What do I tell a pastor who is considering opting out of the social security system?

“I certify that I am conscientiously opposed to, or because of my religious principles I am opposed to, the acceptance (for services I perform as a minister, member of a religious order not under a vow of poverty, or a Christian Science practitioner) of any public insurance that makes payments in the even of death, disability, old age, or retirement; or that makes payments toward the cost of, or provides services for, medical care. I declare that I have examined this application and to the best of my knowledge and belief it is true and correct.” Many ministers read that paragraph on IRS Form 4361 when they apply to “opt out” of the Social Security system—and pause—some for longer periods of time than others. Let’s face it, for most pastors this option presents the proverbial “horns of a dilemma.” Many ministers ask themselves, “Am I really opposed to all government assistance or just government insurance?” The tension between staying in the Social Security system or checking out often boils down to a personal debate over the merits and the soundness of the Social Security system versus one’s own opposition to receiving financial help from the government. It should be added, however, that for some ministers this is an easy decision on moral grounds. They are simply against accepting assistance from “Caesar”. The secular government in their thinking is not a part of God’s plan for His servants. God, they believe, through the local church, will provide for all their needs, including a retirement plan. This would mean of course that based on their personal beliefs they would be opposed to FEMA disaster assistance, Medicare, SBA loans, Pell Grants for their children’s education and welfare assistance for their needy church members. Are they opposed for matters of conscience to accepting all government assistance? If opposition to federal assistance is universal and across the board, what does a minister do, then, with the matter of accepting Social Security coverage as a result of secular employment either before or after he or she entered the ministry? How can a minister on moral grounds accept Social Security and Medicare benefits based on benefits derived from non-ministerial income and yet refuse to pay Social Security taxes on ministerial income? Unfortunately, this is a very common practice. Granted, their Social Security benefits are probably reduced somewhat. However, as a result of broad ranges in the Social Security plan for earnings levels, it is possible for many bi-vocational ministers to opt out of Social Security as a minister, pay Social Security on non-ministerial income and have very little reduction in Social Security benefits. This from a moral standpoint would be the same as having you cake and eating it, too! Then there are those who, although opposed to government programs, look at this issue pragmatically. First they believe the Social Security system will bankrupt in ten years—which is possible. Furthermore, the 10.3 percent paid on Schedule SE each year could be extra cash in their pockets. Finally, the money paid each year could be placed in a high-quality investment portfolio and possibly produce a better retirement nest egg. While the economics of “opting out” may seem attractive, that isn’t the issue. Once again it is a matter of conscience. AUTHOR: David Pollock, MBA. Resource Ministries, Inc. Winnetka, CA

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