How Social Security Benefits Work
It's important to first understand the basics of how Social Security benefits are earned and calculated. Each year up to four credits can be earned. In 2020, a credit is earned for each $1,410 of wages or self-employment income. In order to obtain all four credits for the year, a worker must earn $5,640. If you have more than 40 lifetime credits (equal to 10 years of work), you are eligible for Social Security benefits. However, the younger a person is when they die the fewer credits they need in order for family members to qualify for survivor benefits. The amount of benefits paid out will depend on your average monthly earnings throughout your working years.
What to do When a Family Member Dies
When a family member dies, notify Social Security as soon as possible. In most cases, the funeral home will report the death to Social Security. You can provide information to the funeral director to help them make the report. Otherwise, you'll need to call or visit a local Social Security office. Deaths cannot be reported online.
If the deceased was receiving monthly Social Security benefits, any benefits for the month of death or later must be returned. For example, if the deceased passed in January, the benefits for February or later must be returned. Do not cash any benefits received by check. Return the checks to Social Security as soon as possible. If benefits were being paid via direct deposit, contact the financial institution and request they be returned.
In some cases, surviving family members are eligible to receive all or part of the deceased's Social Security benefits. Widows or widowers can receive partial benefits as early as age 60, or full benefits at retirement age or older. If a surviving spouse is disabled and their disability began at least seven years before their spouse's death, they can receive benefits as early as age 50. If you are already receiving retirement benefits, you can only apply for benefits as a widow/widower if the retirement benefit you receive is less than the benefits you would receive as a survivor.
Surviving spouses who have not remarried and are caring for the deceased's child age sixteen or younger can receive benefits at any age. In some cases, a surviving divorced spouse can be eligible for the same benefits as a widow or widower. A single, lump-sum payment of $225 is available to surviving spouses if he or she was living with the deceased (or, if living apart, they were receiving certain benefits under the deceased records).
Surviving children are eligible for benefits if they are under age 18 and attending elementary or secondary school full time, or at any age if they have a disability that began before age 22. Benefits can be paid to surviving children (or a spouse caring for the child) even if the deceased didn't have the required number of credits. They are eligible for benefits if the deceased has six credits the three years before their death, which is equal to one and a half years of work.
Parents are eligible for survivor benefits as well, so long as their deceased child was providing at least half of their support and they are not eligible to receive a retirement benefit that is higher than the benefit offered through social security.
The documents needed to apply for survivor benefits will vary depending on your situation. If you're unsure or unable to procure the required documents, don't hesitate to reach out to Social Security. They can contact your state Bureau of Vital Statistics and verify your information online at no cost to you. If they can't verify your information online, they can still help you get the information you need.
The information provided is for informational purposes only. It is not intended to be used, and should not be used, as the sole basis for legal and/or tax advice. Individuals should seek and rely upon the guidance and advice of their own legal and tax counsel before making any decisions regarding any planning, investment, tax concepts or strategies discussed herein. Individual circumstances may vary and results discussed are no guarantees of applicability or future performance.