your past employer and current events affecting airlines, the motorcoach industry and railroads.

Those nearing retirement also should click on the “Health Care” link in the grey tile area at the top of the UTU homepage at www.utu.org. You will find there additional links to information on health care benefits, disabilities and Medicare prescription drug benefits.

Advance planning is an important first step toward assuring smooth sailing toward a successful and enjoyable retirement.

RR jobless, sickness benefits rising

The maximum daily benefit rate payable for claims under the Railroad Unemployment Insurance Act increases to $66 from $64 in the new benefit year, which begins July 1, reports the Railroad Retirement Board.

Benefits are normally paid for the number of days of unemployment or sickness over four in 14-day registration periods, so maximum benefits for biweekly claims will total $660.

During the first 14-day claim period in a benefit year, benefits are payable for each day of unemployment or sickness in excess of seven, rather than four, which, in effect, provides a one-week waiting period.

Initial sickness claims must also begin with four consecutive days of sickness. However, only one waiting period is required during any period of continuing unemployment or sickness, even if that period continues into a subsequent benefit year. Claimants already on the rolls will, therefore, normally not be required to serve another waiting period because of the onset of the new benefit year.

To qualify for normal railroad unemployment or sickness benefits in the benefit year beginning July 1, an employee must have had railroad earnings of at least $3,325 in calendar year 2009, not counting more than $1,330 for any month. Those who were first employed in the rail industry in 2009 must also have at least five months of creditable railroad service in 2009.

Under certain conditions, employees who do not qualify in the new benefit year on the basis of their 2009 earnings may still be able to receive benefits after June 30, 2010. Employees who received normal benefits in the benefit year ending June 30, might still be eligible for extended benefits, and ten-year employees may be eligible for accelerated benefits if they have rail earnings of at least $3,325 in 2010, not counting earnings of more than $1,330 a month.

Application forms for unemployment and sickness benefits may be obtained from railroad employers, railroad labor organizations, any Railroad Retirement Board office, or the agency’s web site at www.rrb.gov .

Also, as an alternative to applying for unemployment benefits through the mail, unemployment claimants can instead file applications online. Likewise, subsequent biweekly claims for unemployment benefits may be filed online rather than through the mail.

Employees can also access information about their individual railroad unemployment insurance account statements online. These account statements provide a summary of the unemployment and sickness benefits paid under the Railroad Unemployment Insurance Act to rail employees.

To access these online services, employees must first establish an RRB Internet Services account.

For security purposes, first-time users must apply for a Password Request Code, which they will receive by mail in about 10 business days.

To do this, employees should click on “Benefit Online Services” and select “request a PRC.” Once employees establish their online accounts, they will be able to file their applications and biweekly claims for unemployment benefits as well as conduct other business with the RRB over the Internet.

Employees are encouraged to initiate an online account while still employed so the account is established if they ever need to use these or other select RRB Internet services.

Employees who have already established online accounts do not need to do so again. Although claimants cannot currently file applications or biweekly claims for railroad sickness benefits over the Internet, the RRB is planning to add the online filing of sickness claims in the future.

Claimants with questions about unemployment or sickness benefits should contact an RRB office by calling toll free at 1-877-772-5772.

Claimants can also find the address of the RRB office servicing their area and get information about their claims and benefit payments by calling this toll-free number.

Most RRB offices are open to the public from 9:00 a.m. to 3:30 p.m., Monday through Friday, except on federal holidays. Field office locations can also be found by visiting www.rrb.gov.

RRB benefits subject to age reductions

Railroad retirement benefits are subject to reduction if an employee with less than 30 years of service retires before attaining full retirement age. While employees with less than 30 years of service may still retire at age 62, the age at which full retirement benefits are payable has been gradually increasing since the year 2000, the same as for social security.

The following questions and answers explain how these early retirement age reductions are applied to railroad retirement annuities.

1. What is the full retirement age for employees with less than 30 years of service and is it the same for all employees?

Full retirement age, the earliest age at which a person can begin receiving railroad retirement or social security benefits without any reduction for early retirement, ranges from age 65 for those born before 1938 to age 67 for those born in 1960 or later, the same as for social security.

2. How are the changes in the maximum age reduction being phased in?

Since 2000, the age requirements for some unreduced railroad retirement benefits have been rising just like the social security requirements. For employees with less than 30 years of service and their spouses, full retirement age increases from 65 to 66, and from 66 to 67, at the rate of two months per year over two separate six-year periods. This also affects how reduced benefits are computed for early retirement.

The gradual increase in full retirement age from age 65 to age 66 affects those people who were born in the years 1938 through 1942. The full retirement age will remain age 66 for people born in the years 1943 through 1954. The gradual increase in full retirement age from age 66 to age 67 affects those who were born in the years 1955 through 1959. For people who were born in 1960 or later the full retirement age will be age 67.

