What happens to Social Security after someone passes away?

Losing a loved one is overwhelming, and dealing with Social Security only adds to the stress.

Normally, the funeral home will request the Social Security number of your deceased loved one. They then report that to the government so you don’t have to.

Sometimes people fail to give the funeral home the needed information. You must report the death to the Social Security Administration (SSA). Failing to report a death can lead to serious consequences. You may have read about the rogue son colleting on his long-dead mother’s Social Security account. Well, he spent six months in federal prison.

If a family does not report the death of a Social Security recipient and the funeral home doesn’t notify the SSA, benefits will keep being deposited. This is not free money – it’s a mistake, and the government will eventually demand repayment. If someone knowingly continues to collect these payments, it could even be considered fraud. The SSA has systems in place to catch unreported deaths, and when they do, they’ll come looking for the money.

You must be alive the entire month to be able to keep your monthly Social Security check. When your spouse dies on the last day of the month and the direct deposit comes into your joint bank account, do not spend it! It will be clawed back.

On the other hand, family members may be entitled to Survivor Benefits when a loved one passes away. The SSA provides benefits to spouses, children, and sometimes even dependent parents. A surviving spouse may qualify for monthly benefits as early as age 60 (or 50 if disabled). Minor children who haven’t graduated high school and disabled adult children may also qualify. The one-time $255 death benefit isn’t much, but it’s automatic for a surviving spouse or child who was receiving benefits on the deceased’s record.

Then there’s the rare but frustrating case of being wrongly declared dead. This mistake can cause major headaches, from frozen bank accounts to denied health insurance. If you ever get a notice from SSA that you are deceased, act fast. Go to your local SSA office with identification and proof of life (yes, really), and they’ll work on correcting the mistake. The fix isn’t instant, so you’ll need to follow up to make sure your benefits and records are restored.

Social Security is a crucial safety net, but it’s full of rules that can trip people up. Knowing what to do can save a lot of hassle when dealing with a loved one’s benefits – or your own.

Sylvia Gordon is the author of “Medicare Mama’s Guide to Medicare and Social Security Retirement.” She has over one million followers on social media where you can find her as “Medicare Mama” or @TheMedicareFamily. Her third-generation family insurance business is in central Indiana and licensed in all 50 states. Learn more at TheMedicareFamily.com.