Social Security benefits are essential financial support, typically provided monthly to seniors during their retirement years and individuals living with disabilities. In addition, when a Social Security beneficiary passes away, their family members become eligible for survivor benefits, which include a lump sum death payment.
For decades, the lump sum death payment has remained unchanged at $255, a figure that has been constant since 1954. This amount, intended to aid families in times of loss, has not been adjusted to reflect the changing economic landscape.
Proposed increase to $2,900 for Social Security death benefit
Despite significant inflation affecting the cost of living for Americans, including essentials like groceries, housing, and healthcare, the lump sum payment has not increased. This financial strain extends to rising funeral costs, making the current payment insufficient for many families to cover death-related expenses. Lawmakers advocating for the Social Security Survivor Benefits Equity Act are highlighting this disparity.
- Rising Costs: Inflation has driven up prices across the board, impacting everyday living expenses.
- Funeral Expenses: The cost of funerals has surged, adding financial burdens to grieving families.
- Outdated Payment: The $255 payment, set in 1954, no longer meets today’s economic realities.
Legislative Efforts to Adjust Death Benefits
This week, a noteworthy proposal was introduced by Democratic Vermont Senator Peter Welch. The proposed law seeks to increase the death benefit to $2,900, ensuring it accurately reflects today’s inflation levels.
Support from Prominent Senators
Backing this initiative, Independent Senator Bernie Sanders from Vermont and Democratic Senator Elizabeth Warren from Massachusetts have joined forces to co-lead this important bill.
Concerns Over Rising Funeral Costs
Echoing the sentiments of many, Senator Welch emphasized, “Funeral costs should be the last concern for grieving families who have just lost a loved one.” He highlighted that, “Due to benefits not keeping up with inflation, the financial burden of burying a loved one has become a pressing issue for many mourning families.”
Back in the day, a full funeral and cremation service could be arranged for just $700 when the original $255 lump sum death payment was introduced. Fast forward to today, and the cost has soared to an average of $6,280, as reported by the National Funeral Directors Association.
The Rising Cost of Funerals
If you’re considering a funeral with a casket, be prepared for the expenses to climb even higher, averaging around $8,300.
The Need for Change
According to Thompson, there’s a strong likelihood that the proposed bill will pass. It’s been a staggering 70 years since any inflation adjustment was made to the death payment, which has remained unchanged since the 1950s.
“People often snicker at the amount provided by the Social Security death benefit,” Thompson noted. “It desperately needs an increase to keep up with inflation. This adjustment would offer substantial help to families during these challenging times, as they often struggle to gather funds to bury their loved ones.”
The Uncertain Future of the Social Security Death Benefit Bill
What Happens if the Bill Passes?
If this new bill is approved, the increased amount of $2,900 would take effect in 2025, adjusted according to the consumer price index for urban wage earners and clerical workers.
Eligibility for the Death Benefit
Currently, survivors can qualify for the death payment under specific conditions:
- You must apply within two years of your spouse’s or parent’s death.
- The benefit is generally awarded to a surviving spouse.
- If no surviving spouse is present, the benefit can be directed to the deceased person’s children.
When a loved one passes away, survivors often have the essential responsibility of notifying the Social Security Administration about the death. This action is crucial to prevent any unwarranted Social Security payments from being issued.