A Social Security Beneficiary Dies: Which Payments Can Be Kept?

There's no doubt that the rules around Social Security payments are confusing. This is especially true for those faced with the death of a family earner who was receiving retirement benefits.  

Some families assume that they can keep a recently deceased family member’s Social Security payment, only to find that Social Security later withdraws it from the account. If the payment has been spent, Social Security might then sue the family for the misspent funds. Other families assume that any payment received after the death of the recipient must be returned, but that’s not always the case either.

How do you know which payments can be kept?

The Key Facts to Remember: 

(1) Any Social Security payment received during the month of death can be kept.

(2) Any payment received after the month of death must be returned.   

This is the case because Social Security payments are received for benefits "earned" the month prior.  Therefore payments received during the month of death can be kept by survivors.

Example 1: John Doe dies on the second of May. A Social Security check arrives in John’s account on May third. His family can keep the money because the May check is actually payment for April, and John survived all of April.    

Example 2: Jane Doe dies on the thirtieth of May.  A Social Security check arrives on the third of June in Jane’s account. Her family cannot keep the money because Jane died the last day of May, and Social Security doesn’t make payments for the month the death occurs.   

Most of the time, Social Security payments end abruptly. To continue receiving support, family members should apply as soon as possible for survivor’s benefits.

What happens if Social Security keeps sending payments?

In some cases, Social Security doesn’t realize someone has died right away, and it will keep sending payments to the deceased beneficiary. But once Social Security notices that it has overpaid (and it eventually will), it will either deduct the overpayments from the account it was sent to or sue whoever took withdrew money.  Therefore, it’s important and legally required to alert Social Security to the recipient’s death immediately and not spend any benefits erroneously paid.  

How do I continue receiving support from Social Security?

Avoid the legal hassles and apply as soon as you can for any survivor’s benefits you may be entitled to receive.  

Survivor’s benefits include: widow(er)’s benefits for spouses and ex-spouses, child survivor’s benefits for minor children or certain disabled children, and even parent benefits for parents who were relying on their child for support. There are also mother/father’s benefits for spouses and ex-spouses who care for the deceased person’s children.

Janice TamComment