Private rail pensions may reduce supplemental annuities
Railroad Retirement beneficiaries are reminded that receipt of a private railroad pension may reduce the amount of a supplemental annuity payable by the Railroad Retirement Board (RRB). The following questions and answers provide information on this subject and how 401(k) plans are affected by the Railroad Retirement Act (RRA).
1. What are the eligibility requirements for a supplemental annuity?
Monthly supplemental annuities are payable to employee annuitants with 25 or more years of rail service, a “current connection” with the railroad industry, and at least one month of creditable rail service before October 1981. Individuals with 30 years or more of rail service may begin receiving a supplemental annuity at age 60, whereas individuals with 25-29 years of service may do so at age 65. (Disabled annuitants under full retirement age, which is gradually rising to age 67 for those born in 1960 or later, must relinquish employment rights in order for a supplemental annuity to be paid by the RRB.) Monthly supplemental annuity rates vary based on an annuitant’s years of rail service. The maximum monthly supplemental annuity rate is $43.
2. How does the receipt of a private railroad pension affect payment of a supplemental annuity?
If a retired employee also receives a private pension funded entirely, or in part, by a railroad employer, the supplemental annuity is permanently reduced by the amount of the monthly pension that is based on the railroad employer’s contributions. However, if the employer reduces the pension for the employee’s entitlement to a supplemental annuity, the amount by which the pension is reduced is restored to the supplemental annuity (but does not raise it over the $43 maximum). There is no reduction for a pension paid by a railroad labor organization.
3. What if an employee elects to receive the pension in a lump-sum payment instead of as a monthly benefit?
If a retired employee elects to receive his or her pension in a lump-sum payment instead of as a monthly benefit, the supplemental annuity is reduced in the same way as it would be if the employee was receiving the monthly benefit. (If the lump sum is paid in installments, the installment payments are not considered monthly benefit payments, but part of the single lump-sum payment.)
4. Does the receipt of a 401(k) plan distribution reduce the amount of a supplemental annuity?
No. In Legal Opinion L-2014-2, issued January 13, 2014, the RRB’s general counsel determined that 401(k) plans should not be considered supplemental pension plans as defined by the Railroad Retirement Act and, therefore, employee supplemental annuities should not be reduced due to the receipt of 401(k) distributions.
5. Are employee contributions to a 401(k) plan subject to Railroad Retirement Tier I and Tier II payroll taxes?
Yes. Federal budget legislation enacted in 1989 and effective January 1, 1990, provided that employee contributions to 401(k) plans are subject to Railroad Retirement payroll taxes and brought the treatment of 401(k) plans under Railroad Retirement law into conformity with the treatment of such plans under Social Security law. Consequently, employee contributions to a 401(k) plan are also treated as creditable compensation for Railroad Retirement benefit purposes. (For example, an employee earning $40,000 a year, but who has 10% of his earnings deferred under a 401(k) plan, would have only $36,000 reported to the IRS as earnings subject to federal income tax. However, the entire $40,000 would be subject to Railroad Retirement payroll taxes and therefore creditable as compensation under the Railroad Retirement Act.)
6. How can a person get more information about how private rail pensions and 401(k) plan payments affect supplemental annuities?
More information is available on RRB.gov or by contacting an RRB field office. It is important to know that while nearly all of the RRB’s 53 field offices are physically closed to the public until further notice because of the COVID-19 outbreak, they remain accessible by email and phone. Customers are encouraged to send a secure email to their local office by accessing the Field Office Locator and clicking on the link at the bottom of their local office’s page. Customers who prefer talking to an RRB employee can call the agency’s toll-free number (1-877-772-5772); however, they may experience lengthy wait times due to increased call volume caused by COVID-19 related issues.
Medicare Part B premiums for 2021
The Centers for Medicare & Medicaid Services (CMS) has announced that the standard monthly Part B premium will be $148.50 in 2021, an increase of $3.90 from $144.60 in 2020. Some Medicare beneficiaries will pay less than this amount because, by law, Part B premiums for current enrollees cannot increase by more than the amount of the cost-of-living adjustment for Social Security (Railroad Retirement Tier I) benefits.
Since the cost-of-living adjustment is 1.3% in 2021, some Medicare beneficiaries will see an increase in their Part B premiums but still pay less than $148.50. The standard premium amount will also apply to new enrollees in the program. However, certain beneficiaries will continue to pay higher premiums based on their modified adjusted gross income.
The monthly Part B premiums that include income-related adjustments for 2021 will range from $207.90 to $504.90, depending on the extent to which an individual beneficiary’s modified adjusted gross income exceeds $88,000 (or $176,000 for a married couple). The highest rate applies to beneficiaries whose incomes exceed $500,000 (or $750,000 for a married couple). CMS estimates that about 7% of Medicare beneficiaries pay the larger income-adjusted premiums.
