13 Nov Can a church board amend a minister’s housing allowance?
Question: Our minister would like to increase his housing allowance due to higher expenses than expected. Can our board amend it?
Answer: Yes, your church can amend the housing allowance, but you must pay attention to the following rules:
- Proper authorization: The amended housing allowance must be authorized by the same group that designated the original
- In writing: The amendment must be duly recorded in the minutes, dated, and recorded at or shortly after the meeting in which the amendment is approved
- Prospective application: An amended housing allowance only operates “prospectively,” meaning it takes effect on the date it is approved, through the rest of the year and cannot apply retroactively
A minister may ask for this increase if their housing allowance is not enough to cover all housing expenses due to circumstances like unforeseen housing expenses or the purchase of a new home.
Whatever the reason, if a minister’s housing expenses exceed the church-designated housing allowance for the year, but still do not exceed the fair rental value of the home (furnished, plus utilities), then the minister may not be receiving the full value of this important tax benefit.
Original content by HR Ministry Solutions. This information is provided with the understanding that Payroll Partners is not rendering legal, human resources, or other professional advice or service. Professional advice on specific issues should be sought from a lawyer, HR consultant or other professional.