The Social Security Administration pays survivor benefits to children of eligible deceased workers. The surviving parent or a legal guardian usually manages the child’s funds. The Social Security Administration also appoints payment representatives when the child doesn’t have a surviving parent, guardian or suitable relative. Certain organizations can become payment representatives for children in their care.
According to the SSA, recent rule changes eliminate the annual expense accounting requirement for widows or widowers who receive survivor benefits for children in their household. The latest rules apply to natural and adoptive parents, legal guardians and some other qualifying relatives. However, SSA recommends that you keep records of expenditures you make on behalf of a child beneficiary.
Child Benefits Application
Getting your child’s SSA survivor benefits isn’t automatic. Although most funeral homes report all deaths to the SSA, the SSA provides survivor benefits only after you complete an application for your child.
The SSA only accepts survivor applications at one of their field offices or by calling 1-800-772-1213. SSA pays this benefit for your unmarried child under age 18 or age 19 for children who are full-time students in secondary or elementary school. The children of eligible workers who became disabled before age 22 also qualify for child survivor benefits.
As a surviving parent or legal guardian of the child, you must submit your application for the SSA lump-sum death benefit within two years of the death of the eligible parent.
Surviving Spouse Benefits
Surviving spouses who are caring for a child survivor also receive benefit payments when the SSA processes their child’s application. The SSA decides spouse and child benefits using a formula based on the deceased worker’s maximum benefit at full retirement age. When SSA processes your survivor application, it also sets a household maximum benefit amount.
The total monthly household survivor’s benefits from the SSA for you and your surviving children cannot exceed 150 to 180 percent of your spouse’s retirement benefit maximum. To keep your total family benefit within the allowable range, SSA will reduce each eligible child’s monthly benefit amount, but not your surviving parent benefit amount.
Child Survivor Representative Payees Responsibilities
Grandparents, stepparents, other relatives and family friends can apply on behalf of a surviving child when no surviving parent applies for their benefits. SSA then decides if you are eligible to manage the surviving child’s benefits. In these cases, the SSA might appoint you as the representative payee for the child. This allows you to manage the child’s benefits and make expenditures for their care.
Representative payees for children need to set up a separate bank account for receipt of the child’s SSA benefit funds. You cannot use funds from the child’s account to pay your own expenses. The SSA’s guidelines also state that child survivor representative payees cannot receive any payment from the SSA or the surviving child for being their representative without SSA approval.
Each month that you receive benefits for the child, you can withdraw funds or make payments for specific categories of expenses. The primary categories are shelter, food, clothing, medical care and dental services. Allowable expenses also include personal care items and services such as hairdressing. The SSA requires payee representatives to deposit any unused funds into a savings account in the child’s name monthly, and you must also report these expenditures to the SSA every year and if requested during the year.
Carol Luther has published feature articles in print magazines, ghostwritten blogs, and produced digital content since 2007. She has published personal finance and small business articles for the Houston Chronicle, Mahalo, the Nest, USA Today, Wahm, and Zacks. Carol has designed, implemented and managed multi-year, multimillion-dollar domestic and international projects services for higher education, nonprofits, and small to medium businesses for more than 20 years.