Beneficiaries in Medicare Part D prescription drug coverage plans pay premiums that vary from plan to plan. Part D beneficiaries whose modified adjusted gross income exceeds the same income thresholds that apply to Part B premiums also pay a monthly adjustment amount. In 2021, the adjustment amount ranges from $12.30 to $77.10.
The Railroad Retirement Board withholds Part B premiums, Part B income-related adjustments and Part D income-related adjustments from benefit payments it processes. The agency can also withhold Part C and D premiums from benefit payments if an individual submits a request to his or her Part C or D insurance plan.
The following tables show the income-related Part B premium adjustments for 2021. The Social Security Administration (SSA) is responsible for all income-related monthly adjustment amount determinations. To make the determinations, SSA uses the most recent tax return information available from the Internal Revenue Service. For 2021, that will usually be the beneficiary’s 2019 tax return information. If that information is not available, SSA will use information from the 2018 tax return.
Railroad Retirement and Social Security Medicare beneficiaries affected by the 2021 Part B and D income-related premiums will receive a notice from SSA by the end of the year. The notice will include an explanation of the circumstances when a beneficiary may request a new determination. Persons who have questions or would like to request a new determination should contact SSA after receiving their notice.
Additional information about Medicare coverage, including specific benefits and deductibles, can be found at www.medicare.gov.
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2021 PART B PREMIUMS
Beneficiaries who file an individual tax return with income:
Beneficiaries who file a joint tax return with income:
Income-related monthly adjustment amount
Total monthly Part B premium amount
Less than or equal to $88,000
Less than or equal to $176,000
Greater than $88,000 and less than or equal to $111,000
Greater than $176,000 and less than or equal to $222,000
Greater than $111,000 and less than or equal to $138,000
Greater than $222,000 and less than or equal to $276,000
Greater than $138,000 and less than or equal to $165,000
Greater than $276,000 and less than or equal to $330,000
Greater than $165,000 and less than or equal to $500,000
Greater than $330,000 and less than or equal to $750,000
$500,000 and above
$750,000 and above
The monthly premium rates paid by beneficiaries who are married, but file a separate return from their spouses and who lived with their spouses at some time during the taxable year, are different. Those rates are as follows:
Beneficiaries who are married, but file a separate tax return, with income:
Income-related monthly adjustment amount
Total monthly Part B premium amount
Less than or equal to $88,000
Greater than $88,000 and less than or equal to $412,000
WASHINGTON – U.S. Senators Rob Portman (R-Ohio) and Amy Klobuchar (D-Minn.) introduced S. 4860, the Railroad Employee Equality and Fairness Act or the REEF Act, which would end the sequester on the Railroad Retirement Board’s (RRB) Unemployment Insurance Account. Due to the Budget Control Act of 2011, and a subsequent sequestration order to implement mandated spending cuts, railroad unemployment benefits have been reduced by a set percentage that is subject to revision at the beginning of each fiscal year. Currently, the sequester, as it relates to the RRB, continues until fiscal year 2030. Without this legislation, it is expected that the sequestration will result in a 5.7 percent reduction in railroad unemployment benefits through fiscal year 2030.
Since most interstate railroad workers’ payroll taxes are diverted to the RRB, unemployed railroad workers are not eligible for federal unemployment insurance benefits, which was not subject to the sequester. This resulted in railroad workers taking a cut in expected benefits that the general public was not subject to. This is particularly concerning during the ongoing COVID-19 pandemic. In 2019, the RRB received 35,030 unemployment claims. As of September 2020, it has received 133,899 claims, nearly a fourfold increase.
“I’m proud to introduce this bipartisan legislation to ensure that unemployed railroad workers receive fair and equal unemployment benefits. This legislation would remove the harmful sequester that largely singled out railroad workers’ unemployment benefits during the ongoing COVID-19 pandemic. The impact of the sequester has meant these railroad workers have not received the full unemployment insurance benefits that are due to them. The COVID-19 pandemic has caused nearly five times as many Ohio railroad workers to lose their jobs through no fault of their own and I urge my colleagues to join me in ensuring they are eligible for the same full unemployment benefits as all Americans,” said Portman.
“Our workers are facing enormous challenges due to the coronavirus pandemic and railroad workers have been hit particularly hard,” Klobuchar said. “This legislation ensures railroad employees are eligible for the same benefits as other workers and will help them get through these trying times.”
S. 4860 was read twice before the Senate Oct. 26 and referred to the Committee on the Budget. No other actions have taken place.
Most railroad retirement annuities, like social security benefits, will increase in January 2021 due to a rise in the Consumer Price Index (CPI) from the third quarter of 2019 to the corresponding period of the current year.
