The death of a loved one, whether expected or unexpected, can cause both emotional and financial chaos. For even the most prepared, there can be bumps in the road, especially when it comes to Social Security benefits.
Social security benefits are calculated using credits. A worker can earn up to four credits each year. In 2019, for example, you can earn one credit for each $1,360 of wages or self-employment income you have. When you have earned $5,440, you have earned the four credits for the year. The number of credits needed to provide benefits for survivors depends on the worker’s age when they die. No one needs more than 40 credits (10 years of work) to be eligible for any Social Security benefit. But, the younger a person is, the fewer credits they must have for family members to receive survivors benefits.
When a spouse dies, the death should be reported to the Social Security Administration as soon as possible. It’s important to note that you can’t report the death of a loved one or apply for benefits online; this must be done over the phone or in person. In most cases, the funeral home will report a person’s death to the Social Security Administration. You can give the funeral home the deceased person’s Social Security number if you want them to make the report.
A one-time payment of $255 can be paid to the surviving spouse if he or she was living with the deceased; or, if living apart, was receiving certain Social Security benefits on the deceased’s record. If there is no surviving spouse, the payment is made to a child who is eligible for benefits on the deceased’s record in the month of death.
If the deceased was receiving Social Security benefits when he or she died, the benefits received for the month of death and any later months must be repaid to the Social Security Administration. For example, if a person dies in July, and benefits are paid for July and August, both months’ benefits must be returned. A more specific example:
Your spouse received a social security check on the 3rd of January but passed away on January 28th. The death was reported to the Social Security Administration on February 4th, after the deceased spouse’s February Social Security payment was received. The surviving spouse is required to pay back both the February social security payment and the January payment because the death occurred in January.
Additionally, when a Social Security beneficiary dies, his or her surviving spouse is eligible for survivor benefits. A surviving spouse can collect 100 percent of the late spouse’s benefit if the survivor has reached full retirement age, but the amount will be lower if the deceased spouse claimed benefits before he or she reached full retirement age. If you were already receiving spousal benefits on the deceased’s work record, Social Security will in most cases switch you automatically to survivor benefits when the death is reported. You will not receive a survivor benefit in addition to your own retirement benefit, instead, Social Security will pay the higher of the two amounts.
The survivor benefit is generally calculated on the benefit your late spouse was receiving from Social Security at the time of death (or was entitled to receive, based on age and earnings history, if he or she had not yet claimed benefits). The actual amount of your payment will differ according to your age and family circumstance.
The information provided is not intended to be legal advice and does not constitute any attorney/client relationship. You should consult with an attorney for individual advice regarding your own situation.
Ms. Melancon is an attorney with Legacy Estate & Elder Law of Louisiana, LLC with offices in Baton Rouge and Lake Charles, LA. The primary focus of her practice is estate planning, probate, special needs planning, and elder law. For more information or to attend an upcoming estate planning seminar, call her office at (225) 744-0027