WA Long Term Care Tax Kicks in July 1st, Paycheck Deductions
Beginning July 1st, working residents in WA will notice a little dip in their paychecks.
Long-term care tax will take $.58 cents out of every $100 earned
More commonly known as The WA Cares Fund, this insurance intended to address what supporters say are coverage issues for older citizens, including those who may require extended care at or near retirement age.
The supporters of the bill claimed 7 out of 10 Washington residents will need some sort of lengthy care when they are over the age of 65. However, the maximum benefit that can be taken by eligible persons is capped at $36,000.
Also, a worker must pay into the plan for at least ten consecutive years, without any gaps longer than five years, to be eligible. There are a few exceptions to these rules.
Many WA residents filed for the exemption before the deadline, the bill was passed in the spring of 2019 but did not go into effect until now.
However, critics of the plan say the $36K max does not come close to meeting long-term care needs. According to the website Paying for Senior Care, the average cost of paying for assisted living can range anywhere in WA from $3,800 to $6,750 per month.
Based upon the low-end rate, a person's maximum state WA Cares Fund benefit would be used up in about a year.
For those who did not opt out of paying the tax, it will be $.58 cents for every $100 earned. For a person making $40,000, they would pay about $232 annually, for someone making $50K, that number goes closer to $300.
Nearly a year ago, there were questions about the ability of the plan to meet its obligations or maintain solvency. It is believed with the $.58 per $100 tax it 'could' remain that way through 2098, that according to revised state figures. However, there could still be numerous adjustments.
Also, the 476,000 WA residents who opted out will likely face having to recertify sometime in the near future.
LOOK: 50 Famous brands that no longer exist