Cost-of-living increases are calculated in both the tier I and tier II benefits included in a railroad retirement annuity. Tier I benefits, like social security benefits, will increase by 1.3 percent, which is the percentage of the CPI rise. Tier II benefits will go up by 0.4 percent, which is 32.5 percent of the CPI increase. Vested dual benefit payments and supplemental annuities also paid by the Railroad Retirement Board (RRB) are not adjusted for the CPI change.
In January 2021, the average regular railroad retirement employee annuity will increase $30 a month to $2,936 and the average of combined benefits for an employee and spouse will increase $42 a month to $4,263. For those aged widow(er)s eligible for an increase, the average annuity will increase $16 a month to $1,453. However, widow(er)s whose annuities are being paid under the Railroad Retirement and Survivors’ Improvement Act of 2001 will not receive annual cost-of-living adjustments until their annuity amount is exceeded by the amount that would have been paid under prior law, counting all interim cost-of-living increases otherwise payable. About 54 percent of the widow(er)s on the RRB’s rolls are being paid under the 2001 law.
If a railroad retirement or survivor annuitant also receives a social security or other government benefit, such as a public service pension, any cost-of-living increase in that benefit will offset the increased tier I benefit. However, tier II cost-of-living increases are not reduced by increases in other government benefits. If a widow(er) whose annuity is being paid under the 2001 law is also entitled to an increased government benefit, her or his railroad retirement survivor annuity may decrease.
However, the total amount of the combined railroad retirement widow(er)’s annuity and other government benefits will not be less than the total payable before the cost-of-living increase and any increase in Medicare premium deductions.
The cost-of-living increase follows a tier I increase of 1.6 percent in January 2020 and 2.8 percent in January 2019, the latter of which had been the largest in 7 years. The Centers for Medicare and Medicaid Services will announce Medicare Part B premiums for 2021 later this year, and this information will be available then at www.medicare.gov.
In late December the RRB will mail notices to all annuitants providing a breakdown of the annuity rates payable to them in January 2021.
Railroad Unemployment and Sickness Benefits Will See Slight Decrease in New Sequestration Reduction Rate
Under the Budget Control Act of 2011, and a subsequent sequestration order to implement mandated cuts, railroad unemployment and sickness insurance benefits are reduced by a set percentage that is subject to revision at the beginning of each fiscal year.
Starting October 1, 2020, the U.S. Railroad Retirement Board (RRB) will reduce railroad unemployment and sickness insurance benefits by 5.7%, down from the current 5.9% reduction, as required by law. The adjusted reduction amount is based on revised projections of benefit claims and payments under the Railroad Unemployment Insurance Act and will remain in effect through September 30, 2021, the end of the fiscal year. Reductions in future fiscal years, should they occur, will be calculated based on applicable law.
The current daily benefit rate for both unemployment and sickness is $80.00. Applying the sequestration rate of 5.7%, the maximum amount payable in a two-week period will be reduced from $800.00 to $754.40. Sickness benefits paid to an employee within six months from the date last worked for a reason other than an on-the-job injury are also subject to regular tier I railroad retirement taxes, resulting in a further reduction of 7.65%. Applying the 5.7% reduction to these sickness benefits will result in a maximum two-week total of $696.69.
In fiscal year 2019, the RRB paid about $13 billion in retirement and survivor benefits to about 535,000 beneficiaries, and net unemployment-sickness benefits of about $93.4 million to approximately 23,000 claimants.
Railroad Retirement Board Labor Member John Bragg released the following message on Aug. 4:
Brothers and Sisters:
RRB Labor Member John Bragg
In my last update on July 9, 2020, I informed you of correspondence that the Railroad Retirement Board (RRB) received from the White House alleging that the National Railroad Retirement Investment Trust (NRRIT) was investing in companies which posed national security threats and raised humanitarian concerns. We were assured by NRRIT that it was not investing in these companies and that it has screening processes in place that identify those companies so that it does not and will not invest in them. Given the seriousness of the allegations, the RRB Board members assured the White House that a follow up with NRRIT would occur. The RRB Board Members sent a letter to NRRIT, again sharing some concerns, and followed up with a conference call on July 29th. NRRIT formally responded to the concerns raised in a letter dated July 30, 2020. That letter is attached for your viewing.
I want to reiterate that our trust fund is stable and NRRIT’s investments are producing the returns needed to ensure the stability of the fund well into the future. Every railroader has the right to retire with financial security and a sense of dignity. The RRB, with the help of NRRIT and its investments, helps ensure that right.
