When a person dies, there are countless arrangements to make and people and organizations to notify. Ensuring everything is handled properly and in a timely manner is challenging to begin with, but things are complicated even further by all the difficult emotions surrounding a loved one’s passing.

One aspect of managing a loved one’s final affairs and estate that most people aren’t familiar with is the handling of their last Social Security benefits check. Surviving family members often incorrectly assume that the estate is entitled to keep the beneficiary’s final payment or that it can be spent on things like funeral expenses. The truth is that a senior’s last check usually must be returned to the Social Security Administration (SSA).

Understanding the Timing of Social Security Payments

Social Security retirement benefits are paid in the month following the month for which they are due. For example, a senior’s January benefit is received in February, February’s benefit is direct-deposited in March and so on. It’s important to understand that the SSA only pays benefits for a specific month if the senior was alive for the entirety of that month.

For example, if your mom received her SS payment on April 10 and she passes away on April 29, then her estate is allowed to keep that check because it is actually payment for the month of March. However, if her next check is automatically direct-deposited in May, it will need to be returned. This is because the check is for the month of April, and the SSA does not pay benefits for the month of death.

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Notifying the Social Security Administration of a Beneficiary’s Death

The SSA should be notified immediately upon the passing of a beneficiary. Most funeral homes will take care of this on behalf of the surviving family if they provide the late beneficiary’s Social Security number. A death can also be reported by calling the SSA toll-free at 1-800-772-1213 between 7 AM and 7 PM Monday through Friday or by visiting a local Social Security office. While the SSA has made many features and services available on their website, it is not currently possible to report a death online.

Returning Final SS Payments

Prompt notification allows the SSA to cease paying benefits as soon as possible, minimizing the likelihood of confusion over whether a check must be returned or not. If the SSA does happen to make a payment for the month of a beneficiary’s death, it is crucial that it not be spent. If a deceased loved one received their benefits in check form, do not cash any checks for the month of their death or later.

If a late beneficiary had arranged for their payments to be directly deposited into a bank account, this can speed up the returns process significantly. Countless surviving family members have unknowingly spent these final payments and been caught off guard when the amount of the payment is automatically withdrawn from the direct deposit account and returned to the SSA by the financial institution. Keep in mind that the SSA does not prorate the beneficiary’s payment for the month of their death either.

Survivors Benefits

Reporting the death of a beneficiary is also an important step in determining if any surviving family members are entitled to benefits based on the beneficiary’s work history. In some cases, survivors benefits are not paid retroactively and a person must gather information and documents to apply, so don’t delay. For more information on survivors benefits, visit the SSA website.