Purpose

The purpose of this program letter is to inform you of:

• a new benefit year beginning date and qualifications;

• an increase in the maximum daily benefit rate;

• a new dollar threshold for determining whether the earnings test applies.

• the discontinuation of form letter ID-30, Notice Under Section 2(f) of Railroad Unemployment Insurance Act

Form Letter ID-30 Discontinued

Effective July 1, 2006 the RRB will no longer send Notice Under Section 2(f) Of Railroad Unemployment Insurance Act (form letter ID-30) to payroll offices when employees indicate on unemployment applications that they may receive wage guarantee payments or pay for time lost. The Notice of RUIA Claim Determination (form letter ID-4E) or its electronic equivalent notice via RaiLinc constitutes sufficient and timely notice of benefit payments that may be subject to reimbursement under section 2(f) of the RUIA.

You should continue to obtain information from the RRB about the amount of reimbursement due under section 2(f) by email or facsimile. Please refer to Program Letter No. 2006-05 for additional information on 2(f) reimbursement requirements..


New benefit year

A new benefit year for railroad unemployment and sickness insurance benefits begins July 1, 2006 and ends June 30, 2007.

New benefit year qualifications

To qualify for benefits in the new benefit year, an employee must have $2,875.00 in creditable railroad earnings in calendar year 2005, counting no more than $1,150.00 per month. If 2005 was an employee's first year of railroad work, he or she must also have railroad service in at least 5 months of 2005.

Waiting period

Benefits are payable for days of unemployment or sickness over 7 in an employee's first 14 day claim in the new benefit year. This satisfies a required one-week waiting period. The one-week waiting period applies to both the first claim for unemployment benefits and the first claim for sickness benefits in the benefit year. In order to satisfy the waiting period requirement, the first claim must contain more than 4 days of unemployment or sickness. Initial sickness claims must begin with 4 consecutive days of sickness. After the waiting period is satisfied, benefits are generally payable for the number of days of unemployment or sickness over 4 in each 14-day claim period.

The change in benefit years will not cause an interruption in the payment of normal benefits to claimants who continue to be unemployed or sick from one benefit year into the next benefit year. An employee who continues to be unemployed or sick from one benefit year into the next needs to satisfy only one waiting period; a second waiting period is not required when the employee's benefit claims continue into a new benefit year.

Employees who are currently receiving extended unemployment benefits or extended sickness benefits also do not have another waiting period at this time. A new waiting period is required only if the employee claims benefits in the new benefit year. The new benefit year begins after the end of the extension of the previous benefit year.

Maximum daily benefit rate

The maximum daily benefit rate for railroad unemployment and sickness benefits increases to $57.00 for registration periods beginning after June 30, 2006. The maximum daily benefit rate is indexed to national wage levels.

The maximum benefit rate will yield $570.00 for two full weeks of unemployment or sickness (10 days at $57.00 per day). Some sickness benefits are subject to withholding of 7.65% for tier I retirement taxes, which can reduce biweekly payments to $526.39 from $570.00 for a full 2-week claim.

Earnings test rules

Under the RUIA’s earnings test provision, unemployment benefits are not payable for any registration period in which the total amount of an employee's earnings or other remuneration from railroad and non-railroad work for days in the period exceeds the amount of the RUIA monthly compensation base. For claims in benefit year 2005, the earnings test amount is $1,130.00; for claims in benefit year 2006, the earnings test amount is $1,150.00.

Note: Although no benefits are payable for days denied because of the earnings test, the days remain days of unemployment for purposes of satisfying the waiting period requirement and determining periods of continuing unemployment. In addition, the earnings test does not apply to claims for sickness benefits..

Reporting earnings on prepayment notices

When you review our notices of unemployment claims filed by your employees, please check on whether the employee's earnings for days in the period exceeded the amount of the monthly compensation base. Earnings include pay employees did not earn because they failed to mark up, report for duty on time, or were otherwise not available for work.

Use the following table to determine how to report the amount of the employee's earnings.