Social Security Benefits After Death - Who Gets What When Someone Dies
Today's column discusses two separate but related topics involving Social Security benefits due after someone dies. The first question deals with a circumstance I've covered many times, but bears repeating.
Q: My wife died Sept. 29, 2013. In other words, she was alive almost the entire month of September. And yet I wasn't allowed to keep her Social Security check that came just a week or so after she died. Can you justify this in any way?
A: I'm not sure I can "justify" it, but I can explain what the law and Social Security rules say.
You are probably aware that Social Security checks are paid one month in arrears. In other words, the check that comes in November is the payment for October. And in your wife's case, the check that came in October was the Social Security payment for September.
You may not be aware that the law says a person must be alive the entire month (and that means every day, every hour, every minute and every second of the month) to be eligible for the check for that month. Because your wife died on Sept. 29, she was not alive the entire month. Therefore, I'm sorry, but she (and now in turn you) are just not due any of the proceeds of her September Social Security check.
In other words, Social Security checks are not pro-rated. But as I've pointed out before in this column, although that may be bad news after you are gone, it's good news when you first sign up for Social Security. For example, if you are 66 years old on Sept. 29 and want your benefits to begin effective with age 66, you will get a check for the entire month of September, even though you are only 66 for two days in the month. (Note: This rule does NOT apply if you take benefits at age 62. The law says you must be 62 for an entire month before you can get a Social Security benefit for that month.)
Q: My husband passed away Oct. 5, 2013. Our Social Security checks go into the bank the second Wednesday of each month, in this case Oct. 9. I called Social Security and was told quite clearly that I would receive his check in October but not in November. I thought all was well until this week when I went to the bank to get some cash and was told they could not honor my request due to an overdrawn balance. I discovered that my husband's Social Security check had been deposited but then had been sent back, leaving my account short almost $1,500. I was told that is standard practice.
My problem is that no one told me this would happen -- not the Social Security people and not the bank. After a couple more contacts with the Social Security office, they had me send in a form to request the amount be returned and that will take at least 6 weeks. And to add insult to injury, the bank is charging me overdraft fees!
Am I missing something? Why didn't anyone tell me this would happen? And why wasn't anyone the least bit sympathetic?
A: You certainly have my sympathies. Although your husband's Social Security payment was properly returned, your case could have been handled with much more compassionate by both the Social Security Administration and the bank.
Actually, there are three players involved in your case: the Social Security Administration (obviously because it's a Social Security benefit), the Treasury Department (they are the ones who issue the payment) and the bank.
The Treasury Department correctly recalled the payment. Although your husband was technically due the October check, which is the payment for September (and he was alive the whole month of September), the law says that if a government check -- Social Security or any other kind -- is issued after someone dies, then the payment must be returned to the Treasury. Or to clarify that some more: The Treasury Department doesn't know that someone (in this case, you) is due the proceeds of that Social Security check. All they know is that a government check was sent to someone who died before its official date of issue. So the Treasury Department did its job by asking the bank to return the funds.
But the Social Security people didn't do a very good job explaining all of this to you. They should have told you that the payment sent in your husband's name has to be returned. Then they should have explained that you are due the proceeds of that check, but that it has to be reissued in your name. They should have helped you fill out the form to do that the first time you contacted them. And they should have helped you file for the one time Social Security death benefit. If you haven't done the latter, make sure you get back to the Social Security office right away to do so. Or you can call them at 800-772-1213.
As I said, the third player in this little drama is the bank. And in my opinion, they should show you a little kindness and not impose any overdraft fees. If they insist on doing so, I would switch banks tomorrow!
If you have a Social Security question, Tom Margenau has the answer. Contact him at firstname.lastname@example.org.
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