A claimant, born in 1920, filed for old age insurance benefits in 1985. She needed 31 quarters of credit (QC) in order be “fully insured” under the prevailing social security rules. She claimed twelve quarters of self-employment income as a secretary for her church from 1981 through 1983. During those twelve quarters, she paid self-employment taxes, including social security taxes and federal income This brought her QC to 33, enough to qualify her for benefits.
Her claim, however, was denied initially and upon reconsideration on the grounds that she was not truly self-employed, but that she was an employee of the church, which was a tax-exempt organization, and that her work was not covered employment unless the church filed a waiver certificate (form SS-15)
She applied for a hearing. The hearing judge agreed with her that her work for the church from 1981 to 1983 was self-employment. He ruled that she had 33 quarters of credit, enough to qualify her for benefits.
The Appeals Council, however, reviewed the case on its own motion and overruled the administrative law judge’s decision.
The Appeals Council found that claimant was an employee of the church. The church provided her with an office and office supplies. She had not incurred any business expenses (although her representative claimed after the hearing that she had bought her own typewriter). She had not advertised her services as a secretary to the public. She had not claimed any business expenses on her tax returns and had not even filed a Schedule C. She had not obtained a business license. She had not performed services for any other “employers.” She had not filed her 1981 and 1982 self-employment tax returns until August, 1984 and October, 1984, respectively. She had not filed self-employed tax returns for 1978-1980, despite her claim that she was self-employed. Looking at the totality of the circumstances, the Appeals Council found that, despite her having filed self-employed taxes for the years in question, she was actually an employee of the church and her work was not covered employment. Because her 21 quarters of credit were not enough to achieve fully insured status, her application for OAIB was denied.
See Social Security Ruling (SSR) 89-2a.
This material should not be construed as legal advice for any particular fact situation, but is intended for general informational purposes only. For advice specific to any individual situation, an experienced attorney should be contacted.