Ministers and Social Security Exemption

What is the wisdom out there? A letter from a reader:

I was recently asked by one of my students, who has just taken a ministry position, whether she should petition for exemption. The form one has to sign for the IRS says:

“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 religious order not under a vow of poverty, or a Christian Science practitioner) of any public insurance that makes payments…”

I know several who have opted out to keep more of their money, not on specifically religious grounds, beyond a claim that God commands then to care for their family, and they need the money for that.

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What Are Your Thoughts?leave a comment
  • Jeremy

    My dad is a long-time and fairly successful pastor (800 member church) approaching retirement and he contends that it’s the dumbest thing he ever did in his life. He’s taken huge hits to to his already unlucrative pay every time the economy tanks (he will do that before reducing worker salary or laying anyone off) and what little he’s managed to squirrel away for retirement is in very poor condition. SS, while inconvenient, isn’t all that costly in the long-run and the stable check is a great safety net.

  • PJ Anderson

    I exempted myself from Social Security following my ordination.

    I did this because I am religiously opposed to such things as Social Security and other public insurance. This wasn’t a financial decision for me. However, I do take 15% of my income and invest it in retirement account every year. Being outside of Social Security isn’t a terrible thing, granted I don’t think its going to be around anyways.

    To be honest, I don’t openly talk about this in public and I don’t talk about this to my peers. When I made the decision to exempt myself one of my colleagues at the church we were serving proceeded to demean me and call my a hypocrite over this issue both in public and in private meetings. Also, the issues are rather complex and require more nuance than most conversations permit. Social Security is a terrible system, an almost Ponzi scheme, that is against my personal religious convictions. As a result, I don’t take any public insurance assistance of any kind. This include unemployment.

    My position is truly one of personal religious conviction. I believe government is, at its best, a necessary evil. Thus smaller governments make better countries. (Clearly this isn’t a sentiment share around here.) I am respectful of the government and leaders. So given the opportunity, I happily removed myself from the public welfare insurance system when I was given the chance.

  • My opinion is that if you are doing it as a financial decision then you should not. The exemption was designed for people like PJ Anderson that have a religious objection. Really it was designed for catholic orders that pledged to care for their elderly on their own as part of their spiritual devotion to God.

    Claiming the exemption for another reason than religious objections (political objection does not count) is a violation of the intent of the excemption.

  • Damien

    It might be the European in me talking, but I’m actually surprised that there is such an exemption available. Are there really religious principles at stake here? I don’t see how something like social security might be contrary to one’s religious principles, unless of course one is opposed to taxation and government spending per so. Because, at the end of the day, this is all that social security is. Current workers are taxed in order to pay for the social security checks of previous workers. It’s not much different from, say, using the income tax to pay for the Defense Department. The fact that, at the moment, Social Security is funded by a payroll tax and that there might be a shortfall in the future is irrelevant. When that happens, all that Congress has to do is broaden the base for Social Security and transfer money from the general fund to Social Security, and/or raise rates. If we said the DoD could only be funded through a sales tax on guns and ammunition, and noticed a huge budget shortfall, that wouldn’t be an argument for abolishing the DoD or that national defense is by nature unsustainable.

  • Damien

    Also, I might be mistaken, but don’t you actually have to belong to particular religious groups such as the Old Order Amish to claim that exemption? Can, say, a Baptist minister claim it even though the other pastors of his church don’t?

  • Mike

    Long, long ago I was in a meeting for ministry majors at our Christian college where we were told to take the exemption for financial reasons but to be sure not to tell them it’s for financial reasons (because that is against the law). Ironic, no?

    I, and most of my friends, decided to stay in SS. We would not have been able to sign the statement honestly.

  • I have not opted out of SSC for two reasons… First, the parishioners I serve cannot so why should I be exempt from giving a portion of Ceasar’s money back to Ceasar when they are not. Second, whether SSC is around when I retire or not, I see my contribution as a *small* way of helping provide for those who now live on SSC.

    Those are my reasons but I don’t judge those clergy who do opt out of SSC.

