Two bills tabled on Tuesday by Democratic state lawmakers aim to make a number of changes to the state’s new long-term care benefit, which will be funded by a tax on the wages of millions of workers from Washington.
A bill – originally sponsored by House Majority Leader Pat Sullivan (D-Covington) – would delay the collection of payroll tax until July 1, 2023.
This tax, 0.58% of a worker’s total salary, came into effect on January 1. By law, employers must deduct the tax from their employees’ income and then remit it to the state.
After a group of Democratic state Senate leaders urged Gov. Jay Inslee to delay tax collection until the New Year, Inslee ordered the state’s Department of Employment Security not to not collect this tax from employers. Inslee said he did not have the power to prevent employers from collecting taxes from their employees; only the state legislature has the power to do this, he said.
Even though the state’s Department of Job Security has been ordered not to collect the tax, employers are required by law to collect the tax from their employees. Another provision in Representative Sullivan’s bill would require the state to reimburse all premiums levied on workers between Jan. 1 and the date the bill comes into force.
The Long-Term Care Allowance – known as the WA Cares Fund – was passed by the Legislature in 2019. It basically serves as long-term care insurance provided by the state. Starting in 2025, eligible adults can start claiming up to $ 36,500 to pay for long-term care costs, such as meals delivered and home care.
But a number of issues with the program were highlighted in the months leading up to when the state began collecting payroll tax. The main criticism is that many will be forced to contribute to the program but will never see any benefit from it.
This includes about 150,000 people who work in Washington but live elsewhere, such as Idaho or Oregon.
This also includes seniors who plan to retire soon – you must contribute to the program for at least three consecutive years to receive benefits – as well as those who move or retire to another state, and military personnel who enter and leave Washington.
The second bill – introduced by Rep. Dave Paul (D-Oak Harbor) – would address some of these problems.
It would allow the following people to opt out of payroll tax: those living in another state, spouses or partners of active military personnel, and temporary workers with nonimmigrant visas.
Both bills were pre-tabled on Tuesday, meaning they can be heard as soon as the Legislative Assembly is in session. Lawmakers will meet for the 2022 legislative session on January 10.