Labor Member, Railroad Retirement Board
A letter issued from the Labor Member of the Railroad Retirement Board, John Bragg, addressed criticism by White House staff leveled toward RRB regarding investments in Chinese enterprises. Bragg’s response is reproduced below and links to supporting documentation are also available in the text below.
July 9, 2020
Brothers and Sisters:
As many of you may know, our retirement trust fund is one of the healthiest in the country. The National Railroad Retirement Investment Trust (NRRIT), manages and makes the investment decisions of the railroad retirement funds and to date has helped produce returns that secure our trust fund well into the future. NRRIT is an independent non-federal entity governed by a seven-member Board, with three selected by rail management, three selected by rail labor, and one independent trustee selected by the six rail trustees. The best interest of the trust fund and the security that it provides to the rail community is always at the forefront of their duties.
However, just this week, the Chairman of the RRB received a letter from Larry Kudlow, Director of the National Economic Council, along with National Security Adviser Robert O’Brien expressing concerns over NRRIT’s investment in Chinese companies. The letter alleged that NRRIT was investing in two Chinese companies specifically that pose an economic risk to the trust funds of railroad employees. NRRIT had already assured us last month that it did not hold any interest in the companies named in the letter.
The Railroad Retirement Board (RRB) administers the Railroad Unemployment Insurance Act (RUIA), which 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 health conditions related to pregnancy, miscarriage or childbirth. A new benefit year begins each July 1.
The following questions and answers describe these benefits, their eligibility requirements, and how to claim them. In addition, it details how the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, affects the RRB’s administration of benefits under the RUIA.
1. What are the eligibility requirements for railroad unemployment and sickness benefits in July 2020?
To qualify for normal railroad unemployment or sickness benefits, an employee must have had railroad earnings of at least $4,012.50 in calendar year 2019, counting no more than $1,605 for any month. Those who were first employed in the rail industry in 2019 must also have at least five months of creditable railroad service in 2019.
Under certain conditions, employees who do not qualify on the basis of their 2019 earnings may still be able to receive benefits in the new benefit year. Employees with at least 10 years of service (120 or more months of service) who received normal benefits in the benefit year ending June 30, 2020, may be eligible for extended benefits, and employees with at least 10 years of service (120 or more months of service) might qualify for accelerated benefits if they have rail earnings of at least $4,137.50 in 2020, not counting earnings of more than $1,655 a month. (Please see Question 4 for information on provisions for extended unemployment benefits under the CARES Act.)
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 unemployment or sickness; not have voluntarily retired or, if claiming unemployment benefits, quit work without good cause; and, when claiming sickness benefits, be under age 65.
2. What if I’m not eligible for railroad unemployment benefits under the criteria listed in Question 1?
You may be eligible for benefits under a new temporary federal program called Pandemic Unemployment Assistance (PUA), which was created under the CARES Act. In general, PUA provides up to 39 weeks of unemployment benefits to individuals not eligible for regular unemployment compensation or extended benefits, including those who have exhausted all rights to such benefits. The PUA program is administered by individual states, not the RRB. For eligibility information, and to find the application process in each state, please visit careeronestop.org, and under the Find Local Help tab, select Unemployment Benefits Finder.
3. What is the daily benefit rate payable in the new benefit year beginning July 1, 2020?
Almost all employees will qualify for the maximum daily benefit rate of $80. Benefits are generally payable for the number of days of unemployment or sickness over four in 14-day claim periods, which yields $800 for each two full weeks of unemployment or sickness. Sickness benefits payable for the first 6 months after the month the employee last worked are subject to Tier I Railroad Retirement payroll taxes, unless benefits are being paid for an on-the-job injury.
Claimants should be aware that as a result of a sequestration order under the Budget Control Act of 2011, the RRB will reduce unemployment and sickness benefits by 5.9 percent through September 30, 2020. As a result, the total maximum amount payable in a 2-week period covering 10 days of unemployment or sickness will be $752.80. The maximum amount payable for sickness benefits subject to Tier I payroll taxes of 7.65 percent will be $695.21 over two weeks. It is expected that sequestration will force a 5.7 percent reduction in unemployment and sickness benefits beginning October 1, 2020. Future reductions, should they occur, will be calculated based on applicable law.
In addition, under the CARES Act, the amount of an unemployment benefit is increased by $1,200 per 2-week period. This increased amount, which is not subject to sequestration, is applied to any 2-week registration periods that began on or after April 1, 2020, through July 31, 2020. (Sequestration is not applied to benefit payments issued under the CARES Act.) The CARES Act includes a separate appropriation of $425 million to pay for this added “recovery benefit.” If this fund is exhausted, the new provision will no longer apply.
4. 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 2019, counting earnings up to $2,073 per month.