    Grace and Peace,


  • CGC

    Hi Everyone,
    Just something to think about. Historically, about half of ministers exempt out of Social Security. One originally did not have to sign a paper to get of of it but since the government wanted to stop so many ministers from simply exempting out, they added the waiver where you have to be like a conscious objector to get out of it now. Something to note, politicians are the only other group I am aware of that can exempt out of Social Securty and 100 percent of them do to my knowledge.

  • Everyone should have the option to exempt themselves from Social Security, not just ministers. I do so on moral belief, and there are many that also have moral objection without the proper means to exempt themselves. The Founders would not recognize this nation as the one they constructed under Divine wisdom.

  • Ryan

    I also have a hard time seeing this as a *religious* issue for Christians. I often worry that Christians conflate their political views into being tied to their faith. There are many times they might intersect, but I do not see social security as one of these. While this maybe a political issue for many Christians, I do not see how this is a *religious* issue for Christians.

    We may think social security is severely flawed, we may think it is not the right solution (or not a solution at all!), we may think this so strongly that we say it is corrupt, but those are political views. I am not at all a fan of Social Security, but that is based on my understanding of economics and views of politics, it is not a matter of Christian conscience.

  • George Davis


    While I think Social Security is deeply flawed, I have not opted out because my reasons for doing so were not specifically religious.

  • Rick in IL

    I don’t really expect the system to survive throughout my retirement years, so I wish I had opted out, but a) I actually don’t have an “objection of conscience”, and b) when I was in seminary, the denomination’s Director of Ministry expressly said “We don’t recommend that you opt out, because our denominational position does not contain an objection of conscience, and if you were challenged, we would not back you”. Maybe I was naive, but I took this as sincere and authentic, not simply a case of him “covering his bases” with a wink and a nod.

  • Matt Edwards

    If you would preach a sermon saying that the people in your congregation who collect social security or welfare are living in sin, then you are a conscientious objector and you can opt out of social security with integrity.

  • The exemption was put into place (by my understanding) not because of objections to Social Security, but objections to people that worked to serve the church being dependent upon the government for their care.

    This is why Catholics can opt out with out concern because they are dependent upon the church. But it would be a rare baptist that was sure that their care would be provided by their church into their retirement and old age needs.

    The exemption is a good example of people turning a rule on its head for their own benefit.

  • Teachers are exempt as are most government workers, not just politicians. For teachers, it is particularly problematic, as those who worked elsewhere before becoming teachers generally lose their social security benefits when they begin teaching.

  • Terrell

    Are you aware of the following so-far-unmentioned-detail? You cannot ever be on Medicare (that’s logical since you didn’t pay into it). Furthermore, you will have to replace the benefits you would’ve received from Medicare by providing your own health insurance, which I understand would cost you between $30k – $40k in today’s money. The average person might become “uninsurable” due to the cost of insurance. However, if you pay into SS for 40 quarters through another occupation you can draw benefits that way and may even be eligible to receive some benefits through your spouse. I’ve known of a few ministers who were opposed to paying SS untile they learned these few details It’s a complicated issue and requires serious reflection before making a permanent decision. (I checked with my tax expert before posting these details.)

  • Jason

    I would hope those with the conviction to opt out of SS – would likewise refuse the housing benefit then granted to them thus reducing their taxable income. Not sure how you can opt out here for religious reasons then accept the benefits on the other side while refusing to support it on the other.

  • CGC

    Hi Everyone,
    One surprising thing about medicare is when your spouse gets it, you get it, despite whether you have paid in Medicare or not. Look it up!

  • Mike

    I let an insurance salesman talk me into taking the exemption. I was only 22 at the time and just starting in church work. His explanation sounded rational to me. I now realize (too late) that I was wrong in taking this action. I have eight years before the possibility of retirement and even though I have faithful put in more than 10 percent per year into retirement it will not be enough. I think before one takes this action they should talk with older and wiser people and not rush into it.

  • Deets

    I asked around prior to my licensure, and almost every pastor I spoke to had opted out of SS. I found two reasons, (1) financial–they got to keep more money, and (2) political–they didn’t like the government being involved in such social programs. I couldn’t find one who could give a solid theological reason. So, based on the lack of religious rational plus the financial counselor of several accountants, I have paid into SS throughout my ministry. I still think I would have compromised myself to have signed the petition.

