Railroad Unemployment and Sickness Benefits adjusted due to sequestration rate
(Source: Railroad Retirement Board press release, September 29, 2017)
CHICAGO ó Beginning October 1, 2017, the U.S. Railroad Retirement Board (RRB) reduced railroad unemployment and sickness insurance benefits by 6.6 percent, down from the current 6.9 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, 2018, 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 $72, so the 6.6 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 $720.00 to $672.48.
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 6.6 percent reduction to these sickness benefits will result in a maximum 2-week total of $621.04.
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, and 6.9 percent in October 2016, as required by law.
In fiscal year 2016, the RRB paid $12.3 billion in retirement and survivor benefits to about 553,000 beneficiaries, and net unemployment-sickness benefits of $133.3 million to approximately 31,500 claimants.
Thursday, October 12, 2017
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