What happens to the social security money when someone dies

One aspect of managing a loved one’s final affairs that most people aren’t familiar with is how to handle their last Social Security retirement benefits check. Surviving family members often incorrectly assume that the estate is entitled to keep the beneficiary’s final payment or that it can be spent on things like funeral expenses. The truth is that a senior’s last check usually must be returned to the Social Security Administration (SSA).

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Social Security retirement benefits are paid in the month following the month for which they are due. For example, a senior’s January benefit is received in February, February’s benefit is direct-deposited in March and so on. It’s important to understand that the SSA only pays benefits for a specific month if the beneficiary was alive for the entirety of that month.

For instance, if your mom received her SS payment on April 10 and she passes away on April 29, then her estate is allowed to keep that check because it is actually payment for the month of March. However, if her next check is automatically direct-deposited in May, it will need to be returned. This is because that check is for the month of April, and the SSA does not pay benefits for the month of a beneficiary’s death.

The SSA should be notified immediately upon the passing of a beneficiary. Most funeral homes will take care of this on behalf of the surviving family if they provide the late beneficiary’s Social Security number. Ultimately, however, it is the survivor's responsibility to ensure the death is reported as soon as possible, particularly if they are acting in the role of representative payee.

Report a death to Social Security by calling toll-free at 1-800-772-1213 (TTY 1-800-325-0778) between 7 a.m. and 7 p.m. Monday through Friday or by visiting a local Social Security office. While the SSA has made many features and services available on their website, it is not currently possible to make a Social Security death notification online.

After a prolonged suspension of face-to-face services due to the coronavirus pandemic, local SSA offices have resumed in-person appointments. Scheduling appointments in advance is still strongly recommended, though. To find your local SSA field office’s contact information, visit SSA.gov.

Prompt notification allows the SSA to cease paying benefits as soon as possible, minimizing the likelihood of confusion over whether a late beneficiary’s last check must be returned or not. If the SSA does happen to make a payment for the month of a beneficiary’s death, do not spend it. If a deceased loved one received their benefits in check form, do not cash any checks for the month of their death or later. Instead, return them to the SSA as soon as possible.

If a late beneficiary had arranged for their payments to be directly deposited into a bank account, this can speed up the returns process significantly. However, countless surviving family members have unknowingly spent these final payments and been caught off guard when the amount of the payment is automatically withdrawn from the direct deposit account and returned to the SSA by the financial institution. Keep in mind that the SSA does not prorate the beneficiary’s payment for the month of death either.

According to the SSA, “If a benefit payment is received by direct deposit, contact the bank or other financial institution as soon as possible and ask them to return any funds received for the month of death or later.” Acting quickly will help surviving families avoid any financial confusion during an already difficult time.

Reporting a beneficiary’s death is also an important step in determining if any surviving family members are entitled to benefits based on the beneficiary’s work history. In some cases, survivors benefits are not paid retroactively and a person must gather information and documents to apply, so don’t delay. For more information on survivors benefits and other Social Security programs, visit the SSA website.

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The end of a person’s life doesn’t necessarily mean the end of their social security payments. Depending on factors like income and dependents, Social Security checks will still be issued to someone else even after the original recipient passes away.

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According to the Social Security Administration website, if you work and pay into Social Security, part of those taxes go toward survivor benefits, which means your surviving spouse, children and even parents could be eligible for payments based on your earnings. Likewise, you and your family could be eligible for benefits based on the earnings of someone else who died — as long as the deceased worked long enough to qualify for benefits. If you have no survivors or dependents, the payments simply cease.

Whenever someone dies, the Social Security office should be notified immediately. This is usually handled by the funeral home, which sends in a form called Statement of Death by Funeral Director.

If that doesn’t happen, you’ll have to call the SSA — you cannot report a death or apply for survivor benefits online.

If you need to report a death or apply for survivor benefits, call 1-800-772-1213 (TTY 1-800-325-0778) between 8 a.m. and 7 p.m. Monday through Friday.

You’ll need to provide the deceased person’s Social Security number when applying. In the event of your death, your survivor will need to provide your social security number. The executor of the estate can also call Social Security, CNBC reported. Here are some things to remember for those getting benefits on a spouse’s or parent’s record, according to the SSA:

Social Security will automatically change any monthly benefits received to survivors’ benefits after it receives the report of death.
The agency might be able to pay a Special Lump-Sum Death Payment automatically.
One thing to keep in mind is that no social security benefits are due for the month of a person’s death.

“Any benefit that’s paid after the month of the person’s death needs to be refunded,” Peggy Sherman, a certified financial planner and lead advisor at Briaud Financial Advisors in College Station, Texas, told CNBC.

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Meanwhile, if your spouse or qualifying dependent were already getting money based on your record, that benefit will auto-convert to survivor’s benefits when the government gets notice of your death. If the surviving spouse has already reached their own full retirement age, they can get their deceased spouse’s full benefit. You can apply for reduced benefits as early as age 60 — or age 50 if disabled — which is a couple of years earlier than the standard earliest claiming age of 62.

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Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.

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Your spouse, children, and parents could be eligible for benefits based on your earnings. You may receive survivors benefits when a family member dies. You and your family could be eligible for benefits based on the earnings of a worker who died. The deceased person must have worked long enough to qualify for benefits.

For example, if a recipient dies on June 24, the payment made on July 3 will have to be returned. Consequently, in most cases the estates of decedents must pay back the Social Security Administration (SSA) for the last payment received.

Within a family, a child can receive up to half of the parent's full retirement or disability benefits. If a child receives survivors benefits, they can get up to 75% of the deceased parent's basic Social Security benefit.

Notify Social Security as soon as possible when someone getting benefits dies. In most cases, the funeral director will report the person's death to Social Security. Give the funeral director the deceased's Social Security number so he or she can report the death.