Social Security benefits serve as vital financial support for millions of Americans, particularly seniors in retirement and individuals living with disabilities. But there’s another critical element that often gets overlooked: the Social Security death benefit.
When a Social Security beneficiary passes away, their surviving family members may be eligible for a lump sum death payment, intended to provide financial relief during a difficult time. However, this payment has remained stagnant at $255 since 1954, despite significant inflation and rising costs, particularly for funerals.
Now, lawmakers are pushing for a much-needed increase to $2,900, which would bring this benefit in line with today’s economic realities.
Outdated Lump Sum
For nearly 70 years, the death benefit has been frozen at $255, a figure that has not kept up with inflation. When this amount was first introduced, it was intended to help families cover the costs associated with burying a loved one. However, with the soaring prices of goods and services, this amount is no longer sufficient.
Rising Inflation
The primary reason for this proposed increase is the rising cost of living in America. Inflation has significantly affected essential expenses like groceries, housing, and healthcare, making it difficult for families to manage their daily budgets, let alone sudden funeral costs.
A funeral in the 1950s could be arranged for around $700, but in today’s economy, a basic funeral service, including cremation, costs an average of $6,280, according to the National Funeral Directors Association. For those opting for a traditional funeral with a casket, the cost skyrockets to an average of $8,300. Clearly, a $255 death benefit is a drop in the ocean when it comes to covering these expenses.
Legislative Efforts
Recognizing the need for an update, lawmakers are working to modernize the death benefit through the Social Security Survivor Benefits Equity Act. Leading this push is Senator Peter Welch from Vermont, who recently introduced a proposal to increase the benefit to $2,900. His efforts are supported by well-known figures such as Senator Bernie Sanders and Senator Elizabeth Warren, who are co-leading this legislative effort.
Senator Welch has highlighted the emotional and financial strain that families endure when a loved one passes away. “Funeral costs should be the last concern for grieving families,” he stated, acknowledging the growing financial burden due to inflation. This proposal seeks to ensure that the death benefit is adjusted to reflect modern-day costs, providing families with some degree of financial relief in their time of mourning.
Adjusting to Inflation
Inflation has affected nearly every aspect of American life, yet the Social Security death benefit remains untouched since the mid-20th century. To put this in perspective, the value of the dollar has drastically decreased since 1954, and the cost of basic services has surged. The proposed increase to $2,900 would finally bring this benefit in line with today’s economic conditions, offering more meaningful support to families in need.
If this proposal passes, the death benefit would be adjusted annually according to the consumer price index for urban wage earners and clerical workers, ensuring it keeps pace with inflation moving forward.
Current Eligibility
While lawmakers work to improve the amount provided, it’s essential to understand the current eligibility criteria for the death benefit:
- Application Deadline: You must apply for the death benefit within two years of the death of your spouse or parent.
- Surviving Spouse: Typically, the lump sum payment is made to the surviving spouse if they were living with the deceased at the time of death.
- Children: If no spouse is eligible, the payment may go to the deceased person’s surviving children.
When a loved one passes away, it’s also important to notify the Social Security Administration as soon as possible. This step is essential to prevent any overpayment of Social Security benefits, which would need to be repaid.
Impact of the New Bill
If passed, the Social Security Survivor Benefits Equity Act would introduce a much-needed adjustment to the lump sum death payment, raising it to $2,900 starting in 2025. This would not only help grieving families cover funeral expenses but also ensure that future payments keep up with the rising cost of living. With bipartisan support and growing public attention, there’s hope that this long-overdue change will provide families with financial stability during one of the most challenging times in their lives.
FAQs
Why has the Social Security death benefit not changed since 1954?
It has remained frozen at $255, untouched by inflation adjustments.
What is the proposed new amount for the death benefit?
The proposed increase would raise the death benefit to $2,900.
Who is eligible to receive the death benefit?
Surviving spouses or children may be eligible, depending on the circumstances.
When will the new death benefit take effect if passed?
If approved, the increased benefit will take effect in 2025.
How much does an average funeral cost today?
Funeral costs average $6,280 for cremation and $8,300 for a casket burial.