If normal benefits are exhausted, extended benefits are payable for up to 65 days (during 7 consecutive 14-day claim periods) to employees with at least 10 years of service (120 or more cumulative service months).
The CARES Act also authorizes payment of extended unemployment benefits to rail workers who received unemployment benefits from July 1, 2019, to June 30, 2020. Under the legislation, railroad workers with less than 10 years of service may be eligible for up to 65 days of extended benefits within 7 consecutive 2-week registration periods. Workers with 10 or more years of railroad service, who were previously eligible for up to 65 days in extended benefits, may now receive benefits for up to 130 days within 13 consecutive 2-week registration periods. No extended benefit period under this provision will begin after December 31, 2020.
5. What is the waiting period requirement for unemployment and sickness benefits?
There is a 7-day waiting period requirement, prior to any benefits becoming payable under the RUIA. During the first 14-day claim period, benefits are payable for every day claimed in excess of seven days. Subsequent claims are paid for the number of days of unemployment or sickness over four in each 14-day registration period. Initial sickness claims must also begin with four consecutive days of sickness. 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 in order to satisfy the waiting period for the current benefit year. 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.
Under the CARES Act, the 7-day waiting period required before railroad workers can receive unemployment or sickness benefits is temporarily eliminated. This applies to any 14-day registration period that began on or after March 28, 2020, and ends on or before December 31, 2020. (Please note that this is the only provision of the CARES Act that applies to both unemployment and sickness benefits.) Employees who previously submitted claims during this time and were charged with the 7-day waiting period will receive retroactive payments of these additional monies once our systems are ready to pay them. The legislation provides $50 million to cover the cost of eliminating the waiting period, and, as with the recovery benefit paid under the CARES Act, if this fund is exhausted, the new provision will no longer apply.
6. 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 not payable for days of unemployment during the first 14 days of the strike, but benefits are payable during subsequent 14-day periods.
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.
7. 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.
8. 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.
9. 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, paid leave, or other leave in a 14-day registration period are more than a certain indexed amount, no benefits are payable for any days of unemployment in that period. That registration period, however, can be used to satisfy the waiting period.
Earnings include pay from railroad and non-railroad work, as well as part-time work and self-employment. Earnings also include pay that an employee would have earned except for 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 2020, the amount is $1,605, which corresponds to the base year monthly compensation amount used in determining eligibility for benefits in each 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.
Earnings of $15 or less per day from work which is substantially less than full-time and not inconsistent with the holding of normal full-time employment may be considered subsidiary remuneration and may not prevent payment of any days in a claim. However, a claimant must report all full and part-time work on each claim, regardless of the amount of earnings, so the RRB can determine if the work affects benefits.
10. How does a person apply for and claim unemployment benefits?
Employees can apply for and claim unemployment benefits online or by mail. Individuals who have established an account through myRRB at RRB.gov can log in and file their applications and their biweekly claims online. Employees are encouraged to establish their accounts while still working to expedite the filing process for future unemployment benefits, and for access to other online services.
To apply by mail, claimants must obtain an Application for Unemployment Benefits (Form UI-1) from RRB.gov, or their labor organization or railroad employer. 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 from the date 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. Claimants who know in advance that they will be filing an unemployment application or claim late should include a signed statement explaining why they are unable to meet the required time frame.
Persons can find the address of the RRB office serving their area by visiting RRB.gov and clicking on Field Office Locator, or by calling the agency toll-free at 1-877-772-5772 and selecting the appropriate option from the automated menu.
The local RRB field office reviews the completed application, whether it was submitted online or by mail, and notifies the claimant’s current railroad employer, and base-year employer, if different. The employer has the right to provide information about the benefit application.
After processing the application, biweekly claim forms are made available on the RRB’s website, or are mailed to the claimant, as long as he or she remains unemployed and eligible for benefits. Claim forms should be signed and sent on or after the last day of the claim. This can be done online or by mail. The completed claim must be received by the RRB within 15 days of the end of the claim period, or within 15 days of the date the claim form was made available online or mailed to the claimant, whichever is later. Claimants mustnot file both an online and a paper claim form for the same period(s). Once an individual submits a claim online, all subsequent claim forms will be made available online only, and will no longer be mailed.
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 the RRB within 30 days of the first day for which he or she wants to resume claiming benefits. These claims may then be filed online or by mail.
11. How does a person apply for and claim sickness benefits?
An Application for Sickness Benefits (SI-1a) can be obtained from RRB.gov, a railroad labor organization, or a railroad employer. Applications for sickness benefits must be submitted to the agency by mail, or by fax at 312-751-7185. Subsequent claims may be completed online by those with myRRB accounts.
An application including a doctor’s statement of sickness is 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 claims cannot be paid without it.