  • Derek

    I don’t know if its true but I was told by my UMC Conference treasurer at a new pastors financial planning meeting that the IRS would have questions if I claimed the exception. The stated reason was because a very high percentage of UMC pastors don’t claim it. Hard to make a theological / doctrinal claim if most of your fellow colleagues don’t. At least before the IRS!

  • Dave T.

    Either you have faith that the church will provide for your future or you don’t. I couldn’t in good conscience keep a “public” insurance when I felt like I was risking so much already by entering into the ministry. For me, I needed to get rid of the safety net under the trapeze to see how much I trusted the calling God gave me and my belief that God would provide for me my whole life.

  • Patrick


    SS has no investment growth potential, it cannot be bequeathed to anyone (including your church, family or favorite charity) so it isn’t “yours” ,it’s the state’s who we hope is benevolent enough to fork out someday and if you die before 62, it added up to 0 after all those payments to you. With spouse and minors surviving, they’d get some back temporarily, plus ~$150 to bury you.

    How can you have saved the 10% all these years and NOT be better off than that??

    Theological reasons? I am no preacher, but, I have one.

    I do not believe God endorses the use of coercion Caesar needs to keep programs like this alive. That’s not how God operates, it’s how the world operates. Forcing others including employers to pay for some of my future welfare against their wishes?

    God isn’t in that.

  • In my remembrance of one session of a pastoral ministry class, the reason for the exemption on religious grounds has to do with trusting that God will take care of you as a minister. Some people saw putting money in a government program to meet their retirement needs as incompatible with faith, because of the verse about a worker being worthy of their wages. don’t seem much of a conflict though.

  • I’m not a minister, but given the option I would in good conscience opt out of SS on religious grounds of it being bad stewardship. The average rate on SS from 1940 to 2012 does not meet the average market return of the stock market. If a person put $1000 into SS in 1940, the lump sum would be worth $43K in 2012 (of course the person doesn’t get the lump sum, they get a monthly income loosely based on actuary tables of that $43K). But if that same person put $1000 into a mutual fund in 1940 that matched the performance of Dow Jones, it would be worth $87K in 2012. Twice as much! And although the Dow has year to year risks, it has little long term risk. The Dow has never gone down over any 10 year period (including the period of the Great Depression). Since retirement savings is long term, in my view mutual funds are less of a risk than SS, which is unfunded at this point.

    Plus with a private retirement account, one has direct management of one’s assets and can pass money on to their heirs if they desire. So if I died at age 67 in the example above, my heirs would get an $87,000 inheritance instead of nothing.

    Having said all that, opting out of SS is the best ONLY if one is disciplined enough to replace it with what is better (personal retirement savings, private life insurance, and private long term disability insurance).

  • DFlanders

    An interesting fact is that prior to 1955 clergy were automatically exempt from social security. Participation was not an option. In 1955 ministers were then allowed to opt into SS until 1968 when the law changed and ministers were automatically enrolled, but were allowed an exemption as a conscientious objector. I think this speaks very strongly of the movement in our nation away from religious freedom and a weakening of the wall of separation of church and state. It used to be assumed that ministers and clergy would not want to depend upon a government program because they depended on their church for their livelihood and that those funds did not belong to the government. I just find it an interesting discussion. Over the decades the dialogue changed from “pastors can’t be part of SS” to “only someone with a compelling stated religious reason can opt out.”

  • KarenA

    My husband opted out because he was told to while at Bible College in the 70’s. Worst decision ever!

  • Johnny Melton

    The waiver is based on being conscientiously opposed to receiving, not paying, “public insurance payments.” It is not sufficient to be opposed to the social security system per se (for either political or financial reasons, or even based on poor stewardship). One must have a conscientious objection to receiving the payments, even if one were entitled to them. Some religious communities (e.g. The Amish) do not believe in the principle of insurance, and as such refuse to accept it even when entitled to it. Basically, the government is saying “If you would not accept Social Security payments even if you were forced to pay into the system, then we will not force you to pay into the system.” In my experience, few people today have religious scruples against “receiving” such support, which means that for most of us, opting out is not an option.