A new bill could lead to a big rise in Social Security benefits, giving some people over $2,000 more each month. At the moment, retirees and disabled people who get Social Security benefits get them every month. I
f a person dies, their family members can get survivor benefits, which can include a lump sum death payment. But this one-time payment has been set at $255 since 1954, even though living costs have gone up a lot since then.
Food, housing, and medical care have all become much more expensive, so the set amount of $255 will not cover the funeral costs, which have also gone through the roof.
The people who are working on the Social Security Survivor Benefits Equity Act say that the present payment does not even begin to cover these costs.
In an interview with Newsweek, Kevin Thompson, CEO of 9i Capital Group and a finance expert, said, “This would be a big step towards bringing the death benefit in line with today’s dollars when adjusted for inflation.”
“This will help offset the average cost of funerals and other arrangements in the event of death,” he said.
To keep up with the rate of inflation, Senator Peter Welch of Vermont proposed a bill this week that would raise the lump sum death benefit from $255 to $2,900. This plan is being led by Senators Elizabeth Warren of Massachusetts and Bernie Sanders of Vermont.
Welch said in a statement, “Forest service costs should be the last thing on the minds of families who have lost a loved one.”
“But because benefits meant to help people pay for funerals have not kept up with inflation, the cost of burying a loved one has become very important to many families who are grieving.”
The National Funeral Directors Association says that a full funeral and cremation service cost $700 in 1954, the first year that a lump sum payment of $255 was accepted.
The price has gone up to an average of $6,280 today, while a funeral with a coffin costs about $8,300 today. Because of these big jumps, the suggested rise in the death benefit has been needed for a long time.
Thompson thinks that the bill has a good chance of passing because this benefit has not been changed in 70 years. “People often laugh at how much money the Social Security death benefit is,” he said.
“It at least needs to be raised to keep up with inflation.” During these hard times, this will help families a lot because they often have to raise money to bury their loved ones.
On the other hand, not everyone is as positive about the bill’s chances as Thompson is. The head of Belmont Capital Advisors, Joseph Patrick Roop, had some doubts.
“The bill to raise the Social Security death benefit has gotten a lot of attention, but it still has a low chance of passing because of political and financial problems,” he said.
“Bills that want to change or add to Social Security often run into problems, especially since there is a larger debate about whether or not Social Security is solvent and how it could be reformed.”
Conditions to receive this Social Security payment
If the raise is approved, it would happen in 2025 and be based on the consumer price index for wage earners and office workers in cities.
Survivors must meet certain requirements and apply within two years of their loved one’s death in order to get the lump sum death benefit.
The payment usually goes to the living spouse, but if there is no surviving spouse, it can go to the children of the person who died.
Family members who are still alive must also tell Social Security about the death of a loved one so that no future benefits are paid to the wrong person.
Survivor benefits are offered to surviving spouses aged 60 or older, spouses aged 50 or older with a disability, or spouses caring for the deceased’s child. They are in addition to the lump sum death payment.
Under certain circumstances, children under 18 years old, children with disabilities, stepchildren, grandkids, and parents who depended on the deceased may also be able to get survivor benefits.