The RRB suggests that employees keep an application for sickness benefits on hand, 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 (SI-1b). 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 a Statement of Authority to Act for Employee (Form SI-10), which accompanies the statement of sickness.
After completion, the forms should be mailed to the RRB’s headquarters in Chicago within 10 days from when the employee became sick or injured. 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. Upon receipt, the RRB will process the application and determine if the employee is eligible for sickness benefits.
After processing the application, the RRB provides biweekly claims to the qualified employee as long as he or she is eligible for benefits and remains unable to work due to illness or injury. Biweekly claims are made available for completion online (by those with anaccount at myRRB) or mailed to the claimant. Completed 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 made available online or mailed to the claimant, whichever is later. Benefits may be lost if an application or claim is filed late. Claimants who know in advance that they will be filing a sickness application or claim late should include a signed statement explaining why they are unable to meet the required time frame.
As with claims for unemployment benefits, once a claim for sickness benefits is submitted online, all subsequent claims will be made available online only, and will no longer be mailed.
Claimants are reminded that while claim forms for sickness benefits can be submitted online, applications must be mailedto the RRB. Statements of sickness may be mailed with the sickness application or faxed directly from the doctor’s office to the RRB at 312-751-7185. Faxes must include a cover sheet from the doctor’s office.
12. Is a claimant’s employer notified each time a biweekly claim for unemployment or sickness benefits is filed?
The RUIA requires the RRB to notify the claimant’s base-year employer each time a claim for benefits is filed. That employer has the right to submit information relevant to the claim before the RRB makes an initial determination on the claim. Benefits may not be paid at this time but the employee will receive a notice and have the right to appeal. In addition, if a claimant’s base-year employer is not his or her current employer, 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 ultimately successful. The employer also has the right to appeal an unfavorable decision to the RRB’s Bureau of Hearings and Appeals.
The RRB also conducts 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.
13. 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, the RRB will release a claim form or a denial letter within 10 days of receiving his or her application. If a claim for subsequent biweekly unemployment or sickness benefits is filed, the RRB will certify a payment or release a denial letter within 10 days of the date the RRB receives the claim form. If the claimant is entitled to benefits, his or her benefits will generally be paid within one week of that decision.
If a claimant does not receive a decision notice or payment within the specified time period, he or she may expect an explanation for the delay and an estimate of the time required to make a 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, or under special circumstances such as the current pandemic.
Regarding the payments authorized under the CARES Act, after making necessary programming changes to claims processing systems, the RRB started paying extended unemployment benefits and unemployment recovery payments on May 11, and May 28, respectively. As for payment of the additional monies related to the elimination of the 7-day waiting period, the agency hopes to complete the needed programming changes for this provision in the near future. The RRB will initially make retroactive payments to individuals eligible for the payments listed above who had previously submitted unemployment claims before moving on to processing new claims.
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.
14. 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.
15. How can claimants get more information on their railroad unemployment or sickness claims?
Claimants with online myRRB accounts can log in to view their individual railroad unemployment insurance account statement. This statement displays the type and amount of the claimant’s last five benefit payments, the claim period for which the payments were made, and the dates that the payments were approved. Individuals can also confirm the RRB’s receipt of applications and claims.
In addition, claimants can call the agency toll-free at 1-877-772-5772 to access information about the status of unemployment and sickness claims or payments 24 hours a day, 7 days a week. Individuals with questions about unemployment or sickness benefits, or who need information about their specific claims and benefit payments, can send a secure email to their local office by accessing Field Office Locator at RRB.gov and clicking on the link at the bottom of their local office’s page. If a customer absolutely needs to talk to an RRB employee, they can call the agency’s toll-free number (1-877-772-5772). However, customers are asked to be patient because of the increase in call volume due to the closure to the public of RRB offices during the COVID-19 pandemic.
The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act authorized a “recovery payment” for unemployed railroad workers in the amount of $1,200 per 2-week registration period. After making necessary programming changes to its claims processing systems, the U.S. Railroad Retirement Board (RRB) started making the payments on the evening of May 28.
In the initial round of processing, the agency made retroactive payments of $1,200 per 2-week registration period to individuals who had previously filed claims beginning on or after April 1. Those individuals had previously received unemployment insurance (UI) benefits in the amount of $733.98 to most claimants. The RRB estimates that the total amount of retroactive payments will be about $32 million. While the regular UI amount of $733.98 is reduced from $780 due to sequestration, the additional $1,200 recovery payment is not subject to reduction. However, it is subject to income taxation and garnishment for tax and other legally established debt.
Once these payments are completed, the RRB plans to start paying the additional $1,200 for new benefit claims the following day. The additional amount is payable on claims for days of unemployment through the 2-week claim period beginning July 31, 2020.