3. How does this affect the early retirement age reductions applied to the annuities of those who retire before full retirement age?

The early retirement annuity reductions applied to annuities awarded before full retirement age are increasing. For employees retiring between age 62 and full retirement age with less than 30 years of service, the maximum reduction will be 30 percent by the year 2022. Prior to 2000, the maximum reduction was 20 percent.

Age reductions are applied separately to the tier I and tier II components of an annuity. The tier I reduction is 1/180 for each of the first 36 months the employee is under full retirement age when his or her annuity begins and 1/240 for each additional month. This will result in a gradual increase in the reduction at age 62 to 30 percent for an employee once the age 67 retirement age is in effect.

These same reductions apply to the tier II component of the annuity. However, if an employee had any creditable railroad service before August 12, 1983, the retirement age for tier II purposes will remain 65, and the tier II benefit will not be reduced beyond 20 percent.

The following chart shows how the gradual increase in full retirement age will affect employees.

Employee retires with less than 30 years of service:

  • If the employee was born in 1937* or earlier, his or her full retirement age** is 65 and the maximum annuity reduction at age 62 is 20 percent.
  • If the employee was born in 1938*, his or her full retirement age** is 65 years and 2 months and the maximum annuity reduction at age 62 is 20.833 percent.
  • If the employee was born in 1939*, his or her full retirement age** is 65 and 4 months and the maximum annuity reduction at age 62 is 21.667 percent.
  • If the employee was born in 1940*, his or her full retirement age** is 65 and 6 months and the maximum annuity reduction at age 62 is 22.50 percent.
  • If the employee was born in 1941*, his or her full retirement age** is 65 and 8 months and the maximum annuity reduction at age 62 is 23.333 percent.
  • If the employee was born in 1942*, his or her full retirement age** is 65 and 10 months and the maximum annuity reduction at age 62 is 24.167 percent.
  • If the employee was born in 1943 through 1954*, his or her full retirement age** is 66 and the maximum annuity reduction at age 62 is 25 percent.
  • If the employee was born in 1955*, his or her full retirement age** is 66 and 2 months and the maximum annuity reduction at age 62 is 25.833 percent.
  • If the employee was born in 1956*, his or her full retirement age** is 66 and 4 months and the maximum annuity reduction at age 62 is 26.667 percent.
  • If the employee was born in 1957*, his or her full retirement age** is 66 and 6 months and the maximum annuity reduction at age 62 is 27.50 percent.
  • If the employee was born in 1958*, his or her full retirement age** is 66 and 8 months and the maximum annuity reduction at age 62 is 28.333 percent.
  • If the employee was born in 1959*, his or her full retirement age** is 66 and 10 months and the maximum annuity reduction at age 62 is 29.167 percent.
  • If the employee was born in 1960* or later, his or her full retirement age** is 67 and the maximum annuity reduction at age 62 is 30 percent.

*A person attains a given age the day before his or her birthday. Consequently, someone born on Jan. 1 is considered to have attained his or her given age on December 31 of the previous year.

**If an employee has less than 10 years of railroad service and is already entitled to an age-reduced social security benefit, the tier I reduction is based on the reduction applicable on the beginning date of the social security benefit, even if the employee is already of full retirement age on the beginning date of the railroad retirement annuity.

4. What are some examples of how this will affect the amounts payable to employees retiring before full retirement age with less than 30 years of service?

Take the example of an employee born on June 2, 1950, who retires in 2012 at the age of 62. In terms of today’s dollars and current benefit levels, not counting future increases in creditable earnings, assume this employee is eligible for monthly tier I and tier II benefits, before age reductions, of $1,200 and $800, respectively, for a total monthly benefit of $2,000.

Upon retirement at age 62, the employee’s tier I benefit would be reduced by 25 percent, the maximum age reduction applicable in 2012. This would yield a tier I monthly benefit of $900; the employee’s tier II benefit would also be reduced by 25 percent, providing a tier II amount of $600 and a total monthly rate of $1,500. However, if the employee had any rail service before Aug. 12, 1983, the tier II benefit would be subject to a maximum reduction of only 20 percent, providing a tier II amount of $640, and a total monthly rate of $1,540. As a second example, take an employee born on June 2, 1960, and also eligible for monthly tier I and tier II benefits, before age reductions, of $1,200 and $800, respectively, for a total monthly benefit of $2,000. This employee retires in 2022 at age 62 with no service before Aug. 12, 1983. Consequently, a 30 percent reduction is applied to both the tier I and tier II benefits and the net total annuity would be $1,400.

