In addition to retirement benefits, Social Security provides a kind of life insurance with survivor’s benefits. When a worker dies, those who depended on the worker for support may be entitled to a monthly annuity or Social Security benefits paid each month for so long as the person qualifies. This includes a wife or husband, children, and in some cases, the ex-spouse and parents over the age of 62.
A spouse must be age 60 to receive survivor’s benefits, unless caring for a child of the deceased who is under the age of 16. A disabled child may be any age and receive survivor's benefits, if disabled before age 22. A well child can receive survivor's benefits if under 18 or 19 and in high school. A disabled spouse may be age 50 and collect survivor’s benefits if not remarried. A well spouse cannot remarry before age 60 and collect survivor’s benefits. If a spouse remarries and loses benefits, a child may still collect benefits while in the care of the spouse. Parents over 62 must show dependency on the deceased, and this must represent half of their support. An ex-spouse must have been married to the deceased for 10 years, unless caring for a minor child of the deceased worker.
If you believe you qualify, apply for survivor’s benefits at the first opportunity after the death of a worker. Survivor’s benefits are not necessarily retroactive to the death of the worker but are more likely to be retroactive to the date of application. A spouse may collect survivor’s benefits at age 60 and change over to personal retirement benefits if available when the surviving spouse reaches full retirement age. Workers born between 1943 and 1954 reach full retirement age at 66. This allows the recipient’s Social Security retirement funds to increase while still receiving some income based on the deceased’s record.
A spouse at age 60, or 50 if disabled, can receive 71.5 percent of the deceased worker’s benefit at full retirement age unless the worker took early retirement. If the deceased worker took early retirement, Social Security bases all percentages for survivor’s benefits on the early retirement benefit figure. A spouse caring for the deceased’s minor child gets 75 percent of the worker’s benefit and the minor child receives 75 percent.
A spouse who collects survivor’s benefits at age 60 faces a penalty for earned income in excess of $14,160, as of 2011. Social Security imposes a penalty of $1 for every $2 earned over the limit. The Internal Revenue Service taxes some Social Security survivor’s benefits for income over the threshold, starting at $25,000 for single filers. A spouse receives 100 percent of the deceased worker’s retirement benefit at the surviving spouse’s full retirement age, and incurs no penalties. Taxes continue for income over the threshold even past full retirement age.