The CARES Act includes an appropriation of $425 million to pay for this added recovery payment. If these funds are exhausted before August 13, the end of the last eligible registration period, the added payment will no longer apply.
The CARES Act also authorized payment of extended benefits to rail workers who received UI benefits between July 1, 2019, and June 30, 2020. The RRB started paying the extended UI benefits on May 11, once again beginning with retroactive payments to individuals who had previously exhausted their regular UI benefits, before moving on to new claims.
The final piece of the CARES Act for the RRB is the elimination of a 1-week waiting period to receive benefits funded by an additional $50 million appropriation to cover this provision. The agency continues to diligently work on the needed programming for this provision, and hopes to have it completed in the near future. Again, the agency will initially make retroactive payments to individuals who had previously submitted UI claims before quickly moving on to processing new claims without the waiting period.
The RRB identified any eligible employees who previously received UI benefits for days of unemployment after April 1, 2020, so that the payments could be issued without the employee submitting additional information. For initial claims in the coming months, employees are encouraged to file them online through myRRB on the agency website, RRB.gov.
In my last update, I explained that Phase 2 of the Railroad Retirement Board’s (RRB) CARES Act implementation plan was targeted for completion by the end of May. Phase 2 of the RRB’s plan provides for the additional $1,200 per registration period for claims beginning April 1, 2020, or later. I am happy to report that final testing is underway as I draft this message. Barring any unforeseen complications, we anticipate making the first payments under Phase 2 within a week. I am grateful for the commitment of RRB employees who have worked tirelessly to implement computer programming changes to issue these payments, in recognition that they are crucial to our brothers and sisters in the railroad community.
RRB Labor Member John Bragg
Recently, we have been receiving inquiries regarding railroad employees filing for unemployment insurance (UI) benefits with the RRB while being compensated for work as union representatives. Employees must report all full-time and part-time work to the RRB when filing for benefits, including work as a union representative. If pay is received for a particular day, the employee should not claim the day as a day of unemployment. Instead, the employee should report the pay on the claim form with the appropriate code (for example, ‘E’ for a day employed, or ‘P’ for a vacation day or holiday pay). There are certain conditions where part-time work does not affect entitlement to benefits. In general, if the pay is no more than $15 a day for work which is substantially less than full-time and not inconsistent with the holding of full-time employment, it may be considered “subsidiary remuneration” and will not affect payment of UI benefits. Employees should keep in mind that the RRB must make a determination in advance of whether benefits are payable for days where part-time work was performed. Following are 2 examples provided for illustrative purposes:
Example 1: A claimant receives a salary of $350 per month for serving as secretary-treasurer of the local lodge of his union. He performs a variety of duties at his own convenience while holding down a full-time railroad job in his craft. The average payment per day is not more than $15 and therefore it will likely be determined to be subsidiary remuneration. If the claimant is laid off from his full-time railroad job but still receives $350 per month union salary, he should contact the RRB to see if unemployment benefits may be paid to him.
Example 2: A claimant receives a salary of $500 per month for serving as secretary-treasurer of the local lodge of his union. He performs a variety of duties at his own convenience while holding down a full-time railroad job in his craft. The average payment per day is more than $15 and therefore it will likely be determined not to be subsidiary remuneration. If the claimant is laid off from his full-time railroad job but still receives $500 per month union salary, it is likely no UI benefits would be payable as UI benefits would only be payable if the amount he was paid for the union work was subsidiary remuneration.
Additional guidance on the effects of part-time work and whether the compensation paid for such work meets the definition of subsidiary remuneration can be obtained by contacting the RRB at 1-877-772-5772.
The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, recently signed into law by President Trump, authorized extended unemployment insurance (UI) benefits for railroad workers sidelined during the COVID-19 pandemic. After making necessary programming changes to agency systems, the U.S. Railroad Retirement Board (RRB) began processing and paying extended benefits on May 11.
The CARES Act authorized payment of extended UI benefits to rail workers who received UI benefits from July 1, 2019, to June 30, 2020. Under the legislation, railroad workers with less than 10 years of service may be eligible for up to 65 days of extended benefits within 7 consecutive 2-week registration periods. Workers with 10 or more years of railroad service, who were previously eligible for up to 65 days in extended benefits, may now receive benefits for up to 130 days within 13 consecutive 2-week registration periods. No extended benefit period under this provision can begin after December 31, 2020.
The RRB will identify any employees who exhausted their regular UI benefits during the benefit year that began July 1, 2019, and send them a letter and claim forms to receive the extended benefits. The agency will also load appropriate claim forms to online accounts so that individuals can file them online through myRRB on the agency website, RRB.gov.
Since RRB offices are currently closed to the public due to the pandemic, railroad employees are encouraged to file for UI benefits by setting up an online myRRB account if they have not already done so.