5. How are railroad retirement spouse benefits affected by this change?

If an employee retiring with less than 30 years of service is age 62, the employee’s spouse is also eligible for an annuity the first full month the spouse is age 62. Early retirement reductions are applied to the spouse annuity if the spouse retires prior to full retirement age. Beginning in the year 2000, full retirement age for a spouse gradually began to rise to age 67, just as for an employee, depending on the year of birth. While reduced spouse benefits are still payable at age 62, the maximum reduction will be 35 percent by the year 2022. However, if an employee had any creditable rail service prior to Aug. 12, 1983, the increased age reduction is applied only to the spouse’s tier I benefit. The maximum reduction in tier II, in this case, would only be 25 percent, as under prior law.

Take for an example the spouse of a railroader with less than 30 years of service, none of it prior to Aug. 12, 1983, who was born on April 2, 1960, and is retiring in 2022 at age 62, with a spouse annuity, in terms of today’s dollars and current benefit payments and before any reductions for age, of $1,000 a month. With the maximum reduction of 35 percent applicable in 2022, her net monthly benefit would be $650.

As a second example, if the same spouse had been born on April 2, 1948, and was retiring in 2010 at age 62, with the maximum age reduction of 30 percent, her net monthly benefit would be $700.

The following chart shows how this will affect the spouses of railroad employees if the employee retires with less than 30 years of service.

Spouse Age Reductions

  • If the employee retires with less than 30 years of service and the employee’s spouse was born in 1937* or earlier, the spouse’s full retirement age** is 65 and the spouse’s maximum annuity reduction at age 62 is 25 percent.
  • If the spouse was born in 1938*, the spouse’s full retirement age** is 65 years and 2 months and the spouse’s maximum annuity reduction at age 62 is 25.833 percent.
  • If the spouse was born in 1939*, her or his full retirement age** is 65 and 4 months and the maximum annuity reduction at age 62 is 26.667 percent.
  • If the spouse was born in 1940*, her or his full retirement age** is 65 and 6 months and the maximum annuity reduction at age 62 is 27.50 percent.
  • If the spouse was born in 1941*, her or his full retirement age** is 65 and 8 months and the maximum annuity reduction at age 62 is 28.333 percent.
  • If the spouse was born in 1942*, her or his full retirement age** is 65 and 10 months and the maximum annuity reduction at age 62 is 29.167 percent.
  • If the spouse was born in 1943 through 1954*, her or his full retirement age** is 66 and the maximum annuity reduction at age 62 is 30 percent.
  • If the spouse was born in 1955*, her or his full retirement age** is 66 and 2 months and the maximum annuity reduction at age 62 is 30.833 percent.
  • If the spouse was born in 1956*, her or his full retirement age** is 66 and 4 months and the maximum annuity reduction at age 62 is 31.667 percent.
  • If the spouse was born in 1957*, her or his full retirement age** is 66 and 6 months and the maximum annuity reduction at age 62 is 32.50 percent.
  • If the spouse was born in 1958*, her or his full retirement age** is 66 and 8 months and the maximum annuity reduction at age 62 is 33.333 percent.
  • If the spouse was born in 1959*, her or his full retirement age** is 66 and 10 months and the maximum annuity reduction at age 62 is 34.167 percent.
  • If the spouse was born in 1960* or later, her or his full retirement age** is 67 and the maximum annuity reduction at age 62 is 35 percent.

*A person attains a given age the day before his or her birthday. Consequently, someone born on January 1 is considered to have attained his or her given age on December 31 of the previous year.

**If the employee has less than 10 years of railroad service and the spouse is already entitled to an age-reduced social security benefit, the age reduction in her or his tier I will be based on the age reduction applicable on the beginning date of the spouse’s social security benefit, even if the spouse is already of full retirement age on the beginning date of her or his railroad retirement annuity.

6. Are age reductions applied to employee disability annuities?

Employee annuities based on disability are not subject to age reductions except for employees with less than 10 years of service, but who have 5 years of service after 1995. Such employees may qualify for a tier I benefit before retirement age based on total and permanent disability, but only if they have a disability insured status (also called a “disability freeze”) under Social Security Act rules, counting both railroad retirement and social security-covered earnings. Unlike with a 10-year employee, a tier II benefit is not payable in these disability cases until the employee attains age 62. And, the employee’s tier II benefit will be reduced for early retirement in the same manner as the tier II benefit of an employee who retired at age 62 with less than 30 years of service.

7. Do these changes also affect survivor benefits?

Yes. The eligibility age for a full widow(er)’s annuity is also gradually rising from age 65 for those born before 1940 to age 67 for those born in 1962 or later. A widow(er), surviving divorced spouse or remarried widow(er) whose annuity begins at full retirement age or later will generally receive an annuity unreduced for early retirement. However, if the deceased employee received an annuity that was reduced for early retirement, a reduction would be applied to the tier I amount payable to the widow(er), surviving divorced spouse or remarried widow(er). The maximum age reductions will range from 17.1 percent to 20.36 percent, depending on the widow(er)’s date of birth. (These age reductions apply to both tier I and tier II.) For a surviving divorced spouse or remarried widow(er), the maximum age reduction is 28.5 percent. For a disabled widow(er), disabled surviving divorced spouse or disabled remarried widow(er), the maximum reduction is also 28.5 percent, even if the annuity begins at age 50.

