Marcus Lindstrom | iStock | Getty Images
When a loved one who receives Social Security benefits dies, you may be wondering how the government manages to stop sending that monthly money.
Or perhaps there is a surviving spouse or dependent who relied on that income and is wondering if some form of payment can continue.
While social security rules can be complicated, the bottom line is that the deceased’s benefits stop upon death. For survivors, it depends on several factors how you get benefits – and whether you qualify.
First, it is important that the Social Security Administration is notified as soon as possible after the person dies.
In most cases, funeral homes notify the government. A form is available that those companies use to report the death.
The person serving as executor [of the estate] or the surviving spouse can also call Social Security, ”said certified financial planner Peggy Sherman, a principal adviser with Briaud Financial Advisors in College Station, Texas.
More from Personal Finance:
Hospitals must now publish consumer prices online
Dead people can still get $ 600 incentive vouchers
How to Lower Medicare Costs
There are a few things to keep in mind. To begin with, a person does not owe any Social Security benefits for the month of their death.
“Any benefits paid after the month in which the person died must be repaid,” Sherman said.
With Social Security, each payment received represents the benefits from the previous month. So if someone dies in January, the check for that month – which is paid in February – must be returned when it is received. If payment is made by direct deposit, the bank holding the account must be notified so that it can return benefits sent after the person’s death.
It may come as no surprise that using someone else’s benefit after their death is a federal crime, regardless of whether the death has been reported or not. If the Social Security Administration is notified that fraud may be taking place, the allegation will be assessed and a possible criminal investigation may be warranted. To combat duplicity, the agency links data to other government agencies to identify unreported deaths.
Regarding the benefits available to survivors, if a spouse or eligible dependent already received money based on the deceased’s track record, the benefit is automatically converted into survivor benefits when the government becomes aware of the death Sherman said.
“For all other cases, the surviving spouse will have to call Social Security and make an appointment to apply for survivors’ benefits,” said Sherman. “You cannot do this online.”
Once the widow or widower has reached their own full retirement age, they can get the full benefits from their late husband, Sherman said. They can claim reduced benefits as early as age 60, as opposed to the standard earliest claim age of 62.
If the survivor qualifies for Social Security on their own record, they can switch to their own benefit at any time between the ages of 62 and 70 if their own payment were higher.
An ex-spouse of the deceased may also be entitled to benefits, provided he meets certain specific qualifications.
Benefits may also be available for minor children of a deceased person, as well as for a surviving spouse to care for the children.
Finally, after the death of a Social Security recipient, survivors generally receive a one-time benefit of $ 255.