Social Security does not provide help with funeral costs. As of 2011, a surviving spouse or child may be eligible for a lump sum payment of $225 when a Social Security recipient dies, but the Social Security Administration reports that the payment cannot be made directly to funeral homes, and cannot be paid to the deceased's estate for funeral costs. Families needing help with funeral costs must seek sources other than Social Security.
Notifying Social Security
Social Security benefits stop when a person receiving the benefits dies. Funeral homes typically notify Social Security about deaths, and the Social Security Administration also expects a family member responsible for the affairs of the deceased to report the death. Social Security checks paid in the month of the person's death and not cashed should be returned to the agency. Continuing to receive and cash Social Security payments after a recipient's death is considered a crime.
A surviving spouse is eligible for a one-time payment of $255 -- if he or she meets certain qualifications. The surviving spouse must have been living with the beneficiary at the time of death, or if living elsewhere, must have been eligible for Social Security benefits based on the deceased's earnings. Payment can be made to a child if there is no surviving spouse. The child must be eligible for benefits based on the beneficiary's earnings.
Life insurance polices are usually used to pay for funeral expenses. However, MSN reports that as of 2010, 30 percent of Americans have no life insurance at all. Also, some people die without having turned over life insurance policies and other important papers to a trusted family member. As a result, life insurance policies sometimes cannot be located at the time of death, forcing the family to make other arrangements for paying for the funeral. Family members who cannot locate a policy should request bank records to identify payments that may have been made to an insurance company, or check with the deceased's former employers to determine if a policy taken out through the company is still active.
Local charitable organizations such as the United Way, Salvation Army and Urban League can offer a list of local resources for helping with funeral costs. These organizations will know about churches, individual donors and other local agencies that may be willing to contribute. This help is available only when the deceased left no assets behind and family members are unable or unwilling to help. Military veterans are eligible for burial and memorial benefits through the Department of Veterans Affairs, and some county governments will provide basic burial benefits for someone without resources.