8. Does the increase in full retirement age affect the age at which a person becomes eligible for Medicare benefits?

No. Although the age requirements for some unreduced railroad retirement benefits have risen just like the social security requirements, beneficiaries are still eligible for Medicare at age 65.

9. Do these increases in full retirement age also apply to the earnings limitations and work deductions governing benefit payments to annuitants who work after retirement?

Like social security benefits, railroad retirement tier I and vested dual benefits paid to employees and spouses, and tier I, tier II, and vested dual benefits paid to survivors are subject to deductions if an annuitant’s earnings exceed certain exempt amounts. These earnings limitations and work deductions apply to all age and service annuitants and spouses under full retirement age regardless of the employee’s years of service. Although employees retiring at age 60 with 30 years of service have no age reduction, these earnings limitations and work deductions still apply until they reach their full retirement age. These earnings limitations also apply to survivor annuitants, with the exception of disabled widow(er)s under age 60 and disabled children.

Likewise, while special earnings restrictions apply to employees entitled to disability annuities, these disability earnings restrictions cease upon a disabled employee annuitant’s attainment of full retirement age. This transition is effective no earlier than full retirement age even if the annuitant had 30 years of railroad service.

The additional deductions applied to the annuities of retired employees and spouses who work for their last pre-retirement nonrailroad employer continue to apply after the attainment of full retirement age.

10. How can individuals get more information about railroad retirement annuities and their eligibility requirements?

Employees should contact a field office of the RRB by calling toll-free 1-877-772-5772 or via the RRB’s web site at www.rrb.gov. Most RRB offices are open to the public from 9:00 a.m. to 3:30 p.m., Monday through Friday, except on Federal holidays.

(The preceding release was issued by the Railroad Retirement Board on June 16, 2010.)

RRB sickness, jobless benefits update

A new benefit year for jobless and sickness benefits under the Railroad Unemployment Insurance Act begins July 1, 2010, the Railroad Retirement Board reports.

Administered by the Railroad Retirement Board (RRB), this law provides two kinds of benefits for qualified railroaders: unemployment benefits for those who become unemployed but are ready, willing and able to work; and sickness benefits for those who are unable to work because of sickness or injury. Sickness benefits are also payable to female rail workers for periods of time when they are unable to work because of pregnancy and childbirth.

The following questions and answers describe these benefits, their eligibility requirements, and how to claim them.

1. What is the daily benefit rate payable in the new benefit year beginning July 1, 2010?

Almost all employees will qualify for the new maximum daily benefit rate of $66, which increased from $64 under indexing provisions reflecting the growth in average national wages. Benefits are generally payable for days of unemployment or sickness in excess of four in biweekly claim periods, which yields $660 for each two full weeks of unemployment or sickness. However, sickness benefits resulting from other than on-the-job injuries are subject to tier I Railroad Retirement payroll taxes for the first six months after the employee last worked.

2. What are the eligibility requirements for railroad unemployment and sickness benefits in the new benefit year?

To qualify for normal railroad unemployment or sickness benefits, an employee must have had railroad earnings of at least $3,325 in calendar year 2009, counting no more than $1,330 for any month. Those who were first employed in the rail industry in 2009 must also have at least five months of creditable railroad service in 2009.

Under certain conditions, employees with 120 or more months of railroad service who do not qualify on the basis of their 2009 earnings may still be able to receive benefits in the new benefit year. Employees with 120 or more months of service who received normal benefits in the benefit year ending June 30, 2010, may be eligible for extended benefits, and employees with 120 or more months of service might qualify for accelerated benefits if they have rail earnings of at least $3,325 in 2010, not counting earnings of more than $1,330 a month.

In order to qualify for extended unemployment benefits, a claimant must not have voluntarily quit work without good cause and not have voluntarily retired. To qualify for extended sickness benefits, a claimant must not have voluntarily retired and must be under age 65.

To be eligible for accelerated benefits, a claimant must have 14 or more consecutive days of either unemployment or sickness; not have voluntarily retired or, if claiming unemployment benefits, quit work without good cause; and be under age 65 when claiming sickness benefits.

3. How long are these benefits payable?

Normal unemployment or sickness benefits are each payable for up to 130 days (26 weeks) in a benefit year. The total amount of each kind of benefit which may be paid in the new benefit year cannot exceed the employee’s railroad earnings in calendar year 2009, counting earnings up to $1,718 per month.

