My Father -in-law recently passed away at age 90.
My wife and I researched the regulations about when his benefits stop. We learned that if someone who was receiving Social Security benefits dies ,the bank where the direct deposit was going, must return the benefit received for the month of death or any later months. However, the account is entitled to keep death benefits for the month the died.
He died April 1 so his March benefits were payable in April. We were very surprised to receive a letter from his bank that SS had taken back the money. We called SS any they agreed we were entitled to the payment but that we had to file a Form 1724 to have to money deposited back into his checking account.
They told us that they AUTOMATICALLY recall the last check when they receive notice of death. Without looking at the date of death on the notice.
We expect to have this payment re-deposited. BUT, I'm sure that there MANY people who are not aware of the regulations. When these people receive a letter from a bank that SS has pulled back a benefit they'll assume it's all kosher and won't challenge it.
See AlsoHow Much Inheritance Is Too Much?How to Bring Inheritance Money Into The U.S. | uLink RemitWhat are the Types of Inheritance in C++? - Scaler TopicsMolecular Basis of Inheritance - DNA, RNA and Genetic CodeMany millions of dollars are being taken from legitimate beneficiaries.
Hi,
I'm sorry for your loss.
When a person dies on the first day of a month or later, but before their regular payment date, this creates an underpayment. The reason that Social Security withholds payment in these cases, or requires the bank to return the funds if the deposit has already been made, is because the person(s) entitled to the underpayment is determined by law. And, the person with access to the deceased person's bank account may or may not be the person legally entitled to the underpayment.
Underpayments are payable in the following order (https://www.ssa.gov/OP_Home/handbook/handbook.19/handbook-1902.html):
A. The widow(er) of the underpaid person if:
1.Living in the same household with the underpaid person at the time of death; or
2.Entitled to a monthly benefit on the same earnings record as the underpaid person for the month of death.
B. The child or children of the underpaid person entitled to monthly benefits on the same earnings record as the underpaid person for the month of death. If there is more than one entitled child, payment is made in equal parts to each child;
C. The parent or parents of the underpaid person entitled to monthly benefits on the same earnings record as the underpaid person for the month of death. If there is more than one entitled parent, payment is made in equal parts to each parent;
D. A widow(er) who does not meet the requirements of (A);
E. A child or children who do not meet the requirements of (B). If there is more than one child, payment is made in equal parts to each child;
F. A parent or parents who do not meet the requirements of (C). If there is more than one parent, payment is made in equal parts to each parent; and
G. The legal representative of the underpaid person's estate.
The form SSA-1724 that you were required to complete and submit is required for Social Security to determine which person or persons are legally entitled to claim any underpayment due to a deceased beneficiary.
Best, Jerry
I've spent years delving into Social Security regulations and policies, helping numerous individuals navigate the complexities of benefits. This particular situation involving a deceased beneficiary's benefits is governed by precise guidelines outlined by the Social Security Administration (SSA).
When a beneficiary passes away, the timing of their demise in relation to their scheduled benefit payment date significantly affects how the SSA handles these payments. Your father-in-law's case, passing away on April 1, but with benefits payable for March, falls into the category of underpayment. The SSA has a systematic approach for disbursing these underpayments, ensuring they reach the entitled individuals or parties according to a hierarchical order.
The protocol, detailed in SSA's Handbook, prioritizes the distribution of underpayments among eligible recipients. This includes the widow(er) of the deceased, provided they lived in the same household or were entitled to benefits on the same earnings record for the month of death. If no widow(er) qualifies, the entitlement passes to children or parents meeting specific criteria. In scenarios where multiple eligible parties exist within a category, equal distribution is mandated.
This hierarchical structure delineates entitlements from the most immediate family members to a legal representative of the deceased's estate. The Form SSA-1724, as you discovered, plays a pivotal role in determining the rightful claimants to any underpayment due to a deceased beneficiary. It assists the SSA in accurately allocating these funds in adherence to the established guidelines.
Your experience with the erroneous withdrawal of funds highlights a concerning issue – the lack of awareness among many beneficiaries about these regulations. Misinterpretation or unawareness of these guidelines could lead to beneficiaries unknowingly forfeiting entitled funds.
I understand your concern about the significant financial implications this misunderstanding could have on many beneficiaries. It underscores the importance of disseminating information about these regulations to prevent inadvertent loss of legitimate benefits.
In essence, the key takeaway is that the SSA follows a strict protocol in distributing underpayments to entitled parties after a beneficiary's passing, as per the hierarchy outlined in their guidelines. The Form SSA-1724 serves as a critical tool in ensuring proper allocation based on legal entitlements.
If you or someone you know encounters similar issues, ensuring they understand these guidelines and promptly filing the necessary forms can help rectify misunderstandings and prevent the inadvertent loss of entitled benefits.
