1998#20

[victorandjenny]

I am totally confused by this quesiton, which appears in TIA manual Chapter 6 page 17.

What is this law amendment about? Is it about tax, or about benefit to insured?
What is reimbursement about? Is it benefit?

Thanks.

[victorandjenny]

The orginal question:

Which of the following statements are true of a law amendment that changes the payments base from gross earning to net earning?
1. Within any tax rate band, if the minimum or maximum limitation affects all insureds, before and after the change, there is no direct effect.
2. Within any tax rate band, the effect of the change is uniform across wage rates if the maxi and mini limitations do not affect the reimbursement, either before or after the change.
3. The direct effect can be quantified using a wage distribution table and an income tax schedule.

The answer is that all these 3 statements are right.


What is this law amendment about? Is it about salary, or tax, or about benefit to insured?

What is reimbursement about? Is it benefit?

Thanks.

[Vorian Atreides]

It's about material covered on a previous syllabus and doesn't exactly have the same relevance as the current syllabus material. I don't recall any discussion on tax implications for changes in Workers' Comp benefits in W&M, which is the general gist of the Exam question presented.

Seriously doubt you'd see any sort of question like this one on the Exam. I would focus on mastering other parts of the syllabus and revisit this afterward.

[victorandjenny]

hoho...This explain why I have no clue what this quesiton is talking about.

Originally Posted by Vorian Atreides

It's about material covered on a previous syllabus and doesn't exactly have the same relevance as the current syllabus material. I don't recall any discussion on tax implications for changes in Workers' Comp benefits in W&M, which is the general gist of the Exam question presented.

Seriously doubt you'd see any sort of question like this one on the Exam. I would focus on mastering other parts of the syllabus and revisit this afterward.

[Vorian Atreides]

You're far more likely to see things like that with older questions. If you see a question that leaves you scratching your head about WTH does this mean . . . look at the year. If it's 2007 or more recent, you might look at trying to figure it out. If it's older than that, I'd just skip it and not worry about it until I get bored of studying the other things on the syllabus.