In order to give financial support during a trying period, surviving family members of a deceased Social Security beneficiary may be eligible for a lump sum death payment. But in spite of high inflation and growing expenses, especially for funerals, this payout has stayed unchanged at $255 since 1954.
Legislators are currently arguing for a much-needed raise of $2,900, which would bring this benefit into compliance with the current state of the economy.
Older Lump Sum
The death benefit has been fixed at $255 for almost 70 years; however, this amount has not increased to reflect inflation.
This sum was initially provided with the intention of assisting families in paying for the expenses related to burial a loved one. But this sum is no longer enough given the skyrocketing costs of goods and services.
Growing Rate of Inflation
The rising expense of living in America is the main justification for this planned rise. Essential costs like groceries, housing, and healthcare have been severely impacted by inflation, making it impossible for families to handle their everyday budgets, let alone unexpected funeral bills.
In the 1950s, a funeral could be planned for about $700, but in the current financial climate, the National Funeral Directors Association reports that the average cost of a standard funeral service—which includes cremation—is $6,280. The average cost of a typical funeral with a casket increases to $8,300 for those who choose that option.
It is obvious that a death benefit of $255 is insignificant in comparison to these costs.
Lawmaking Initiatives
The Social Security Survivor Benefits Equity Act is an attempt by politicians to modernize the death benefit in recognition of the need for an update. Senator Peter Welch of Vermont is spearheading this effort; he just submitted a plan to raise the benefit to $2,900.
Renowned individuals like Senators Elizabeth Warren and Bernie Sanders, who are co-leading this legislative push, lend their support to his efforts.
Senator Welch has brought attention to the financial and emotional burden that befalls families who lose a loved one. “Funeral expenses ought to be the least of a grieving family’s concerns,” he said, recognizing the mounting financial strain brought on by inflation.
The goal of this proposal is to guarantee that the death benefit is updated to account for current expenses, giving bereaved families some financial comfort during this difficult period.
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Adapting to Inflation
Almost every area of American life has been impacted by inflation, yet since the middle of the 20th century, the Social Security death benefit has not changed. To put this in context, since 1954, the dollar has lost a significant amount of its value while the price of necessities has increased.
This benefit would finally be in step with the current state of the economy with the proposed increase to $2,900, providing families in need with more substantial support.
If this plan is approved, the death benefit for urban wage earners and clerical workers would be modified annually based on the consumer price index to ensure that it remains inflation-adjusted.
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Present Eligibility
It’s important to comprehend the present eligibility requirements for the death benefit while legislators seek to increase the amount offered:
- Application Deadline: Within two years of your parent’s or spouse’s passing, you must submit an application for the death benefit.
- Survivor Spouse: If the surviving spouse was residing with the dead at the time of death, they usually receive a lump sum settlement.
- Children: The deceased person’s surviving children may get the payout if no spouse is qualified.
Notifying the Social Security Administration of a loved one’s death as soon as feasible is also crucial. In order to avoid any overpayment of Social Security benefits that would need repayment, this step is crucial.
The New Bill’s Effect
The Social Security Survivor Benefits Equity Act, if it is passed, will increase the lump sum death benefit to $2,900 beginning in 2025, a much-needed improvement.
In addition to assisting bereaved families with funeral costs, this would guarantee that subsequent payments stay up with the growing cost of life.
There’s hope that this long-overdue change will give families financial stability during one of the most difficult times in their life, with bipartisan backing and increased public attention.
Via: entiger.co
