Constitutionality of Housing Allowance Affirmed

By Seventh Circuit Court of Appeals

On March 15, 2019, a three-judge panel from the United States Court of Appeals for the Seventh Circuit in Chicago ruled unanimously to uphold the constitutionality of the clergy housing allowance.

“This is a major victory for rabbis, cantors and all clergy,” commented Joint Retirement Board CEO Mitchell J. Smilowitz. “The judges endorsed the arguments in favor of the housing allowance made by the JRB and other denominational retirement plans and completely rejected all of the claims made by the Freedom From Religion Foundation.”

The current case, Gaylor v. Mnuchin, addressed the clergy housing allowance offered by religious organizations whose clergy either rent or own their own homes, as well as those in retirement who receive distributions from a denominational retirement plan, such as the Joint Retirement Board.  

In upholding the clergy housing allowance, the Appeals Court made the following arguments in their ruling:

  • The housing allowance has a secular purpose. It “is simply one of many … rules that provide a tax exemption to employees with work-related requirements.”
  • The housing allowance eliminates discrimination between clergy who live in a parsonage (a congregation-owned home) and those who receive the allowance.
  • The housing allowance does not advance religion. “The primary effect of [the housing allowance] is … to ‘allow churches to advance religion, which is their very purpose.’”
  • The housing allowance is constitutional in light of historical practices and understandings. The court found “substantial evidence of a lengthy tradition of tax exemptions for religion, particularly for church-owned properties.”

Read the full text of the Appeals Court decision.

The Joint Retirement Board was very active in fighting for the housing allowance. The JRB participated in a legal brief brought by the Church Alliance, a coalition of 38 CEOs of denominational benefits boards. The Rabbinical Assembly, Cantors Assembly, Jewish Theological Seminary, United Synagogue of Conservative Judaism, Jewish Educators Assembly and North American Association of Synagogue Executives all signed onto the brief.  JRB CEO Mitchell J. Smilowitz sits on the Steering Committee of the Church Alliance.

The Freedom From Religion Foundation (FFRF), the atheist group which brought the lawsuit, has 90 days to appeal this ruling. FFRF can seek a review of the decision by all members of the Seventh Circuit Court of Appeals or appeal this ruling to the U.S. Supreme Court.  Given the unequivocal tone of this opinion, both of these options may offer a relatively limited chance of success.

FFRF also may choose to file a new lawsuit in another jurisdiction with the hopes of getting a more favorable decision.  It would most likely take several years for a new lawsuit to work its way through the courts. 

The JRB will continue to keep you informed on news regarding the clergy housing allowance. For more information, see the Church Alliance’s summary of the ruling. If you have questions about this case or the rules governing how to claim the clergy housing allowance, please call us at 888-JRB-FREE (572-3733) or send an email to