If normal benefits are exhausted, extended benefits are payable for up to 65 days (during 7 consecutive registration periods) to employees with 10 or more years of service.

4. What is the waiting-period requirement for unemployment and sickness benefits?

Benefits are normally paid for the number of days of unemployment or sickness over four in 14-day claim periods. Initial sickness claims must also begin with four consecutive days of sickness. However, during the first 14-day claim period in a benefit year, benefits are only payable for each day of unemployment or sickness in excess of seven which, in effect, provides a one-week waiting period. (If an employee has at least five days of unemployment or five days of sickness in a 14-day period, he or she should still file for benefits.) Separate waiting periods are required for unemployment and sickness benefits. However, only one seven-day waiting period is generally required during any period of continuing unemployment or sickness, even if that period continues into a subsequent benefit year.

5. Are there special waiting-period requirements if unemployment is due to a strike?

If a worker is unemployed because of a strike conducted in accordance with the Railway Labor Act, benefits are payable for days of unemployment during 14-day claim periods after the first claim period, but no benefits are payable for days of unemployment during the first 14 days of the strike.

If a strike is in violation of the Railway Labor Act, unemployment benefits are not payable to employees participating in the strike. However, employees not among those participating in such an illegal strike, but who are unemployed on account of the strike, may receive benefits after the first two weeks of the strike.

While a benefit year waiting period cannot count toward a strike waiting period, the 14-day strike waiting period may count as the benefit year waiting period if a worker subsequently becomes unemployed for reasons other than a strike later in the benefit year.

6. Can employees in train and engine service receive unemployment benefits for days when they are standing by or laying over between scheduled runs?

No, not if they are standing by or laying over between regularly assigned trips or they missed a turn in pool service.

7. Can extra-board employees receive unemployment benefits between jobs?

Yes, but only if the miles and/or hours they actually worked were less than the equivalent of normal full-time work in their class of service during the 14-day claim period. Entitlement to benefits would also depend on the employee’s earnings.

8. How would an employee’s earnings in a claim period affect his or her eligibility for unemployment benefits?

If a claimant’s earnings for days worked, and/or days of vacation or paid leave, in a 14-day claim period are more than a certain indexed amount, no benefits are payable for any days of unemployment in that period. That claim, however, can be used to satisfy the waiting period.

Earnings include pay from railroad and nonrailroad work, as well as part-time work and self-employment. Earnings also include pay that an employee would have earned except for a failure to mark up or report for duty on time, or because he or she missed a turn in pool service or was otherwise not ready or willing to work. For the benefit year that begins July 2010 the indexed amount is $1,330, which corresponds to the base year monthly compensation amount used in determining eligibility for benefits in the new benefit year. Also, even if an earnings test applies on the first claim in a benefit year, this will not prevent the first claim from satisfying the waiting period in a benefit year.

9. How does a person apply for, as well as claim, unemployment benefits?

Claimants can file their applications for unemployment benefits, as well as their subsequent biweekly claims, by mail or online.

To apply by mail, claimants must obtain an application from their labor organization, employer, local RRB office or the agency’s web site at www.rrb.gov. The completed application should be mailed to the local RRB office as soon as possible and, in any case, must be filed within 30 days of the date on which the claimant became unemployed or the first day for which he or she wishes to claim benefits. Benefits may be lost if the application is filed late.

To file their applications — or their biweekly claims — online, claimants must first establish an RRB Internet Services account. For security purposes, first time users must apply for a Password Request Code, which they will receive by mail in about 10 business days. To do this, they should click on “Benefit Online Services” and select “request a PRC.” Once they establish their online accounts, they will be able to file their applications and biweekly claims for unemployment benefits as well as conduct other business with the RRB over the Internet. Employees are encouraged to establish online accounts while still employed so the account is ready if they ever need to apply for these benefits or use other select RRB Internet services. Employees who have already established online accounts do not need to do so again.

The local RRB office reviews the completed application, whether it was submitted by mail or online, and notifies the claimant’s current railroad employer, and base-year employer if different. The employer has the opportunity to provide information about the benefit application.

After the RRB office processes the application, biweekly claim forms are mailed to the claimant, and are also made available on the RRB’s web site, as long as he or she remains unemployed and eligible for benefits. The time for filing a claim is 15 days from the last day of the claim period or 15 days from the date the claim form is mailed to the claimant or made available online, whichever is later. Claimants should not file both a paper claim and an online claim for the same period.

Only one application needs to be filed during a benefit year, even if a claimant becomes unemployed more than once. However, a claimant must, in such a case, request a claim form from an RRB field office within 30 days of the first day for which he or she wants to resume claiming benefits. These claims may also be filed by mail or online.

