- Pension Survivors Benefits Effect on Social Security Benefits
- Do Children Collecting Their Dead Parents' Social Security Pay Income Taxes?
- The Benefits of Social Security Disability When a Spouse Dies
- Can Social Security Benefits Be Paid for a Stepchild After the Stepparent Dies?
- Can Someone Collect Survivors Benefits From Their Grandparents?
- Tax Implications of Social Security Death Benefits for Children
Social Security Survivors benefits are paid out on a monthly basis. Over 4.3 million widows or widowers received survivors benefits in 2011, according to the Social Security Administration. There is a one-time lump sum death benefit, payable to a spouse or children of a deceased person who qualified for Social Security. The amount of this benefit is $255.
Does the Spouse Receive the Lump-Sum Benefit?
The lump sum death benefit is paid to the surviving spouse in most circumstances. For example, if a wife was living with her deceased husband at the time of his death, she would receive the lump-sum benefit. If she was living apart from her husband at the time of his death, she had to be receiving Social Security benefits on his record to be eligible for the lump-sum benefit.
How Can Children Receive the Lump-Sum Benefit?
If there is no spouse to claim the lump-sum benefit, the minor children of the deceased worker may be eligible to receive it. For the minor children to qualify, they must be receiving Social Security benefits on the deceased worker’s record during the month of death, or be eligible to.
The one-time lump sum death benefit is only payable to a spouse or to the minor children of the deceased Social Security qualifier. If there is no eligible child or spouse, the death benefit is not paid out. This benefit cannot be paid to the estate of the deceased or to a funeral home to cover funeral expenses. Those who are eligible to claim this lump sum benefit has until the second anniversary of the worker’s death to apply for it.
Does This Amount Affect Survivors Benefits?
The lump-sum death benefit is added to the rest of a beneficiary survivor's benefit totals for taxation purposes. This means that the added benefit can affect whether a survivor's benefits become taxable compensation. If a person’s Social Security benefit totals plus any other taxable income, such as wages or interest income, exceed $25,000 per year, up to 50 percent of the Social Security benefits are taxed at normal income tax rates. Up to 85 percent of benefits are taxed if the total income tops $34,000. If beneficiaries are married, the lump-sum benefits added to the household incomes can cause their benefits to be taxed as well. Up to 50 percent of their Social Security benefits are taxed if their combined household incomes surpass $32,000, and up to 85 percent if their incomes exceed $44,000 (see Reference 4).
- Social Security Administration: Congressional Statistics, December 2001
- Social Security Administration: Lump-sum death benefit
- Social Security Administration: Survivors Planner: A Special Lump Sum Death Benefit
- Social Security Administration: Benefits Planner: Income Taxes And Your Social Security Benefits