On July 24, the U.S. House of Representatives voted by unanimous consent to pass H.R. 6124 – The Tribal Social Security Fairness Act, which seeks to put tribes on a level playing field with local governments when it comes to Social Security. Unlike state and local government elected leaders, tribal leaders do not have the ability to opt-in to Social Security coverage for services performed, although they still pay income tax. Over the last year, NAFOA has been very active in advocating for fairness on Social Security issues, including testifying before the Senate Committee on Indian Affairs last November.
“This bill rights a wrong for our tribal leaders, ensuring that they can receive Social Security benefits they deserve,” U.S. Congressman David Reichert said in a statement. “For too long, they haven’t been given the chance to pay into Social Security, and that just isn’t fair. This bill provides a straightforward solution to this problem, so that our tribal leaders no longer need to worry about whether or not they can rely on the Social Security benefits they deserve.”
Generally, the amount of benefits received from Social Security depends on how much an employee earned over their career and paid into Federal Insurance Contributions Act (FICA) through taxes. FICA is a federal payroll tax imposed on employees and employers to fund Social Security and Medicare – federal programs that provide benefits to retirees, disabled people, and children of deceased workers.
FICA initially did not apply to state and local governments but “legislative officials” were later given the option of participating. Consistent with the view of the Internal Revenue Service, tribal government leadership pay taxes on income received for services to the government. However, the current state of the law does not allow tribal council members the option to pay into FICA and receive benefits from the Social Security program. H.R. 6124 (and its Senate companion - S. 1309) allows tribes to “opt-in” to Social Security coverage for their otherwise excluded tribal council members.
If you have any questions or comments, please contact Jennifer Parisien at Jennifer@nafoa.org or (202) 558-8040.