People who depend on Social Security may be able to get a one-time death payment of $255 if they lose a loved one.
This payment was created in 1954 and has not changed in the last 70 years, even though living costs and inflation have gone up and the cost of funeral services has gone up a lot.
As a result, this fixed amount is not as helpful for families managing funeral costs as it used to be.
Because of this, a new bill has been presented in the U.S. Senate to deal with the problem. Senators Bernie Sanders, Elizabeth Warren, and Peter Welch of Vermont all spoke in favor of the Social Security Survivor Benefits Equity Act.
The goal of this bill is to raise the current death benefit to $2,900, which is more in line with how much things cost these days. The people who are sponsoring the bill think that funeral costs should not be a major worry for families who are grieving.
In his speech, Senator Welch said, “Funeral costs should be the last thing on the minds of grieving families when they lose a loved one.”
However, the cost of losing a loved one has become very important to many grieving families because benefits meant to help people pay for funerals have not kept up with inflation.
Welch’s idea shows how much funeral costs have changed by comparing them to prices from the 1950s and now. In the middle of the 20th century, a full memorial and cremation service cost about $700.
Today, the average cost of a funeral with a coffin and burial is about $8,300. The National Funeral Directors Association says that cremation services still cost about $6,280 on average, even though they are a little less expensive.
The impact of the bill on Social Security benefits survivors
The higher death benefit would start in 2025 and be tied to inflation if the bill is passed.
It would be changed based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is also used to figure out the annual cost-of-living changes for Social Security.
Advocacy groups like Social Security Works and the Strengthen Social Security Coalition have backed the plan, which shows how important it is to change this old payment.
At the moment, the lump-sum death benefit of $255 is offered to certain survivors of Social Security beneficiaries who have died. “If you have worked long enough, we make a one-time payment of $255 when you die,” says the Social Security Administration.
People whose loved one has died must ask for this payment within two years of the death. Their eligibility depends on how close they were to the person who died.
For instance, a surviving spouse who was living with the person who died or getting benefits because of their work history is usually qualified.
If there is no surviving spouse, the child(ren) of the deceased may be qualified if their parent’s record showed that they were eligible for benefits at the time of death.
To make sure that payments are handled correctly, beneficiaries’ survivors should tell the Social Security Administration right away when a beneficiary dies.
Even though funeral homes usually tell Social Security about deaths, the beneficiaries should still call the office directly to stop any payments that are still going to the dead person.
Remember that you have to return any Social Security payments you got in the month of death or after. But this depends on when the person died, because relatives may still be able to get benefits like Medicare premium refunds if they were owed to the person who died at the time of death.
In addition to the one-time death benefit, relatives may also be able to get ongoing benefits based on how much the person who died earned. Family members who were eligible could start getting these benefits the month after the winner died.
You may be able to get survivor benefits if you are a disabled spouse aged 50 or older, a spouse of any age who is looking for a child under 16 or with a disability of a deceased person.
Survivors of split spouses may also be able to apply if they meet certain requirements. In some cases, other family members, like children, stepchildren, grandkids, and even parents, may be able to get survivor benefits.
Children younger than 18 or up to 19 if they are still in school, as well as people with disabilities that started before age 22 may be able to get some help.
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