Two bills filed by Democratic state lawmakers Tuesday seek to make a number of changes to the state’s new long-term care assistance, which will be funded by a payroll tax on millions of Washington workers.
One bill — originally sponsored by House Majority Leader Pat Sullivan (D-Covington) — would delay collection of the payroll tax until July 1, 2023.
That tax, 0.58% of a worker’s total wages, went into effect on Jan. 1. Under the law, employers must deduct the tax from their employees’ earnings and then remit it to the state.
After a group of Democratic leaders in the state Senate urged Gov. Jay Inslee to delay collection of the tax before the new year, Inslee ordered the state’s Employment Security Department to not collect that tax from employers. Inslee said he did not have the authority to prevent employers from collecting the tax from their employees; only the state Legislature has the authority to do that, he said.
already though the state’s Employment Security Department has been ordered not to collect the tax, employers are required under the law to take the tax from their employees. Another provision in Rep. Sullivan’s bill would require the state to refund any premiums that were taken from workers between Jan. 1 and the date in which the bill goes into effect.
The long-term care assistance — known as the WA Cares Fund — was passed by the Legislature in 2019. It essentially serves as state-provided long-term care insurance. Beginning in 2025, eligible adults can begin claiming up to $36,500 to pay for long-term care costs, such as delivered meals and in-home care.
But a number of problems with the program were highlighted in the months leading up to the time when the state would begin collecting the payroll tax. The main criticism is that many will be forced to pay into the program but will never see any benefits.
That includes approximately 150,000 people who work in Washington but live in other places, such as Idaho or Oregon.
It also includes older adults who plan to retire soon — you have to pay into the program for at the minimum three consecutive years to receive benefits — along with those who move or retire in a different state, and military members rotating in and out of Washington.
The second bill — filed by Rep. Dave Paul (D-Oak shelter) — would cure some of those problems.
It would allow the following people to opt out of the payroll tax: those living in another state, spouses or partners of active military members, and permanent workers with nonimmigrant visas.
The two bills were pre-filed Tuesday, meaning they’ll be able to receive hearings as soon as the Legislature is in session. Lawmakers will convene for the 2022 legislative session on Jan. 10.
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