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Attorneys discuss the Amish waiver and its impact today
SHERRY KARABIN
Legal News Reporter
Published: June 26, 2019
When an employer deducts Social Security and Medicare taxes from an employee’s paycheck, the person assumes the money withheld will lead to retirement and, if needed, disability benefits. But things are not as straightforward for religious groups such as the Amish.
In fact when it comes to members of the Amish community, benefits are often dependent upon whether they have signed and filed Form 4029 (Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits) with the Internal Revenue Service.
According to Roetzel & Andress shareholder Robert Pritt, the form has been in use for many decades, dating back to when the Amish seldom worked outside their homes.
“The so-called ‘Amish waiver’ came into existence because the Amish were religiously opposed to insurance, which is what Social Security was considered by the government,” said Pritt, a former law director for the city of Akron, who now works out of Roetzel’s Naples, Florida office. “The Amish believe it is their job to care for their own as the Bible instructs them to do.
“The government allowed them to opt out, which was a relief to many who were self-employed as farmers or craftsmen and were happy not to pay into a system they never intended to collect from.”
Fast-forward to today and many of those who’ve had their application approved by the Internal Revenue Service wound up working for non-religious businesses out of necessity and the owners deducted Social Security and Medicare taxes from their pay as they are required to do by law.
The problem is when these Amish workers retire and want to collect benefits, they are routinely denied, said Pritt.
“In many cases, they were even sent Social Security statements indicating future benefits,” he said.
More than ten years ago, Pritt represented one Amish man in Ohio, helping him to secure partial benefits that later went to his widow after he passed away.
Now Pritt is handling another case for a Tuscarawas County man, who is seeking to collect on monies he paid into the system.
“My client worked several different blue collar jobs over the years and paid Social Security and Medicare taxes,” said Pritt. “All he wants is what is due him. I initially filed the case in Florida in 2017, but it has been transferred to Akron and is currently before Administrative Law Judge Michael Schmitz.
“I am handling it pro bono because I really want to help this man, who was trying to follow his religion, but was forced by necessity to take jobs outside of his community in order to support his family.”
While Pritt has only handled two cases involving Form 4029, he anticipates there are many more to come, not just in Ohio but potentially in other states where the Amish reside.
Steven G. Thomakos, a solo practitioner in New Philadelphia, who focuses on Social Security disability benefits, workers’ compensation and personal injury matters, represented an Amish man from Sugarcreek in the case of Abe S. Troyer v. Carolyn W. Colvin, acting commissioner of Social Security.
“From 1964 through 1997, my client worked at a company that deducted Social Security and Medicare taxes from his paycheck,” said Thomakos, who formerly interned for Pritt during his tenure as general counsel for the Akron Metropolitan Housing Authority. “He earned 93 quarters of coverage for purposes of satisfying the requirements of the Social Security Act.
“But in January 1998, he completed an IRS Form 4029, exempting him from paying the taxes in the future. The form was approved later that year.
“In 2008 Abe filed an application for disability insurance benefits, but was denied initially and upon reconsideration on the basis of insufficient quarters of coverage as a result of his filing of Form 4029 in 1998.”
Thomakos began representing Troyer immediately after he was denied benefits and continued to serve as his attorney throughout the case.
The matter went before two administrative law judges, with the second ALJ (administrative law judge) issuing a decision in 2013 that Troyer was entitled to benefits.
Court documents explain that the ALJ determined that the form Troyer signed in 1998 was unclear “as to the retroactive nature of waiving retirement insurance benefits earned prior to the date the exemption/waiver became effective.
“According to the ALJ, the Form does not explicitly state that the applicant is waiving benefits earned prior to applying for the exemption/waiver, and therefore the Form is vague and ambiguous…The ALJ further concluded that during the years after Plaintiff signed the Form, the government sent him a yearly statement showing that he was entitled to benefits, and therefore the government is now estopped from asserting the contrary.”
Thomakos said when the Appeals Council reviewed the 2013 decision it failed to adopt the administrative law judge’s conclusions, instead finding that the form was “clear and unambiguous in providing that Plaintiff waived all right to social security benefits.”
“The Appeals Council’s decision became the final decision of Carolyn Colvin, the acting commissioner of Social Security,” he said.
Thomakos appealed the Commissioner’s decision in federal court in the Northern District of Ohio.
On April 17, 2015, U.S. Magistrate Judge Nancy Vecchiarelli affirmed the commissioner’s ruling, denying Troyer benefits.
“It was a very disappointing outcome,” said Thomakos. “Abe ultimately decided not to continue to pursue the matter since he was in his 70s and the case would take years to resolve.”
Thomakos is currently representing another Amish man from Millersburg, Ohio who has also been denied disability benefits.
“Ultimately I think this is something the U.S. Supreme Court may want to review,” he said. “Many of the Amish have an eighth-grade education and they sign these waivers simply because the Bishop recommends that they do so.
“Most have little understanding of the potential benefits they are giving up. They are also unlikely to contact an attorney so they can have the form explained before they sign it,” said Thomakos. “From my perspective, these cases should be part of a larger class action.”
Pritt said the IRS form should be revised.
“Nowhere on the form is there a box to check or an explanation as to how one is to notify the IRS that the individual no longer claims the waiver. Even tax practitioners can easily miss such a technical fine point, let alone an uneducated worker,” said Pritt.
“These emphatically are not cases where people are trying to game the system. They are only trying to obtain benefits to the extent that they paid into Social Security, as a result of their labors for non-Amish employers.
“Some people do not work but want benefits,” said Pritt. “Conversely, these individuals worked for up to 40 years, paid into the system, but are being denied benefits.”