BRIGHTON -- The Archdiocese of Boston will increase priest stipends on July 1 in an effort to compensate for higher living expenses and defray the cost of Social Security. The goal of the new policy is to be “fair and just for all priests,” according to Father Robert Connors, chair of the Stipend Committee.

The benefits package for archdiocesan priests was recently approved by Cardinal Seán P. O’Malley after two consultations with the Presbyteral Council. The policy is usually reviewed about every three years but has not been changed since 2003, except for annual cost of living increases of 3 percent.

Father Arthur M. Coyle, secretary for pastoral and ministerial services, laid out the two primary reasons for the increase in a letter to the priests of the archdiocese. The new policy takes into account both the significant increase in the cost of living in the last five years as well as the fact that priests pay all their own Social Security, he said.

Priests are “dual-status taxpayers,” which means that the government considers them employees for income tax purposes but considers them self-employed for Social Security purposes. Normally an employer would pay half of Social Security, but priests pay the entire 15.3 percent. Under the new policy, the archdiocese will supplement the priests’ pay to assist with this cost. For priests who not participate in Social Security, an equal amount will be paid into the Clergy Fund for their health care in retirement.

Under the priests’ stipend and benefits policy for the 2007 calendar year, the base pay for archdiocesan priests was just over $21,500. The new policy will take effect on July 1, 2007, and the new policy will compensate priests on a fiscal-year basis. The base pay will increase to $25,000, which is meant to cover the cost of living for a newly ordained priest.

Father Connors said that Stipend Committee members sought a “fair and just amount that a young priest, newly ordained, would need.” They took into account that the amount should cover car payments, clothing and vacation, he said.

Father Connors formerly served as the archdiocese’s secretary for ministerial personnel and continued to serve as head of the Stipend Committee after returning to parish ministry at St. Marguerite d’Youville Parish in Dracut.

As in the past, priests will receive compensation based on their years of service in addition to their base salary. Under the new policy that amount will increase from $75 to $100 per year since ordination. There will be a new $1,000 minimum for all priests who have served one to 10 years. Additionally, the amount will cap at 50 years of service.

This system is a way to honor priests for their many years of dedication to the archdiocese, Father Connors said.

The previous policy offered priests $4,000 of tax-deductible reimbursement for work-related costs. Because under the new policy reimbursement will be taxable, the professional expenses allotment has been increased to $5,000.

There will also be a change in the automobile insurance reimbursement policy. In the past, a priest paid the first $700 of his annual auto insurance bill and his parish paid the remainder. In the future, parishes will pay the initial $700 and priests will pay the remainder, unless they live in an area with high insurance. In those cases, the amount will be determined on a sliding scale.

Additionally, the priests will receive an allotment for their required annual spiritual retreat.

As part of their benefits, priests also receive room and board, medical insurance and personal property insurance.

The introduction to the package outlines the policies on Mass stipends, bonuses, as well as offerings for weddings, baptisms and funerals.

Priests of religious orders who are serving in an archdiocesan assignment, have a base pay of $23,000 and a $4,000 professional allotment. The difference in pay is due to the fact that the stipend and allotment go directly to the religious order and for this reason they are not taxable. Religious order priests receive the same retreat allotment and seniority increment of $100 per year since ordination. They also receive room and board, health care and car insurance. They do not receive retirement benefits from the archdiocese, which are provided by their religious order.

According to Father Connors, the new policy will remain in effect for three years.

Priestly compensation has undergone many changes in the history the Archdiocese of Boston. Prior to the early 1950s, pastors retained parish income that remained after expenses. Then an archdiocesan synod instituted a universal income for all priests. Priests began receiving $50 to $89 per month in addition to retaining Mass stipends, bonuses and gifts from parishioners. In the 1960s the stipend was increased to $100 per month.

In 1968, a committee appointed by Cardinal Richard Cushing established a minimum annual salary of $3,500 for pastors and $3,000 for assistants.

In the 1970s, the concern for equity among priests prompted changes. Priests were given a monthly stipend with an additional allowance based on years since ordination. Easter and Christmas collections were no longer retained by pastors but were directed to the Clergy Fund to provide for all priests’ retirement.

In 1972, then-Archbishop Humberto Medeiros set the base salary at $150 a month plus $150 for professional expenses. Also included was an increment of $50 for each year of priestly service. In 1977, the base salary increased to $2,550, professional expenses allowance to $2,550 and the years-of-service increment to $75. The salary continued to increase throughout the 1980s and 1990s.

The Stipend Committee, which met a dozen times before approving the 2007-2008 fiscal year policy, wanted to respect the work of priests, consider the policies of other dioceses and acknowledge the high cost of living in the Boston area, Father Connors said.

To learn more about how priests are compensated in other dioceses, the committee relied on surveys, including the 2005 addition of “The Laborer is Worthy of His Hire.” The survey was put out by the National Federation of Priests’ Councils, he said.

“The most important criteria challenge to the committee was to propose a stipend and benefit package that was fair and just, recognizing that every priest lives his life in a different way but there is a general common denominator of mercy and justice,” Father Connors said.