10. How does a person apply for sickness benefits?

An application for sickness benefits can be obtained from railroad labor organizations, railroad employers, any RRB office or the agency’s web site. An application and a doctor’s statement of sickness are required at the beginning of each period of continuing sickness for which benefits are claimed. Claimants should make a special effort to have the doctor’s statement of sickness completed promptly since no claims can be paid without it.

The RRB suggests that employees keep an application on hand for use in claiming sickness benefits, and that family members know where the form is kept and how to use it. If an employee becomes unable to work because of sickness or injury, the employee should complete the application and then have his or her doctor complete the statement of sickness. (Employees should note that they must indicate on the application whether they are applying for sickness benefits because they were injured at work or have a work-related illness. They must also indicate whether they have filed or expect to file a lawsuit or claim against a third-party for personal injury. If a claimant receives sickness benefits for an injury or illness for which he or she is paid damages, it is important to be aware that the RRB is entitled to reimbursement of either the amount of the benefits paid for the injury or illness, or the net amount of the settlement, after deducting the claimant’s gross medical, hospital, and legal expenses, whichever is less.)

If the employee is too sick to complete the application, someone else may do so. In such cases, a family member should also complete the “Statement of Authority to Act for Employee,” which accompanies the statement of sickness.

After completion, the forms should be mailed to the RRB’s headquarters in Chicago by the seventh day of the illness or injury for which benefits are claimed. However, applications received after 10 days but within 30 days of the first day for which an employee wishes to claim benefits are generally considered timely filed if there is a good reason for the delay. After the RRB receives the application and statement of sickness and determines eligibility, biweekly claim forms are mailed to the claimant for completion and return to an RRB field office for processing. The claim forms must be received at the RRB within 30 days of the last day of the claim period, or within 30 days of the date the claim form was mailed to the claimant, whichever is later. Benefits may be lost if an application or claim is filed late.

Although claimants cannot currently file applications or biweekly claims for railroad sickness benefits over the Internet, the RRB is planning to add the online filing of sickness claims in the future.

11. Is a claimant’s employer notified each time a biweekly claim for unemployment or sickness benefits is filed?

The Railroad Unemployment Insurance Act requires the RRB to notify the claimant’s base-year employer each time a claim for benefits is filed, and to give that employer an opportunity to submit information relevant to the claim before the RRB makes an initial determination on the claim. In addition, the claimant’s current employer is also notified. The RRB must also notify the claimant’s base-year employer each time benefits are paid to a claimant. The base-year employer may protest the decision to pay benefits. Such a protest does not prevent the timely payment of benefits. However, a claimant may be required to repay benefits if the employer’s protest is successful.

The RRB also checks with other Federal agencies and all 50 states, as well as the District of Columbia and Puerto Rico, to detect fraudulent benefit claims and it checks with physicians to verify the accuracy of medical statements supporting sickness benefit claims.

12. How long does it take to receive payment?

Under the RRB’s Customer Service Plan, if a claimant files an application for unemployment or sickness benefits, a decision will be made within 10 days of the date the application was filed. If a claim for subsequent biweekly unemployment or sickness benefits is filed, a decision will be made within 10 days of the date the RRB received the claim form. If the claimant is entitled to benefits, benefits will generally be paid within one week of that decision.

However, some claims for benefits may take longer to handle than others if they are more complex, or if an RRB office has to get information from other people or organizations. If this happens, claimants may expect an explanation and an estimate of the time required to make a decision.

Claimants who think an RRB office made the wrong decision about their benefits have the right to ask for review and to appeal. They will be notified of these rights each time an unfavorable decision is made on their claims.

13. How are payments made?

Railroad unemployment and sickness insurance benefits are paid by Direct Deposit. With Direct Deposit, benefit payments are made electronically to an employee’s bank, savings and loan, credit union or other financial institution. New applicants for unemployment and sickness benefits will be asked to provide information needed for Direct Deposit enrollment. Waivers are available to individuals who determine that Direct Deposit would cause a hardship, and to individuals without bank accounts.

14. Can claimants access information online about their railroad unemployment and sickness benefit payments?

Claimants can access information about their individual railroad unemployment insurance account statements via the Internet. These account statements provide a summary of the unemployment and sickness benefits paid under the Railroad Unemployment Insurance Act to rail employees. This online service, called “RUIA Account Statement,” displays the type and amount of a claimant’s last five benefit payments, the claim period for which the payments were made, and the dates that the payments were approved. Claimants can also confirm the RRB’s receipt of their latest application or claim for unemployment or sickness benefits, along with the receipt of any supplemental doctor’s statement required to continue the payment of sickness benefits. In addition, the service allows claimants to view the address currently on record for them and, if applicable, their Direct Deposit information.

To use this service, claimants must establish an Internet Services account, as described in the answer to question 9.

