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Changes lawmakers are hoping to make to Washington's long term care tax

The WA Cares Fund will begin collecting taxes in January 2022. Lawmakers are racing to pass certain "common sense fixes" during the 2022 legislative session.

OLYMPIA, Wash. — Washington lawmakers are racing to make changes to the Washington Cares Fund, a first-of-its-kind long-term care tax set to take effect in the new year.

Washington State Senate Democratic leadership recently sent Gov. Jay Inslee a letter asking him to delay the implementation of Washington's long-term care tax until January 2023 to give lawmakers an opportunity to make changes before it takes effect.

Workers will begin paying 0.58 percent of every $100 earned into the fund beginning January 2022. However, lawmakers are hoping to make several "common-sense fixes" to the tax during the next legislative session. 

The tax guarantees a $36,500 lifetime benefit to all Washington residents who have paid into the fund for at least ten years. The money can be used to pay for long-term care needs, like in-home care, nursing home care, hearing aids, trained support for caregivers, home-delivered meals, memory care, necessary home renovations and several other services once people become eligible. 

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At a press conference Wednesday, Inslee said he does not have the authority to unilaterally postpone the long-term care tax, but he was "sensitive and empathetic to the need for changes in this bill." 

Inslee said he is working with legislators on other approaches that could allow them to change the law before the tax goes into effect, including a possible special session or a mechanism that could pause the collection of the tax until April 2022. 

Changes to the Washington Cares Fund

Lawmakers are hoping to implement changes to the law to address concerns over who pays into the tax, who gets to benefit from the tax and what residents can do with the money once they are eligible. 

Lawmakers also expressed interest in giving constituents more time to opt-out of the tax, per the letter sent to Inslee's office. The deadline to opt-out of the fund passed on Nov. 1, 2021, by which time residents needed to submit proof of a private long-term-care insurance policy to the employment security department. 

Should a high number of people apply for exemptions, legislators would also need to analyze whether the program can be successful long-term. 

"If long-term solvency is in doubt, we must be able to examine all options for modifying the program to ensure viability into the future. If employees in Washington are already being assessed the premium it could complicate and limit potential solutions," the letter reads. 

RELATED: Your paycheck will be smaller in January due to the Washington Cares Fund

Whether Washington residents who have paid into the program will be able to take their benefits with them is another issue lawmakers are hoping to address.

In the law's current form, should a Washington resident move to a different state after paying into the program for the required ten years, they would not be able to use those benefits. Members of the legislative Long Term Services and Supports Trust Commission previously said they were looking into the possibility of allowing residents to take the funds to a different state. 

Out-of-state residents and foreign workers who are employed in the state also must pay into the tax, although they would not be eligible for the benefit, alongside employees who begin paying into the fund but retire before they contribute for the ten-year obligation.

Lawmakers said they expect one of the primary issues of the 2022 legislative session will be the long-term cares fund, and Senate Democratic Leadership "continue[s] to support the goals of the WA Cares Fund, but we also recognize that changes to the program are needed." 

"In order for the Legislature to have time to listen to the public, examine all the necessary data, and engage in a robust debate of what modifications must be made, we believe that the program must be delayed until January 1, 2023."

RELATED: Class action lawsuit filed against Washington's new long-term care tax

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