The January 19 issue of Christianity Todaycarried a news item starting that beginning this year the law requires all ordained ministers to participate in the Social Security program as self-employed persons. Heretofore participation was optional; and, as far as I know, most of our ministers have not participated.
However, because this bit of news has, to my knowledge and that of some of my colleagues, not been given much publicity, and may have escaped the notice of many, I thought it well to call attention to it in this brief editorial.
Briefly, according to the item cited, here are the details:
1) Participation becomes mandatory this year.
2) Ministers who file an estimated income tax for 1968 should include with. it the estimated Social Security Tax.
3) The rate for 1968 will be 6.4 per cent of taxable incomes up to $7,800. This means, for example, that a minister who receives a salary of $5000 will be required to pay $320 Social Security Tax.
If the report carried by Christianity Today is accurate, that the President signed this into law on January 2, it seems to me that our consistories and congregations will want to reappraise the salary situation of their ministers; and subsidized congregations may want to do this promptly, in order to revise their subsidy requests in time for the next Synod. For the practical effect of a tax like this is simply an automatic cut in salary of no small proportions. Merely to maintain a $5000 salary-level would require more than a $320 increase in salary since the $320 increase would also, in turn, be subject to the 6.4 per cent tax. A couple of suggestions, I think, are not out of order here:
1) Consistories can consider a simple salary increase.
2) Consistories can consider adopting a policy of paying this tax for the minister, either wholly or in part. Under the law, a minister is classified as a self-employed person, and therefore is himself responsible for his entire Social Security Tax. There is nothing, however, to prevent the consistory from paying this tax, or from dividing payment as is done by law, for example, in the case of a factory worker.
3) Consistories will to well to cast about forlegitimate ways of increasing their support of their ministers without increasing their taxable income. For example, if the consistory assumes responsibility for paying the heating and utilities costs of the parsonage, this results in no little increase in the support of the minister without an increase in his taxable income. This would be a perfectly legitimate measure; and it would be more prudent than a straight increase in salary.
But one thing, it seems to me, is obvious. This new tax measure will strike hard at ministers already in the lower salary bracket especially; and some measures will have to be taken.
The other side of the picture is, of course, that the retirement benefits of Social Security will eventually ease the strain on the denomination’s Emeritus Fund. According to the news item cited, the largest monthly check for a surviving family will be $434.40, and the benefits for an individual will range from a minimum of $55 to a maximum of $160.50. This is premised, of course, on the solvency of the Social Security Fund; and there are many who seem to have doubts about that solvency nowadays.
But, for your information and guidance, this is the picture.