New Law Enables Tribal Council Members to Participate in Social Security

On September 20, 2018, a bill was enacted that permits the Social Security Administration to enter into agreements with Native American tribes in order to extend Old Age, Survivors, and Disability Insurance benefits to tribal council members.

The Act, formally known as the Tribal Social Security Fairness Act of 2018, allows Native American tribes to request Social Security coverage for tribal council members. Participation in such an agreement is voluntary for tribes. However, if a tribe agrees to participate, the agreement extends coverage to all of the tribe's council members and may not be terminated at a later date. In addition to providing the key benefits of Social Security on a prospective basis, the Act also allows tribal council members to receive Social Security credit for any Federal Insurance Contributions Act (FICA) taxes paid prior to an agreement reached under this Act. To receive credit, the taxes must have been paid on time, in good faith, and not later refunded.  

Parity with State and Local Government Employees

The Act extends to tribal council members similar rules that apply to state and local government employees. When the Social Security Act was initially established, tribal council members, as well as state and local government employees, were excluded from coverage due to 10^th Amendment concerns. The Social Security Act was amended in 1950 to allow coverage of state and local government employees by voluntary agreement. However, tribal council members were not included in this amendment, and in 1959, the Internal Revenue Service specifically held that services performed by tribal council members did not constitute "employment" for purposes of FICA taxes. The Social Security Administration reiterated this policy in 2006, in response to confusion about coverage of tribal council members. The 2006 policy indicated that, while tribal council members' income was treated as taxable for federal income tax purposes, it was still not subject to FICA taxes.

The Act passed with bipartisan support, even receiving unanimous support in the U.S. Senate, and was widely supported by the National Congress of American Indians.

For more information contact Audra Ferguson-Allen, Robert Gauss, Lisa Harrison, Lindsay Knowles, or Shalina Schaefer, or the Ice Miller Employee Benefits attorney with whom you work.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.