Social Security Lump Sum Death Payment Overview
If you're insured by Social Security when you die, your surviving family members may be eligible for a one-time lump-sum death payment of $255.00. While $255.00 may not seem like much, it may help cover some of your family's expenses during a difficult time if you can't rely on a life insurance amount. Read on to learn about the history of the lump-sum death benefit and how your family may be eligible for this benefit payment.
What Is a Lump-Sum Death Payment?
The lump-sum death payment was once linked to burial expenses and is often still referred to as a "burial benefit."
In the early history of the Social Security system, survivors benefits weren't part of the program. Instead, the program paid a lump-sum benefit to the surviving family of the deceased worker (wage earner) following the worker's death before full retirement age.
The lump-sum death payment benefit has evolved through the years. The federal government added survivors benefits in 1939. But the government retained a limited version of the lump-sum death payment. This version paid the lump-sum death payment only when the wage earner did not have payable Social Security survivors benefits.
The 1950s saw an expansion of eligibility to include payment of the lump-sum death payment together with survivor benefits. The purpose of this expansion was so families of wage earners wouldn't have to use survivors benefits to cover burial expenses.
Title II (Federal Old Age, Survivors, and Disability Insurance, OASDI) of the Social Security Act, as amended, is the authority under which eligible individuals may apply for the lump-sum death payment. The OASDI trust fund paid out approximately $226 million in lump-sum death payments in 2020. However, this represents only 0.02% of all OASDI benefit payments. Most deaths do not result in a payment.
Eligibility for Payment
The lump-sum death payment is payable to certain family members of the wage earner. The family members also must meet certain eligibility requirements before payment:
A surviving spouse living with the wage earner at the time of death is entitled to the one-time lump-sum death payment.
If the surviving spouse lived apart from the wage earner at the time of death, the wage earner's spouse may still be eligible for the spouse benefit. However, there are two conditions: either the wage earner's spouse must have been receiving certain Social Security benefits on the wage earner's earnings record or have become eligible for survivors benefits.
If the wage earner did not have a surviving spouse, the lump-sum payment may be available to a wage earner's dependent children, if any. But the children must receive or be eligible for monthly benefits under the wage earner's record. If the wage earner has multiple eligible children who are qualifying Social Security beneficiaries, the payment is divided evenly among them.
Neither the Surviving Spouse nor Children Qualify
If the wage earner's surviving spouse or children doesn't receive benefits, they must apply for the lump-sum death payment within two years of the wage earner's death. The wage earner's family has the responsibility to notify the Social Security Administration (SSA) as soon as possible after the wage earner's death. To do so, the family may contact their local Social Security Office.
Information Needed to Apply
You may be required to show the following documents to determine eligibility when applying for a lump-sum death payment:
- Birth certificate or other proof of birth
- Proof of U.S. citizenship or lawful alien status
- U.S. military discharge papers
- W-2 forms and/or self-employment tax returns
- Wage earner's death certificate
The Social Security Administration may also require the following information:
- Social Security numbers of the wage earner and their survivors
- Whether the wage earner ever filed for Social Security benefits, Medicare, or Supplemental Security Income (SSI), sometimes called “disability benefits" or "social security disability"
- Whether the wage earner was unable to work because of illness, injuries, or other conditions
- Whether the wage earner was ever in active military service or worked for the railroad industry
- Whether the wage earner earned Social Security credits under another country's social security system
- Names and Social Security numbers of any of the wage earner's former or divorced spouses and dates of marriages
- Names of any of the wage earner's unmarried children and dependent grandchildren under 18, 18-19 and in secondary school, or age 18 or older who became disabled prior to age 22. This includes stepchildren and adopted children
- Amount of the wage earner's earnings in the year of death and the year before death
- Whether the wage earner had a dependent parent who looked to the wage earner for half of their support
Frequently Asked Questions
You may have other questions about lump-sum death payments. Here are some frequently asked questions about the benefit:
- Q: Is the Lump Sum Death Payment subject to taxes? A: No, the lump-sum death payment is not generally subject to federal income tax. This is good news since the value of the benefit has reduced over time due to inflation. Therefore, it's a benefit to surviving family members that the IRS doesn't consider the payment taxable income, which would further erode its value.
- Q: What happens if the deceased person has unpaid debts? A: To establish eligibility for this program, the Social Security Administration may check records to establish or verify delinquent debts under federal benefit programs.
- Q: What happens if the deceased received monthly Social Security benefits? A: The eligible family must return to the SSA any Social Security benefits the deceased received. This includes benefit amounts received for the month of death and any later months.
- Q: Can I receive the Lump Sum Death Payment if I am not a U.S. citizen? A: No, you must be a U.S. Citizen or have lawful alien status.
Need Help Applying for Benefits?
You may apply for benefits by contacting or visiting your local Social Security office. You can also find the lump-sum death payment application form online at www.ssa.gov. This form allows you to input bank account information for direct deposit of the lump-sum death payment.
If you'd like more information about this topic or help with filing an application for this benefit, you may want to consult with a full-time Social Security attorney. They may also be able to answer your questions on other Social Security-related topics, including Social Security taxes, retirement benefits, and your general retirement plan. They may also be able to advise you on retiree's health insurance premiums or health care premiums under Social Security programs.
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