Monks and Nuns State Pension

Monks and Nuns State Pension

by Ashley Clark, Director

The Court of Appeal looks to set to have to rule on a question of state benefit entitlement for Monks and Nuns.

The case in question could create a huge swathe of changes for Benedictine orders and other religious orders where Monks and Nuns are not paid a wage and therefore pay no taxes.

Under basic UK pension law, people are entitled to pension credit, which effectively tops up any shortfall in National Insurance Contributions and therefore tops up State Pension entitlement to ensure a minimum guaranteed income called the Minimum Guarantee (currently £130 per week).

Currently, nuns and monks "who are fully maintained by their order" are not entitled to means-tested pension credit.  Sister Mary Scott, who runs Oulton Abbey near Stone, just a few miles from our head office in Staffordshire, is looking to retire early due to ill health and is looking to change the law and claim state support.

Permission has been granted for a full hearing by the Court of Appeal, which could affect the pension rights of 6,600 nuns and monks in the UK.

The arguments being put forward that the Abbey locally has supported a Nursing Home and Playgroup and that nuns have technically worked and contributed to society as well as being self supporting and no burden on the state thus far.  

We suggest that if nuns and monks have worked, even if judged as self employed with a fee of zero, she and all nuns and monks should pay class 2 National Insurance contributions backdated to the age of 16 to be eligible for any State Pension or Pension Credit help.

In addition, accommodation, food and clothing has been supplied - are these then a taxable benefits in kind?  The answer to all of this is of course not an easy one.

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