Bethelites get about $100/month in cash, travel money, and clothing allowance. This is the IRS tax law that applies.
http://policy.ssa.gov/poms.nsf/lnx/0301901640
RS 01901.640 Coverage for Members of Religious Orders Who Take a Vow of Poverty
Citations:
Regulation No.4, Sec. 404.1024.
A. POLICY
1. IRS and SSA Responsibility
IRS is responsible for the detailed provisions of filing the SS-16, Certificate of Election, under section 3121 of the Internal Revenue Code (IRC).
Because IRS processes the Certificate of Election, SSA personnel should be as helpful as possible to representatives of the order but must not make commitments on behalf of IRS.
2. Wages and Taxes
When the SS-16 is filed, the order obligates itself to:
report as wages the fair market value of any food, lodging, clothing, and any other perquisite furnished to the member (The reported amount must not be less than $100 a month); and
pay both the employer and employee share of Social Security taxes to IRS.
3. Effective Date
The order may make the effective date of the Certificate of Election the first day of:
the calendar quarter in which the certificate is filed;
the quarter after the quarter in which the certificate is filed; or
any one of 20 quarters before the quarter in which the certificate is filed.
4. Applications and Benefit Payments
In many orders, members expect the treasurer to handle all financial matters including Social Security. Therefore, the treasurer may request a supply of application forms from the FO. The FO may supply a reasonable quantity of Form SSA-1.
5. Covered Members
For the purpose of coverage under a Certificate of Election, the members in the order must be divided into active and inactive members. IRS uses the term ?retired?. The election covers:
all current and future active members.
members who are inactive when the election is filed but are active during the retroactive period, if any.
B. DEFINITIONS
1. Religious Order
A religious order is a community of people living under a distinctive rule, discipline, or constitution as a monastic brotherhood or society.
Most orders or communities require a vow of chastity, obedience, and poverty, in addition to any special vows required by specific communities.
2. Member
For coverage purposes, under a Certificate of Election, a member of a religious order means any individual who:
- is subject to a vow of poverty as a member of the order;
- performs tasks usually required of an active member of the order; and
- is not considered inactive (retired) by the order because of old age or disability.
A member of an order is often referred to as ?a religious.?
The term ?the religious? is used collectively to refer to persons who are members of a religious order.
3. Autonomous Subdivision
For coverage purposes, an autonomous subdivision is the entity:
- in which the member has a vested right of franchise, i.e., the right to elect the superior who will govern him;
- that directs and governs the member; and
- that is responsible for the member's care and maintenance. The subdivision is often called a ?province.?
4. Inactive ? Retirement Program
A member is considered inactive because of old age if the order has:
- an established retirement program in which all members are retired at age 70 or are retired when they become incapacitated by advanced age; and
- the member meets the requirements of the retirement program.
5. Inactive - No Retirement Program
A member of an order that does not have a retirement plan is considered inactive because of old age if it is reasonable to do so considering the services performed by the individual and the given circumstances.
To determine this consider the following:
- The nature of services required by the order and performed by the individual. The more skilled and valuable the services, the more likely the individual is still active.
- The amount of time the individual devotes to the performance of services required by the order.
- Normally, an individual limited by reason of advanced age is considered inactive if services are less than 45 hours a month.
- An individual whose services are less than 15 hours a month is always considered inactive.
- Comparison of the nature and extent of services performed before and after retirement. A large reduction in the importance and amount of services required by the order tends to indicate the individual is inactive.
Note: Usually an individual who reduces the amount of services performed by at least 75% is considered inactive.
6. Inactive - Totally Disabled
A member is inactive due to total disability when:
- the member is unable to perform the tasks required by the order of an active member by reason of a physical or mental impairment; and
- the impairment is reasonably expected to prevent resumption of such tasks.
Usually, medical evidence is required to establish the inactive status.
C. PROCEDURE
Questions of whether a member is inactive usually arise when a claim for benefits is filed shortly after an order elects coverage.
Members may appear to have become inactive just after acquiring insured status. This may be attributed to coincidence or a misunderstanding.
At the discretion of its management, the FO may use the following guidelines to determine if the inactive status is a coincidence or may develop each claim:
If the Community Membership is: | And no more than |
25 or less | 2 members become inactive in the retroactive period |
between 25 and 100 | 3 members become inactive in the retroactive period |
100 or more members | 5 members become inactive in the retroactive period |
D. POLICY ? MEMBERS WORKING FOR A THIRD PARTY
1. General Coverage Provisions
Members of a religious order who work outside the order for an organization not affiliated with the order or its supervising church are employees of the third party.
A member engaged in such work is not performing duties required by the order.
Social Security Ruling 81-38 holds that such services performed in a secular setting are not excluded from the definition of employment under section 210(a)(8)(A) of the Act.
2. Coverage Status
A member is considered an agent of the order when the member is directed by the order to perform services for another agency of the supervising church or an associated institution.
These services are performed in the exercise of duties required by the order.
A member is not considered an agent of the order when the member performs services with a third party not affiliated with the order or the supervising church. The member is an employee of the third party even when under a vow of poverty and the order requires the member to perform services for the third party.
Earnings are considered wages even though they may be given to the order.