The extended benefits are being paid from a previous appropriation under the American Recovery and Reinvestment Act of 2009, of which $140 million remains. As a result, these benefits will not be charged to rail employers in calculating their contribution rates to fund the railroad unemployment system. Extended benefits will be payable until a claimant’s eligibility is exhausted or the appropriation is depleted, whichever comes first.
While the extended benefits will not be subject to reduction due to budget sequestration, the RRB does remind recipients that the payments are subject to income taxation and garnishment for tax or other legally established debts.
The team responsible for programming adjustments continues to work diligently to update systems to allow for the payment of the additional CARES Act benefits. When that processing is completed, payment will be made to cover retroactive periods. Meanwhile, employees who met eligibility requirements for UI at the beginning of the benefit year but had exhausted those benefits will now be able to file for and again receive UI benefits.
I wanted to send out another update on what is going on at the agency. We have received inquiries regarding Pandemic Unemployment Assistance (PUA) that was established under the CARES Act and whether railroaders may be eligible for benefits under that program if they are not eligible for Railroad Unemployment Insurance Benefits (RUIA) benefits. The Department of Labor (DoL) is responsible for giving guidance to the states regarding the PUA benefits, so we asked the Railroad Retirement Board’s (RRB) General Counsel to reach out to the DoL. The RRB’s General Counsel has been advised by the DoL that nothing in the PUA provisions prohibit railroaders from being eligible for these benefits if they otherwise qualify. Similarly, the RRB’s General Counsel has found that there is nothing in the RUIA that prohibits railroaders from receiving PUA benefits if they are not receiving RUIA benefits. So as a result, I would recommend that if your members have been denied RUIA benefits, they check with their state unemployment services to see if they are eligible for PUA benefits. To find out the application process in each state, you can refer workers to the Unemployment Benefit Finder at the following website:
We have also received questions about the $1,200 one-time economic relief payment. The Department of Treasury is responsible for making those payments, so unfortunately, we do not have information about the timing of those payments. Information about the economic relief payments can be found at the following link: https://www.irs.gov/newsroom/economic-impact-payments-what-you-need-to-know
Though not related to COVID-19, I wanted to inform you of a new hire at the RRB. As you may remember from previous updates, the Board has been trying to hire a Chief Medical Officer. A new CMO, Dr. Elizabeth Bonson, has been hired and starts today. We hope that the CMO’s presence at the agency will help make the disability process more efficient.
Finally, as you know, the RRB is located in Chicago and this week, the governor of Illinois extended the stay-at-home order through May 30. I anticipate that the agency headquarters will continue to primarily work remotely. Regarding the field offices, although not all states have the same limitations as Illinois, at present it is my recommendation that it is in the best interests of agency personnel and the railroad population we serve to maintain the current work environment for all offices. Consequently, for the time being, field offices will remain closed to the public and staff will work remotely with periodic visits to the office for administrative tasks.
Labor member, Railroad Retirement Board
The purpose of this notice is to bring to your attention two changes which have been made to that guidance.
The first change relates to the instructions on filing applications and claims — specifically, the instructions related to the filing for sickness benefits. It is not a significant change, but I still wanted to bring it to your attention. Ordinarily, an applicant for sickness benefits must submit an application form and must also submit Form SI-1b, Statement of Sickness. Because the Form SI-1b requires a doctor’s signature and it was recognized that it may be difficult to get a physician to sign a statement during these unique circumstances, the RRB issued guidance indicating that, in lieu of Form SI-1b, a written statement could be submitted for the first claim. Because of the Paperwork Reduction Act and the manner in which federal agencies may collect information, that statement should now be submitted through an RRB Form G-93, Statement of Claimant or Other Person. You can find that form here: RRB Form-G-93. See also Questions 5-7 of the FAQs. A side benefit is that we believe this will simplify the process for those unable to obtain a Form SI-1b, as it is a fillable form.
The second change relates to the Q&As themselves. We have received numerous inquiries regarding the one-time-only economic relief payment provided by the CARES Act. The RRB is not responsible for these payments. Therefore, we have added the following as Q&A No. 16:
Q: Is the RRB going to pay the one-time-only economic relief payment available to individuals with income of $99,000 or less and couples with income of $198,000 or less?
I want to assure you that, while the worksite environment has changed considerably for RRB employees, the longstanding tradition of commitment to assuring that railroad workers receive the benefits that they have earned remains as strong as ever. These are unprecedented times and I will do my best to keep you informed. As we make changes accordingly, the agency will keep updating the website as well as the FAQs. Meanwhile, if you have additional questions, please don’t hesitate to reach out.
Labor Member, Railroad Retirement Board