A new bill making its way through Congress could significantly impact Social Security beneficiaries, particularly those who rely on survivor benefits. If passed, the legislation would increase the one-time death benefit from $255, a figure unchanged since 1954, to $2,900. This would bring the lump sum closer to reflecting today’s inflation-adjusted expenses, such as funeral costs, which have dramatically risen over the past several decades.
The Stagnation of the Death Benefit
Social Security provides a range of benefits, including monthly payments to disabled individuals and retirees, as well as a one-time lump sum death benefit for surviving family members. The lump sum has been set at $255 since 1954, a time when the cost of living and funeral expenses were much lower. Since then, the price of essential goods and services, including housing, medical care, and funeral services, has skyrocketed, making the fixed death benefit increasingly inadequate.
According to the National Funeral Directors Association, the average cost of a full funeral service with cremation is now $6,280. A traditional funeral with a casket can be as high as $8,300. This gap highlights the insufficiency of the $255 benefit in covering even a fraction of funeral-related expenses.
The Proposed Legislation
Democratic Senator Peter Welch of Vermont introduced the Social Security Survivor Benefits Equity Act, with co-sponsors independent Senator Bernie Sanders and Democratic Senator Elizabeth Warren. The bill proposes increasing the lump sum to $2,900, aligning the benefit with inflation over the past 70 years. This increase would provide much-needed financial relief for families struggling with funeral costs during already difficult times.
Kevin Thompson, CEO of 9i Capital Group, emphasized the importance of this bill, stating it would help cover the typical costs associated with a funeral and bring the death benefit in line with current economic conditions. He described the existing $255 payment as laughable, given the current state of inflation.
Senator Welch echoed these sentiments, noting that the cost of burying a loved one should not be an added burden for grieving families. He pointed out that this increase would help ensure that families aren’t left with an overwhelming financial burden in their time of grief.
The Challenges Facing the Bill
While the bill has garnered attention, its passage is far from certain. Joseph Patrick Roop, president of Belmont Capital Advisors, expressed skepticism, noting that while there is interest in increasing the Social Security death benefit, financial and political hurdles remain. Social Security itself has been the subject of ongoing debate, with many concerned about the long-term viability of the program. As a result, proposals to expand or modify benefits frequently face resistance in Congress.
If the bill is passed, the increase to $2,900 would become effective in 2025, with the adjustment based on the Consumer Price Index for urban wage earners and clerical workers.
Who Is Eligible for Survivor Benefits?
Surviving family members of a deceased Social Security recipient can qualify for the death benefit, provided they meet specific requirements. The payment is typically issued to the surviving spouse, though children or other family members may receive it if there is no surviving spouse.
To qualify for this benefit, family members must apply within two years of the death. Survivor benefits are not limited to the lump sum payment; spouses aged 60 or older, disabled spouses aged 50 or older, and spouses caring for the deceased’s child can receive monthly benefits. Children under 18, or older if disabled, may also qualify.
Additionally, in certain situations, parents, stepchildren, and even grandchildren of the deceased can qualify if they depended on the individual for at least half of their financial support.
The Long-Term Impact of the Proposed Change
The proposed increase to the death benefit would undoubtedly provide greater financial security for survivors. However, some experts believe that even a $2,900 lump sum is still insufficient, given today’s funeral costs. Nevertheless, it would be a considerable improvement over the current $255.
How long has the Social Security death benefit been $255?
The death benefit has been set at $255 since 1954 and has not been adjusted for inflation since then.
What is the Social Security Survivor Benefits Equity Act?
This proposed legislation would increase the one-time death benefit from $255 to $2,900 to better reflect today’s economic conditions.
Who is eligible for Social Security survivor benefits?
Eligible recipients include spouses aged 60 or older, spouses with disabilities aged 50 or older, children under 18 (or older if disabled), and sometimes parents or grandchildren if they relied on the deceased for financial support.
