Laid-off religious workers denied jobless benefits

Beware pastors and staff of churches: If you get laid off, the chances are you will NOT receive unemployment.

God may provide, but the state may not when it comes to unemployment benefits for employees laid off by churches, synagogues and other religious groups.

Carol Bronson discovered that a few months ago after she lost her secretarial job at Temple Emanuel synagogue in Virginia Beach. Bronson assumed she could draw unemployment benefits, but when she filed a claim, she was denied.

It was a hard way to learn that under Virginia law, as in many states, tax exemptions for religious organizations include freedom from paying unemployment taxes, though the IRS requires they pay Social Security and withholding taxes.

“I had no idea that there would not be any benefits for me after leaving my job,” said Bronson, who worked at the synagogue for two years.

I discovered this about 10 years ago when a church let me go because of financial struggles they were facing, and when I went to collect unemployment I found out there was none for me. Churches are not required to pay into unemployment (although they can if they so choose) so pastors and staff in most churches are not covered. The kicker is most of them do not realize this because they are never told.

Churches choose to save money by not paying into unemployment and I think that’s really lame. This is just a warning to any and all pastors and church staff out there. The church may be your “family” but when it comes to money… it’s all business.

5 thoughts on “Laid-off religious workers denied jobless benefits”

  1. Not necessarily true.

    I am not a tax person, but I do know from my experience (and from brief research on the internet) that ordained pastors are granted dual-status tax-wise. You can therefore pretty much file whatever way best benefits you. You do not have to be considered “self-employed”.

    In my situation at my last church, I opted to be considered an employee (I filled out a w-2) and this allowed me to be part of the church health care plan. The way my compensation worked was that my housing allowance was deducted off the top. (FYI – housing allowance is considered pretty much ANYTHING having to do with your house. You can clam housing allowance on your mortgage, furniture, gardening tools, etc). Then the remaining amount was taxed at a rate that covered my Federal Tax and any Social Security/Medicare taxes I would need to pay on my salary.

    If I recall, this worked out best for me and eliminated me having to pay quarterly taxes as a self-employed individual. Over the years in ministry I did it both ways, taking full advantage of the dual-status.

    Man, I miss housing allowance. Damn that was a beautiful thing. Right off the top, with my current house, that would be about 30 grand a year of tax free income.

    I might go back into ministry.

  2. Keep in mind that the IRS considers Pastors to be self employed, which disqualifies us for unemployment benefits anyhow.

  3. <>“The church may be your “family” but when it comes to money… it’s all business”<>Yet the example quoted is of a synagogue. So I guess it’s StupidReligiousInstitutionPeople?

  4. With most american churches, especially the “mega” churches, it is ALL business my friend. I worked at one for 3 months and, aside from the morning bible study and prayer session, it functioned just like your run of the mill corporation. Cost cutting, political intrigue, and corporate BS abounded….

  5. <>“aside from the morning bible study and prayer session”<>What, are they meant to do that all day? They shouldn’t be doing their prayer & Bible study on work time as far as I’m concerned.

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