Social Security Survivor's Benefits

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As Americans, we work hard to provide a life for our families. As soon as we enter the work force we pay taxes to help make our country better and to create a basic retirement plan for ourselves. Social Security is meant to be a guaranteed retirement program, so hard working Americans across the country can support themselves after they have earned the right to retire. But what happens if that person dies before retirement? Where does all that money go? In these unfortunate cases, Social Security can act as a sort of life insurance for the surviving spouse and children. Losing a husband or wife can be devastating enough, let alone having to worry about earning enough money to keep a roof over your head or food on the table. Social Security Survivor's Benefits make sure that the families of hard working Americans are supported even after their loved one has passed on. 

Social Security has been around since the 1930's as a response to the economic downturn and widespread poverty, especially among the elderly, as a result of the Great Depression. It acts as a federal entitlement program in the United States, where individuals who meet certain criteria are entitled by law to receive certain benefits. There have been several amendments to Social Security made, mostly in the 1960s and 70s. Social Security was designed to lower the overall poverty rate of post-retirement individuals and to help combat the effects of ageism in the work place. Older adults are often seen as senile, infantile, and useless and are therefore discriminated against when it comes to getting jobs. Without some source of income, many elderly individuals would not be able to care for themselves and meet basic needs. The theory is that a person pays into Social Security their entire life so that they can have a guaranteed retirement plan, which is especially helpful if their job doesn't offer one or they are intentionally laid off just before they hit retirement age. But this money from Social Security can also come in handy for disabled workers or families of the deceased. If a person dies before they retire or after they retire and still have Social Security benefits left, then the surviving spouse and/or children may receive some of the money that their loved one worked so hard for over the years. 

 If the deceased has worked long enough and contributed enough to Social Security, their surviving family may be entitled to some benefits. Some of these benefits include the spouse receiving a payment on a one-time basis, so long as the spouse was living with the deceased or was at least receiving certain benefits under the deceased. In the absence of a spouse, the child becomes eligible for the benefits (Social Security Administration, 2015, p. 5). There are monthly benefits available for certain members of the deceased's family; any widows or widowers who are 60 years or older, or age 50 if they are disabled, any surviving spouse who is caring for a child of the deceased who is under the age of 16 and disabled, unmarried children of the deceased who are under the age of 18 (19 years of age in certain circumstances), any child 18 years of age or older who was diagnosed with a disability before age 22, stepchildren, grandchildren, or adopted children in certain circumstances, any dependent parents of the deceased over the age of 62, and in special circumstances, divorced spouses (Social Security Administration, 2009, p. 1).

So what are the benefits that your family will receive if you pass on? According to the Social Security Administration in 2015, "How much your family can get from Social Security depends on your average lifetime earnings. The more you earned, the more their benefits will be" (p. 6). Once the death has been reported to the Social Security Administration, the process for receiving benefits can begin. A one-time payment of $255 can be paid to qualifying survivors, but the amount is dependent on how long the deceased worked and paid into the program (Social Security Administration, 2015, p. 6). The amount of the following payments is also determined by how long the deceased worked, and by the survivor's relationship to the deceased, but the maximum amount that can be paid is around 150-180% of the deceased's total benefits (Social Security Administration, 2015, p. 9). Surviving children, or spouses with children under the age of 16 will receive 75% of the deceased's benefits, while widows or widowers who are under retirement age generally receive somewhere between 71-99% (Social Security Administration, 2015, p. 9). The only group that receives the full amount of the deceased's benefits are widows or widowers who are at full retirement age at the time of their spouses death or at the time of application for Survivor's Benefits (Social Security Administration, 2015, p. 8). There are several resources available for an individual to check to see what benefits they would be leaving behind for their families. 

Social Security is a publicly funded program through the government. The funding comes from a mandatory tax on income, up to $118,500 (Office of Retirement and Disability Policy, 2015, p. 1). Fortunately, there has always been a surplus created by Social Security, so on its own it would provide all the funding necessary for the payment of benefits. Unfortunately, the government continues to borrow from this surplus instead of simply investing all of it into Treasury bonds. This lack of responsibility and long-sightedness could potentially lead to cutting of the program to fill the government budget deficit. 

 While the theory of Social Security may seem like a simple idea, the practical application is much more complicated. Social Security on the whole is meant to be a supplement to private retirement plans and personal savings. But in recent years, it has become more difficult for individuals to save money, especially with the decrease in companies offering private pensions or guaranteed retirement plans. And since Social Security benefits are only meant to be supplemental, they are often not enough to cover basic needs, particularly for families. Another aspect that can make receiving these benefits is the red tape surrounding the application process. The last thing anyone wants to do when a loved one has passed on is deal with filing an application through the government. To apply, survivors will need birth certificates, death certificates, Social Security cards, W-2 forms for the deceased, marriage certificates, and bank account numbers (Social Security Administration, 2015, pp. 7-8). And Social Security benefits alone are not able to sustain families above the poverty line. So if the deceased was the sole breadwinner for the family, the survivors then have to make do with a fraction of the income they previously had. However, if the surviving family is simply a spouse who also receives Social Security Benefits, they may be able to get by slightly easier with this supplemental benefit. 

All told, Social Security is a great supplemental retirement and life insurance program, but it is just that: supplemental. For the surviving spouses and children of the deceased, this supplemental income may not be enough to sustain them. Children particularly who may be in high school or going through college that have lost a source of income may now be solely reliant on a portion of their deceased parent's benefits. While the program is better than nothing, it should not be entirely relied upon by surviving loved ones as a practical life insurance program.

References

Office of Retirement and Disability Policy (2015). OASDI and SSI program rates & limits.Retrieved from http://www.ssa.gov/policy/docs/quickfacts/prog_highlights/RatesLimits2015.pdf

Social Security Administration (2009). How Social Security can help you when a family memberdies. Retrieved from http://www.ssa.gov/pubs/EN-05-10008.pdf

Social Security Administration (2015). Survivors Benefits. Retrieved from http://www.ssa.gov/ubs/EN-05-10084.pdf