The description of a bill passed by the House Ways and Means Committee:
The Clergy Act
Introduced by former Speaker Kevin McCarthy (CA-20) and Representative Mike Thompson (CA-04), H.R. 6068 creates a window for clergy members to opt back into contributing to and receiving Social Security.
- Creates a time-limited, voluntary open season for members of the clergy to revoke their Social Security exemption and opt into Social Security coverage.
- Under current law, members of the clergy may apply for an exemption from paying certain taxes on income associated with the performance of ministerial services. The exemption also applies to receiving future benefits. Once the exemption is made, it currently cannot be reversed. Roughly 2,000 members of the clergy receive an exemption every year.
If this advances, and I wouldn't bet on even such innocuous legislation advancing, it may attract amendments which would make it more interesting but which could also cause it to fail.
I am amazed at how well the religious community has found ways to manipulate the system for benefits. Communities of Nuns/Sisters write off resources and income in the hundreds of thousands of dollars to get LIS, Medicaid, and more. Yet a poor family will lose a family home to pay for LTC. Such a deal.
ReplyDeleteDont believe me
POMS
HI 03020.040
@1010am. Many nuns take vows of poverty and are paid a small stipend. Many work well beyond retirement age. They devote their entire life to service. One in our area retired at age 90. She worked the last several years for a very small stipend, serving the poor and dying. She taught for 50 years at a very low wage and then worked another 30 doing other service for a stipend. SSA benefit under $500 per month before Medicare.
DeleteDon’t forget that Minister pensions are also exempt from WEP. Plenty of exceptions for religious folks who don’t want to play the system the best they can.
ReplyDeleteIt seems like this has the potential for giving a windfall to certain clergy members.
ReplyDeleteA twenty year old minister, not making much, decides to get more take home by taking this exemption. So now, 20 years later and in his peak earning years, he revolks the exemption and starts contributing.
The minister had 2o years tax free and his retirement benefits will be based on 27 years of peak earnings. Would this be the case or am I missing something about the PIA calculation?
2:38 but what is her Order worth? Who and what paid for her housing food medical dental and vision? All of that counts against a lot of older people, wives who took care of kids and a husband and get a partial payout because she didn't work. Guess what, the state will take her house to pay for her long term care while the nun gets it for free and her order doesn't even pay a dime. Some orders even run their own Medicaid approved LTC and collect the money.
ReplyDeletefair system for sure!
The law provides many exemptions and benefits to religious groups and individuals in the name of religion. Think about property tax exemptions for property used for religious purposes and specific exemptions like these and others such as the home allowance exclusion. We can and should consider whether any of these exemptions are good public policy. I happen to think they're not, but this tiny change that only seems to allow someone to revoke an exemption they once claimed doesn't bother me at all.
ReplyDeleteAnd to 3:57, 35 years of earnings not 27.