Crunch Time

Federal employees worried about a potential pay freeze could be in for another hit come Jan. 1, 2011. The monthly public transportation benefits available to feds will be cut in half unless Congress acts during the lame-duck session to extend a provision in the 2009 American Recovery and Reinvestment Act.

Before the economic stimulus package, both public and private sector workers were limited to $120 a month in transit benefits, which came from either pretax employee contributions or as reimbursement from employers. The Recovery Act raised the benefits ceiling to $230 via a provision that expires on Dec. 31, and without congressional action the maximum amount will revert to $120. Sen. Charles Schumer, D-N.Y., and Rep. Jim McGovern, D-Mass., have introduced legislation to extend the provision, but both bills have stalled.

Advocates for the program say transit benefits are a valuable recruitment and retention tool and caution that the reduction could cause economic hardship for many employees. Each federal agency determines how much employees receive and how those benefits are distributed. Of the 285,000 Washington-area users registered for Metro's SmartBenefits program, about 170,000 are federal workers. Riders could lose up to $1,300 annually if the program is not extended, according to Metro.

The benefit applies to feds nationwide and to various types of transportation, including buses and van pools. Parking benefits will remain at $230 a month, though under new Internal Revenue Service rules, users after Dec. 31 will no longer be able to use their transit and parking funds interchangeably.

Back Pay

Military personnel and veterans whose service in Iraq or Afghanistan was extended under stop-loss provisions once again will have extra time to apply for bonus compensation earned.

The Defense Department on Monday announced that service members have an additional two weeks to submit claims for retroactive stop-loss special pay, a benefit of $500 for each full or partial month served under stop-loss between Sept. 11, 2001, and Sept. 30, 2009. The program was designed to compensate military members who involuntarily served extended time. The original deadline was Oct. 21, but the continuing resolutions Congress passed in recent weeks extended the application period to Dec. 3 and then to Dec. 18.

Defense estimates nearly that 145,000 service members, veterans and beneficiaries are eligible to claim payments, but less than half of the $534.4 million allocated to the program has been distributed. The average benefit is $3,700.