Posts Tagged ‘sequestration’

RRB: Sequestration hits unemployment and sickness benefits

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.

Rail workers of all unions urged to end RRB unemployment sequestration

U.S. rail unions have united in an effort to overturn the sequestration of Railroad Unemployment Insurance Act (RUIA) benefits that was enacted by a GOP-held Congress during the Obama administration and continues to reduce the unemployment and sickness benefits of railroaders nearly a decade later.

A large bloc of the unions are represented by AFL-CIO’s Transportation Trades Department (TTD), of which the SMART Transportation Division is a member.

A letter to U.S. Sens. Rob Portman and Sherrod Brown of Ohio sent by the union coalition requested that they jointly co-sponsor language consistent with the HEROES Act (H.R. 6800) to eliminate RUIA benefits from sequestration by amending the Balanced Budget and Emergency Deficit Control Act of 1985 to include RUIA among the other various programs that are not subject to sequestration. Portman, a Republican out of Cincinnati, is chairman of the Senate subcommittee that will make a decision on sequestration.

“Unlike the average U.S. worker, railroad employees do not receive unemployment benefits through state-administered unemployment insurance programs. Instead, unemployed railroaders receive these benefits through the RUIA program, which is administered by the United States Railroad Retirement Board (RRB),” TTD President Larry Willis said. “As a result of the Budget Control Act of 2011, RUIA (benefits) are subject to sequestration. No state unemployment insurance benefits in the country are subject to this unfair treatment.”

RUIA unemployment and sickness benefits are sequestered at 5.9%, and have been subject to reduction for nine years. These rates are adjusted when the federal sequestration is recalculated yearly.

Railroaders are urged to call Portman at (202) 224-3353 to tell him to exclude RRB sickness and unemployment benefits from those reductions.

Read the unions’ joint letter to the senators.

Railroad unemployment and sickness benefits reduced again due to sequestration

Starting October 1, 2019, the U.S. Railroad Retirement Board (RRB) will reduce railroad unemployment and sickness insurance benefits by 5.9%, down from the current 6.2% reduction, as required by law.

The adjusted reduction is based on revised projections of benefit claims and payments under the Railroad Unemployment Insurance Act. It will remain in effect through September 30, 2020, 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 is $78.00, so the 5.9% reduction in railroad unemployment and sickness benefits will reduce the maximum amount payable in a two-week period with 10 days of unemployment from $780.00 to $733.98.

Certain railroad sickness benefits are also subject to regular tier I railroad retirement taxes, resulting in a further reduction of 7.65%. Applying the 5.9% reduction to these sickness benefits will result in a maximum two-week total of $677.83.

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, which is subject to revision at the beginning of each fiscal year.

When sequestration first took effect in March 2013, railroad unemployment and sickness benefits were subject to a 9.2% reduction. This amount was then adjusted to 7.2% in October 2013, 7.3% in October 2014, 6.8% in October 2015, 6.9% in October 2016, 6.6% in October 2017, and 6.2% in October 2018, as required by law.

In fiscal year 2018, the RRB paid about $12.7 billion in retirement and survivor benefits to about 540,000 beneficiaries, and net unemployment-sickness benefits of about $92.6 million to approximately 24,000 claimants.

New sequestration rate cuts into railroad unemployment and sickness benefits

Starting October 1, 2018, the U.S. Railroad Retirement Board (RRB) will reduce railroad unemployment and sickness insurance benefits by 6.2 percent, down from the current 6.6 percent 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. It will remain in effect through September 30, 2019, the end of the fiscal year. Reductions in future fiscal years, should they occur, will be calculated based on applicable law.

The daily benefit rate is $77, so the 6.2 percent reduction in railroad unemployment and sickness benefits will reduce the maximum amount payable in a 2-week period with 10 days of unemployment from $770.00 to $722.26.

Certain railroad sickness benefits are also subject to regular tier I railroad retirement taxes, resulting in a further reduction of 7.65 percent. Applying the 6.2 percent reduction to these sickness benefits will result in a maximum 2-week total of $667.01.

These reductions are required under the Budget Control Act of 2011 and a subsequent sequestration order to implement the mandated cuts. The law exempted social security benefits, as well as railroad retirement, survivor and disability benefits paid by the RRB, from sequestration.

When sequestration first took effect in March 2013, railroad unemployment and sickness benefits were subject to a 9.2 percent reduction. This amount was then adjusted to 7.2 percent in October 2013, 7.3 percent in October 2014, 6.8 percent in October 2015, 6.9 percent in October 2016, and 6.6 percent in October 2017, as required by law.

In fiscal year 2017, the RRB paid almost $12.6 billion in retirement and survivor benefits to about 548,000 beneficiaries, and net unemployment-sickness benefits of almost $105.4 million to approximately 28,000 claimants.