November 28, 2023

Will you be ‘cheated’ out of your last Social Security check? 


Unlike many regular payments you make for which you would receive a prorated refund if you stopped service in the middle of a month, a person’s last Social Security benefit is an all-or-nothing proposition. To the surprise of surviving family members, this may mean that money disappears from a loved one’s bank account in the first few weeks after their death — or that it never shows up when expected. 

“It’s been a while since I’ve run into a case where that almost impoverished somebody,” says Devin Carroll, a Social Security expert who founded the blog Social Security Intelligence. “But when it did happen, there literally wasn’t enough money without that last Social Security check coming through to pay the bills.”

The confusion stems from the fact that the monthly Social Security check that the government pays is technically for the previous month — which means the money that lands in a person’s account in September, for example, is actually the payment for the month of August. Social Security rules state that a person must live for the entire month to claim the benefit for that month. So even if a person dies on the 31st day of the month at 11:50 p.m., they get no payment for that month. 

Carroll, who runs an active Facebook group devoted to Social Security issues, says there’s often a lot of consternation about this when people realize the rule. “Usually it’s about how unfair it is. Somebody will say, ‘My husband lived for 30 days in a month that was 31 days. That was our money,’” he says.

That feeling of being cheated can be exacerbated by the fact that Social Security will claw back any payments that went out as scheduled but were not due. The money will be in a bank account one day and gone the next, or Social Security will send a letter demanding the money be returned. 

“The whole issue of the payment in arrears is somewhat misunderstood. When you compound it with not receiving benefit in the month of death, it does cause confusion,” Carroll says. 

Why does the system work this way? There have been legislative proposals over the years to change the rules to pay for the month of death, or to at least prorate payments to the date of death. But none have progressed to become law, mostly because estimates, like one from the Social Security Administration, put the cost of paying the full month of death at $1.6 billion per year. Paying until the date of death would add $800 million per year.

Read: I’m 70 and am thinking of going back to work to qualify for Social Security. Should I?

Missing checks that are due

While you can’t do anything about a last payment that wasn’t due, you can put in a claim for missing money that a person who died was entitled to receive. It’s a much more rare circumstance, but sometimes a person is due a payment that never comes, and then the family or personal representative of the deceased needs to wrangle with Social Security to try to get the payment reissued to the heirs. 

“You do occasionally run into a missing check or back payment that’s due,” says John Ross, an elder-law attorney based in Texas. He had one client who had worked their way through the process of qualifying for Social Security disability payments and was due many months of benefits once the application was finally approved — but then the person died before a check came through. 

The only thing to do in such a case is file a form with your local Social Security office — SSA form 1724, otherwise known as the Claim For Amounts Due In The Case Of Deceased Beneficiary — and work through the process of claiming the money. It’s a deceptively simple form that belies a complicated process that can seem akin to throwing a piece of paper into a vast black hole. 

My family filed one of these after my mother died. She passed away at the beginning of a month but never got her benefit for the previous month because the bank shut down her account before the payment cleared. Six weeks into the process, we’re still waiting for any word from Social Security. Ross says he has seen people get payments issued through this process, but how long does it take? “That’s a whole other question,” he says. “If there’s a clear entitlement, it’s just a matter of running through the system. Six weeks? Three months? Something like that.”

Veterans, meanwhile, often have worse luck with a similar process for missing benefits from the Department of Veterans Affairs. “There’s a form for it, but I’ve never seen somebody get anything and you’ll never hear from them again,” Ross says. “Social Security will come around to it, particularly if there’s a surviving spouse.”

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