Portfolio Perspective

Here's what happens to Social Security payments when you die

Key Points
  • The Social Security Administration should be notified as soon as possible after a beneficiary dies.
  • Depending on your relationship to the deceased, you may be entitled to benefits for survivors.
  • Using someone else's benefits after they die is a federal crime, whether the death was reported or not.
Hector Pertuz | iStock | Getty Images

If you're handling the financial affairs for an older person who has died, you may wonder how the government knows to stop sending Social Security payments.

Or maybe there's a surviving spouse or dependent who is hoping those benefits can continue.

Although Social Security rules can be complicated, the bottom line is that a person's benefits end at death. And for survivors, whether you qualify depends on several factors.

Here's what to know.

Where to start

It's important for the Social Security Administration to be alerted as soon as possible after the person dies.

In most cases, funeral homes notify the government. There's a form available that those businesses use to report the death.

"The person serving as executor [of the estate] or the surviving spouse can also call Social Security," said certified financial planner Peggy Sherman, a lead advisor at Briaud Financial Advisors in College Station, Texas.

Whoever does the reporting should be armed with the decedent's Social Security number.

When payments stop

Be aware that a person is due no Social Security benefits for the month of their death.

"Any benefit that's paid after the month of the person's death needs to be refunded," Sherman said.

With Social Security, each payment received represents the previous month's benefits. So if a person dies in August, the check for that month — which would be paid in September — would need to be returned if received.

If the payment is made by direct deposit, the bank holding the account should be notified so it can return benefits that shouldn't have been delivered.

It may be no surprise that using someone else's benefits after they die is a federal crime, regardless of whether the death was reported or not.

If the SSA receives notice that fraud might be happening, the allegation is reviewed and potentially will warrant a criminal investigation. To combat duplicity, the agency matches records with other government entities to identify unreported deaths.

Benefits for survivors

If a spouse or qualifying dependent already was receiving money based on the deceased's record, the benefit will auto-convert to survivors benefits when the government gets notice of the death, Sherman said.

"For all other cases, the surviving spouse will need to call Social Security and schedule an appointment to apply for survivors benefits," Sherman said. "You cannot do this online."

If the widow or widower has reached their own full retirement age, they can get their deceased spouse's full benefit, Sherman said. They can apply for reduced benefits as early as age 60 (or, generally, age 50 if disabled), in contrast to the standard earliest claiming age of 62.

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Meanwhile, if the survivor qualifies for Social Security on their own record, they can switch to their own benefit anytime between ages 62 and 70 if that payment would be more.

An ex-spouse of the decedent also might be able to claim benefits, as long as they meet some specific qualifications.

For minor children of a person who died, benefits also may be available, as well as to a surviving spouse who is caring for the kids.

Finally, upon the death of a Social Security recipient, a surviving spouse (or child) is generally given a lump sum payment of $255.