15. How can claimants receive more information on railroad unemployment or sickness benefits?

Claimants with questions about unemployment or sickness benefits should contact an RRB office by calling toll free at (877) 772-5772. Claimants can also find the address of the RRB office serving their area and get information about their claims and benefit payments by calling this toll-free number. Most RRB offices are open to the public from 9:00 a.m. to 3:30 p.m., Monday through Friday, except on Federal holidays. Field office locations can also be found by visiting www.rrb.gov.

RRB explains retiree benefits

Employers and employees covered by the Railroad Retirement Act pay higher retirement taxes than those covered by the Social Security Act, so that railroad retirement benefits remain higher than Social Security benefits, especially for career employees.

The following questions and answers show the differences in railroad retirement and social security benefits payable at the close of the fiscal year ending September 30, 2009. They also show the differences in age requirements and payroll taxes under the two systems.

1. How do the average monthly railroad retirement and social security benefits paid to retired employees and spouses compare?

The average age annuity being paid by the Railroad Retirement Board (RRB) at the end of fiscal year 2009 to career rail employees was $2,690 a month, and for all retired rail employees the average was $2,125. The average age retirement benefit being paid under social security was over $1,160 a month. Spouse benefits averaged $795 a month under railroad retirement compared to $555 under social security.

The Railroad Retirement Act also provides supplemental railroad retirement annuities of between $23 and $43 a month, which are payable to employees who retire directly from the rail industry with 25 or more years of service.

2. Are the benefits awarded to recent retirees generally greater than the benefits payable to those who retired years ago?

Yes, because recent awards are based on higher average earnings. Age annuities awarded to career railroad employees retiring at the end of fiscal year 2009 averaged over $3,280 a month while monthly benefits awarded to workers retiring at full retirement age under social security averaged about $1,625. If spouse benefits are added, the combined benefits for the employee and spouse would approximate $4,550 under railroad retirement coverage, compared to $2,435 under social security. Adding a supplemental annuity to the railroad family’s benefit increases average total benefits for current career rail retirees to about $4,585 a month.

3. How much are the disability benefits currently awarded?

Disabled railroad workers retiring directly from the railroad industry at the end of fiscal year 2009 were awarded nearly $2,800 a month on the average while awards for disabled workers under social security averaged about $1,125.

While both the Railroad Retirement and Social Security Acts provide benefits to workers who are totally disabled for any regular work, the Railroad Retirement Act also provides disability benefits specifically for career employees who are disabled for work in their regular railroad occupation. Career employees may be eligible for such an occupational disability annuity at age 60 with 10 years of service, or at any age with 20 years of service.

4. Can railroaders receive benefits at earlier ages than workers under social security?

Railroad employees with 30 or more years of creditable service are eligible for regular annuities based on age and service the first full month they are age 60, and rail employees with less than 30 years of creditable service are eligible for regular annuities based on age and service the first full month they are age 62.

No early retirement reduction applies if a rail employee retires at age 60 or older with 30 years of service and his or her retirement is after 2001, or if the employee retired before 2002 at age 62 or older with 30 years of service.

Early retirement reductions are otherwise applied to annuities awarded before full retirement age — the age at which an employee can receive full benefits with no reduction for early retirement. This ranges from age 65 for those born before 1938 to age 67 for those born in 1960 or later, the same as under social security.

Under social security, a worker cannot begin receiving retirement benefits based on age until age 62, regardless of how long he or she worked, and social security retirement benefits are reduced for retirement prior to full retirement age regardless of years of coverage.

5. Does social security offer any benefits that are not available under railroad retirement?

Social security does pay certain types of benefits that are not available under railroad retirement. For example, social security provides children’s benefits when an employee is disabled, retired or deceased. Under current law, the Railroad Retirement Act only provides children’s benefits if the employee is deceased.

However, the Railroad Retirement Act includes a special minimum guaranty provision which ensures that railroad families will not receive less in monthly benefits than they would have if railroad earnings were covered by social security rather than railroad retirement laws. This guaranty is intended to cover situations in which one or more members of a family would otherwise be eligible for a type of social security benefit that is not provided under the Railroad Retirement Act. Therefore, if a retired rail employee has children who would otherwise be eligible for a benefit under social security, the employee’s annuity can be increased to reflect what social security would pay the family.

6. How much are monthly benefits for survivors under railroad retirement and social security?

Survivor benefits are generally higher if payable by the RRB rather than social security. At the end of fiscal year 2009, the average annuity being paid to all aged and disabled widow(er)s averaged $1,285 a month, compared to $1,100 under social security.

Benefits awarded by the RRB at the end of fiscal year 2009 to aged and disabled widow(er)s of railroaders averaged approximately $1,725 a month, compared to about $890 under social security.

The annuities being paid at the end of fiscal year 2009 to widowed mothers/fathers averaged $1,595 a month and children’s annuities averaged $935, compared to $840 and $745 a month for widowed mothers/fathers and children, respectively, under social security.

