Magyar Egyház, 1981 (60. évfolyam, 1-12. szám)
1981-09-01 / 9-10. szám
MiWiimmuSl 13. oldal should be certain there is coverage. It’s a protection for your church, too, since a financially destitute pastor could become a financial burden to your church. Premiums for health coverage should be paid by the congregation. There’s an income tax benefit that way since health insurance premiums paid by an emloyer are not taxable income. Of course, all taxpayers who itemize their deductions on Schedule A are permitted to deduct one-half of any health insurance premiums they pay up to a maximum deduction of $150. Any excess can be included with other medical expenses and the total of all those costs, to the extent they exceed 3 % of adjusted gross income, are deductible if expenses are itemized. But your pastor may not have enough unreimbursed medical expenses to deduct anything. Then payment of the health insurance premium by the congregation means a full “deduction” of that amount. Of course, premiums paid by the congregation do not appear anywhere on your pastor’s tax return. They are not additional income. While social security does provide disability coverage, it will probably not be adequate, thus it should be supplemented by the minister’s own coverage. At any rate, that is a responsibility of your congregation, and the church should pay the premium. A disabled pastor could also become a financial burden to a caring congregation if family financial resources are inadequate. Group term life insurance premiums paid by the congregation are not taxable income up to $50,000 coverage. Any other life insurance premium paid by the congregation on a policy controlled by the pastor is taxable income. So your congregation can provide a tax benefit while at the same time guaranteeing some insurance protection for your pastor’s family by participating in a group life insurance plan. The congregation pays the premium. 3. Social security allowance. Your pastor pays taxes, both income and social security taxes. Some lay leaders don’t know that. Many members of congregations often believe that somehow or other their pastor is exempt from taxes. Not so. In fact, your pastor will pay 40% more social security tax than you as an employee will pay and get nothing more for it. That’s because clergy are required to pay the social security tax at the selfemployment tax rate while your congregation, as employer, pays nothing. Next year the cost goes up again for social security taxes, as it did this year. In 1982 the tax rate clergy pay will be 9.35%, up from 9.3% this year and 8.1% in 1980. Not only does the rate go up, the wage base also goes up to $32,700 from $29,700 this year and $25.900 in 1980. Thus, for clergy earning the maximum wage base, 1982’s social security tax will be $3057.45, up 27 % from 1981. Yet all clergy, even if salary stays level, will again pay more tax next year than this year or last year just because the rate has gone up. Concerned congregations have taken steps to help their pastors meet that cost by providing an allowance for the social security tax. The amount of the allowance could be equal to the maximum social security self-employment tax, or be the difference between what the pastor and other employees pay, or the congregation might pay whatever they would have paid as employer were they required to do so. Shifting the cost to the congregation is fair and equitable since all other employers must pay social security taxes on the wages paid to their employees. Your pastor will include that allowance as part of taxable income for both income and social security tax purposes. But any net allowance, even after taxes, will be a help in meeting that rising cost. There is no tax benefit to your pastor when you provide an allowance for social security taxes, but the additional income will boost pay. 5. Vacation, holidays and a day off. You really can’t expect your pastor to work seven days a week, 52 weeks a year. You don’t. Your pastor also needs some days off, specified days so they’ll be taken. Many clergy are so conscientious about their ministry, see so much that is not being done and needs doing, that they have a hard time taking time off. You should be certain time is taken. Insist on a 4 weeks vacation. The congregation won’t fall apart during that time with capable lay leaders like yourself to help with worship, and bulletins and cleaning and teaching. Pastors should get holidays, too, perhaps not on the day, but some other day then. And one day a week off should be specified in fairness to your pastor and to the pastor’s family. A clear understanding should be spelled out. If you don’t provide that time, your pastor will burn out and the work of the church really won’t get done then. 6. Continuing education. Your pastor needs to keep up with current trends in theology, counselling, evangelism, stewardship. Provide the opportunity to take advantage of the many programs available and you’ll benefit the church and the pastor, too. Provide the time, pay two weeks a year plus a three months sabbatical after six years, all plus annual one month vacation. Then be sure you pay the costs, too. Adequate time and money for helping your pastor to maintain and improve skills in ministry is very important to the vitality of your church. 7. An equity allowance. If your pastor must live in the church-owned parsonage, then you may want to consider an equity allowance. Such an allowance is additional compensation set aside in a special fund available to the pastor to provide for housing. Usually the fund is expected to be used as a down payment, the annual payment to the fund is typically equal to the increase in value of the parsonage or a certain percentage applied against salary. There is no tax benefit with an equity allowance, only an opportunity for the congregation to share with the pastor some of the equity of the parsonage. It can be a big help to a pastor in eventually providing housing when a parsonage is no longer available. 7. Other benefits. You’ve probably thought of other benefits too, that you’d like to provide. a) Key man life insurance is intended to protect the congregation against financial loss if the pastor should die in office. The policy beneficiary is the church and
