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Unlike many regular payments you make that would be due a prorated refund if you stop service in the middle of a month, a person’s last Social Security benefit is an all-or-nothing proposition. To the surprise of surviving family members, this may mean that money disappears from a loved one’s bank account in the first few weeks after their death, or never shows up when expected.
“It’s been a while since I’ve run into a case where that almost impoverished somebody,” says Devin Carroll, a Social Security expert who founded the blog Social Security Intelligence. “But when it did happen, there literally wasn’t enough money without that last Social Security check coming through to pay the bills.”
The confusion stems from the fact that the monthly Social Security check that the government pays is technically for the month prior – so the money that lands in a person’s account in September is actually the payment for the month of August, and so forth throughout the year. Social Security rules state that a person must live for the entire month to claim the benefit for that month. So even if a person dies on the 31st day of a month at 11:50 p.m., it’s an insurmountable cliff and they get no payment for that month.
Carroll, who runs an active Facebook group on Social Security issues, says there’s often a lot of consternation about this when people realize the rule. “Usually it’s about how unfair it is. Somebody will say, ‘My husband lived for 30 days in a month that was 31 days. That was our money,” he says.
The feeling of being “cheated” is exacerbated by the fact that Social Security will claw back any payments that went out as scheduled but were not due. The money will be in a bank account one day and gone the next, or Social Security will send a letter demanding the money be returned.
“The whole issue of the payment in arrears is somewhat misunderstood. When you compound it with not receiving benefit in the month of death, it does cause confusion,” says Carroll.
Why does the system work this way? There have been legislative proposals throughout the years to change the rules to pay for the month of death, or to at least prorate payments to the date of death. But none have progressed to be law, mostly because estimates, like one from the Social Security Administration, put the cost of paying the full month of death at $1.6 billion per year. Paying just until the date of death would add $800 million per year.
Read: I’m 70 and am thinking of going back to work to qualify for Social Security. Should I?
Missing checks that are due
While you can’t do anything about getting a last payment that wasn’t due, you can put in a claim for missing money that the deceased was entitled to receive. It’s a much more rare circumstance, but sometimes a person is due a payment that never comes, and then the family or personal representative of the deceased needs to wrangle with Social Security to try to get the payment reissued to the heirs.
“You do occasionally run into a missing check or back payment that’s due,” says John Ross, an elder law attorney based in Texas. He had one client who clawed through the process of qualifying for Social Security disability payments and was due many months of benefits once the application was finally approved. But then the person died before a check came through.
The only thing to do is file a form with your local Social Security office and work through the process of claiming the money – SSA form 1724, otherwise known as the Claim For Amounts Due In The Case Of Deceased Beneficiary. It’s a deceptively simple form that belies a complicated process that can seem akin to throwing a piece of paper into a vast black hole.
My family filed one of these after my mother died, because she passed at the beginning of a month but never got her benefit for the previous month because the bank shut down her account before it cleared. Six weeks into the process, we’re still waiting for any word from Social Security. Ross says he has seen people able to get payments issued through this process, but when? “That’s a whole other question,” he says. “If there’s a clear entitlement, it’s just a matter of running through the system. Six weeks? Three months? Something like that.”
On the other hand, veterans have worse luck with a similar process for missing benefits with the Department of Veterans Affairs. “There’s a form for it, but I’ve never seen somebody get anything and you’ll never hear from them again,” Ross says. “Social Security will come around to it, particularly if there’s a surviving spouse.”
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