The salary and benefits paid to the Senators and Representatives of the U.S. Congress is a constant source of public fascination, debate, and most of all, fake news.

The rumor that members of Congress can retire with the same pay after only one term has been making its way through the email chains of disgruntled citizens for years, along with the mistruth that congress members don't need to pay off their student loans. Another infamous email demanding passage of a mythical “Congressional Reform Act” claims members of Congress do not pay Social Security taxes. That, too, is wrong.

Salaries and benefits of members of the U.S. Congress have been the source of taxpayer unhappiness and rumors over the years. Here are some facts for your consideration.

The current base salary for all rank-and-file members of the U.S. House and Senate is $174,000 per year, plus benefits.﻿﻿ Salaries have not been increased since 2009. Compared to private-sector salaries, the salaries of members of Congress is lower than many mid-level executives and managers.

Rank-and-File Members:

The current salary for rank-and-file members of the House and Senate is $174,000 per year.

Members are free to turn down pay increases, and some choose to do so.

In a complex system of calculations carried out by the U.S. Office of Personnel Management, congressional pay rates also affect the salaries of federal judges and other senior government executives.

Congress: Leadership Members' Salary

Leaders of the House and Senate are paid a higher salary than rank-and-file members.

Senate Leadership

Majority Party Leader - $193,400

Minority Party Leader - $193,400﻿﻿

House Leadership

Speaker of the House - $223,500

Majority Leader - $193,400

Minority Leader - $193,400﻿﻿

Pay Increases

Members of Congress are eligible to receive the same annual cost-of-living increase given to other federal employees if any. The raise takes effect automatically on January 1 of each year unless Congress, through the passage of a joint resolution, votes to decline it, as Congress has done since 2009.

Benefits Paid to Members of Congress

You may have read that Members of Congress do not pay into Social Security. Well, that's also a myth.

Social Security

Prior to 1984, neither Members of Congress nor any other federal civil service employee paid Social Security taxes. Of course, they were also not eligible to receive Social Security benefits. Members of Congress and other federal employees were instead covered by a separate pension plan called the Civil Service Retirement System (CSRS). The 1983 amendments to the Social Security Act required federal employees first hired after 1983 to participate in Social Security.

These amendments also required all Members of Congress to participate in Social Security as of January 1, 1984, regardless of when they first entered Congress. Because the CSRS was not designed to coordinate with Social Security, Congress directed the development of a new retirement plan for federal workers. The result was the Federal Employees' Retirement System Act of 1986.

Members of Congress receive retirement and health benefits under the same plans available to other federal employees. They become vested after five years of full participation.

Health Insurance

Since all provisions of the Affordable Care Act or “Obamacare” took effect in 2014, members of Congress have been required to purchase health insurance plans offered through one of the Affordable Care Act-approved exchanges in order to receive a government contribution toward their health coverage.

Prior to the passage of the Affordable Care Act, insurance for members of Congress was provided through the Federal Employees Health Benefits Program (FEHB); the government’s employer-subsidized private insurance system. However, not even under the FEHB plan was the insurance “free.” On average, the government pays about 72% of the premiums for its workers.﻿﻿ Like all other federal retirees, former members of Congress paid the same share of premiums as other federal employees.

Retirement

Members elected since 1984 are covered by the Federal Employees' Retirement System (FERS). Those elected prior to 1984 were covered by the Civil Service Retirement System (CSRS). In 1984, all members were given the option of remaining with CSRS or switching to FERS.

As it is for all other federal employees, congressional retirement is funded through taxes and the participants' contributions. Members of Congress under FERS contribute 1.3% of their salary into the FERS retirement plan and pay 6.2% of their salary in Social Security taxes.

Members of Congress become eligible to receive a pension at the age of 62 if they have completed a total of 5 years of service. Members who have completed a total of 20 years of service are eligible for a pension at age 50, are at any age after completing a total of 25 years of service.

No matter their age when they retire, the amount of the members’ pension is based on their total years of service and the average of their highest three years of salary. By law, the starting amount of a Member’s retirement annuity may not exceed 80% of his or her final salary.﻿﻿

Can They Really Retire After Only One Term?

Those mass emails also claim that members of Congress can get a pension equal to their full salaries after serving only one term. That one is partly true but mostly false.

Under the current law, which requires at least 5 years of service, members of the House of Representatives would not be eligible to collect pensions of any amount after serving only one term, since they come up for reelection every two years.

On the other hand, U.S, Senators—who serve six-year terms—would be eligible to collect pensions after completing only one full term. In neither case, however, would the pensions be equal to the member’s full salary.

While it is highly unlikely and has never happened, it is possible for a longtime member of Congress whose pension began at or near 80% of his or her final salary could—after many years of accepted annual cost-of-living adjustments—see his or her pension rise to equal his or her final salary.

Average Annual Pensions

According to the Congressional Research Service, there were 617 retired members of Congress receiving federal pensions based fully or in part on their congressional service as of October 1, 2018. Of this number, 318 had retired under CSRS and were receiving an average annual pension of $75,528. A total of 299 Members had retired with service under FERS and were receiving an average annual pension of $41,208 in 2018.﻿﻿

Allowances

Members of Congress are also provided with an annual allowance intended to defray expenses related carrying out their congressional duties, including "official office expenses, including staff, mail, travel between a Member's district or state and Washington, DC, and other goods and services."

Outside Income

Many members of Congress retain their private careers and other business interests while they serve. Members are allowed an amount of permissible "outside earned income" limited to no more than 15% of the annual rate of basic pay for level II of the Executive Schedule for federal employees, or $28,845.00 a year in 2018.﻿﻿ However, there is currently no limit on the amount of non-salary income members can retain from their investments, corporate dividends or profits.

House and Senate rules define what sources of "outside earned income" are permissible. For example, House Rule XXV (112th Congress) limits permissible outside income to "salaries, fees, and other amounts received or to be received as compensation for personal services actually rendered." Members are not allowed to retain compensation arising from fiduciary relationships, except for medical practices. Members are also barred from accepting honoraria - payments for professional services typically provided without charge.

Perhaps most importantly to voters and taxpayers, member of Congress are strictly prohibited from earning or accepting income that may appear to be intended to influence the way they vote on legislation.

Tax Deductions

Members are allowed to deduct up to $3,000 a year from their federal income tax for living expenses while they are away from their home states or congressional districts.﻿﻿

Early History of Congress Pay

How and what amount members of Congress should be paid has always been a debated issue. America’s Founding Fathers believed that since congressmen would typically be well-off anyway, they should serve for free, out of a sense of duty. Under the Articles of Confederation, if U.S. congressmen were paid at all, they were paid by the states they represented. The state legislatures adjusted their congressmen’s pay and could even suspend it completely if they became dissatisfied with them.

By the time the first U.S. Congress under the Constitution convened in 1789, members of both the House and Senate were paid $6 for each day there were actually in session, which was then rarely more than five months a year.

The $6 per-day rate remained the same until the Compensation Act of 1816 raised it to a flat $1,500 a year. However, faced with public outrage, Congress repealed the law in 1817. Not until 1855 did members of Congress return to being paid an annual salary, then $3,000 per year with no benefits.﻿﻿