Railroad unemployment and sickness benefits will increase slightly due to new sequestration rate
(Source: Railroad Retirement Board press release, September 27, 2019)
CHICAGO ó Starting October 1, 2019, the U.S. Railroad Retirement Board (RRB) will reduce railroad unemployment and sickness insurance benefits by 5.9 percent, down from the current 6.2 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, 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 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 $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 percent. Applying the 5.9 percent reduction to these sickness benefits will result in a maximum 2-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 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, 6.6 percent in October 2017, and 6.2 percent 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.
Thursday, October 10, 2019
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