Those awarded at the end of fiscal year 2009 averaged $1,620 a month for widowed mothers/fathers and $1,240 a month for children under railroad retirement, compared to $820 and $750 for widowed mothers/fathers and children, respectively, under social security.

7. How do railroad retirement and social security lump-sum death benefit provisions differ?

Both the railroad retirement and social security systems provide a lump-sum death benefit. The railroad retirement lump-sum benefit is generally payable only if survivor annuities are not immediately due upon an employee’s death. The social security lump-sum benefit may be payable regardless of whether monthly benefits are also due. Both railroad retirement and social security provide a lump-sum benefit of $255. However, if a railroad employee completed 10 years of creditable railroad service before 1975, the average railroad retirement lump-sum benefit payable is $990. Also, if an employee had less than 10 years of service, but had at least 5 years of such service after 1995, he or she would have to have had an insured status under social security law (counting both railroad retirement and social security credits) in order for the $255 lump-sum benefit to be payable.

The social security lump sum is generally only payable to the widow(er) living with the employee at the time of death. Under railroad retirement, if the employee had 10 years of service before 1975, and was not survived by a living-with widow(er), the lump sum may be paid to the funeral home or the payer of the funeral expenses.

8. How do railroad retirement and social security payroll taxes compare?

Railroad retirement payroll taxes, like railroad retirement benefits, are calculated on a two-tier basis. Rail employees and employers pay tier I taxes at the same rate as social security taxes, 7.65 percent, consisting of 6.20 percent for retirement on earnings up to $106,800 in 2010 and 1.45 percent for Medicare hospital insurance on all earnings.

In addition, rail employees and employers both pay tier II taxes which are used to finance railroad retirement benefit payments over and above social security levels.

In 2010, the tier II tax rate on employees is 3.9 percent and on rail employers it is 12.1 percent on employee earnings up to $79,200.

9. How much are regular railroad retirement taxes for an employee earning $106,800 in 2010 compared to social security taxes?

The maximum amount of regular railroad retirement taxes that an employee earning $106,800 can pay in 2010 is $11,259, compared to $8,170.20 under social security. For railroad employers, the maximum annual regular retirement taxes on an employee earning $106,800 are $17,753.40 compared to $8,170.20 under social security. Employees earning over $106,800, and their employers, will pay more in retirement taxes than the above amounts because the Medicare hospital insurance tax of 1.45 percent is applied to all earnings.

UTU opposes taxing health care benefits

WASHINGTON – The UTU and 30 other trade unions have jointly written members of Congress in opposition “to any proposal” that would pay for health care reform “by altering the tax treatment of employer-provided health care.

“We believe this would be a step in the wrong direction that could jeopardize the overall reform effort,” wrote the 31 trade unions.

“Over 160 million Americans receive their health coverage through the workplace, either as an employee, dependent or retiree. Both Congress and the president have said health care reform will build on what works and have assured Americans they can keep the coverage they have if they like it. This makes good political and policy sense.

“Eliminating or capping the tax exclusion for employer-provided health care benefits – based on income, the premium level or a combination of the two – would threaten to undermine this primary source of health care coverage for most Americans.

“First, it would remove a key incentive that employers have in providing the benefit. This could lead employers either to change substantially or eliminate health care plans.

“Second, if workers have to pay what amounts to a tax increase at possibly both the federal and state levels, that could lead younger, healthier workers to pass up employer-sponsored coverage for less comprehensive plans. This would drive up the cost of coverage for older, less healthy workers, leading to the unraveling of employer-sponsored coverage.

“Contrary to the arguments put forward by proponents of proposals to eliminate or cap the tax exclusion for employer-provided health care benefits, this would not be an effective means for containing health care utilization and costs and curbing so-called “Cadillac” health care plans.

“Instead, it would simply penalize persons who happen to be in plans that have higher costs because of factors beyond their control – that is, plans with more older workers, plans covering geographic areas with higher costs or plans sponsored by small businesses that have higher administrative costs.

“Over the past several years, almost all of our members have sacrificed wages in bargaining in order to keep decent health care coverage. These hard-working people are already in immense economic distress. Imposing what amounts to a tax increase upon them is unfair and very unpopular.

“In 2009, a national survey done by Lake Research Partners, shows that 80 percent of likely voters said they are opposed to taxing health benefits. The president campaigned against eliminating the tax exclusion of health care benefits and the public overwhelmingly agreed with this position.

“It’s obvious the American people want health care costs lowered, not increased. They expect the Congress to make coverage more affordable, not less. Any result to the contrary may undermine their support for the program.

“For all the foregoing reasons, we urge you to oppose any proposals to alter the tax treatment of employer provided health care,” said the letter to Congress.