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Rhode Island Temporary Disability Insurance

January 25th, 2007 Posted by Amelia

Here’s good news for Rhode Island employees. One of the deductions from your paycheck should go down this month.

Rhode Island is one of the few states that have a mandated temporary disability insurance program for workers. It’s funded entirely by mandatory employee contributions, which are slated to go down by a whopping $12 million in 2007. The employee contribution rate for temporary disability insurance (TDI) will be lowered to 1.3 percent this year. This change is the result of a larger reserve in the TDI fund. The TDI fund had a balance of $99.9 million as of September 30, 2006, almost $8 million more than the previous year.

“The increase in reserves in both funds can be attributed, in part, to higher tax receipts due to an expanding economy. In addition, UI benefit payments declined by $6.8 million this year while TDI benefit payments remained stable over the year,” said Raymond Filippone, Assistant Director for Income Support.

This change will mean lower payroll deductions for all employees covered by the TDI program in 2007. Most workers, those earning less than the taxable wage base, will pay 7.1 percent less for their TDI coverage in 2007. The Temporary Disability Insurance (TDI) taxable wage base will be $52,100 in 2007, up $1,500 from the 2006 base of $50,600. Those earning more than the taxable wage base will see a reduction of 4.4% in their TDI contributions. The maximum TDI contribution will be $677.30 this year, a reduction of $31.10 from the maximum contribution of $708.40 in 2006.

The Rhode Island temporary disability insurance program is administered by the state Division of Labor & Training (DLT). The DLT is dedicated to the growth and competitiveness of Rhode Island industry. They administer a variety of training grants, tax credits, and apprenticeship programs to help employers. The DLT makes economic indicators and labor market information is available for long-range planning. The Agency also engages in active outreach, helping large and small employers retain their best workers or retrain their existing work force.