In an effort to address the growing financial burden of funeral costs, lawmakers are pushing for a significant increase in Social Security’s lump sum death benefit. Currently fixed at $255 since 1954, this amount has failed to keep pace with rising expenses, prompting a new bill that could potentially raise it to $2,900. This proposed change aims to better support grieving families during a challenging time.
The Current State of Death Benefits
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Social Security provides monthly benefits to retirees, individuals with disabilities, and their families, including survivor benefits upon the death of a recipient. However, the one-time death benefit has remained stagnant at $255 for nearly seven decades, which is hardly sufficient given the increasing costs associated with funerals and related expenses.
According to the National Funeral Directors Association, the average cost of a full funeral and cremation service has surged from approximately $700 in 1954 to over $6,280 today. For funerals involving caskets, the average cost is around $8,300, highlighting the inadequacy of the current lump sum payment.
Legislative Action: The Social Security Survivor Benefits Equity Act
In response to these financial challenges, Senator Peter Welch of Vermont has introduced the Social Security Survivor Benefits Equity Act. This bill proposes increasing the lump sum death benefit to $2,900, adjusting it for inflation based on the consumer price index for urban wage earners and clerical workers. The support of Senators Bernie Sanders and Elizabeth Warren underscores the significance of this initiative.
Welch emphasized the urgency of this change, stating, “Funeral costs should be the last thing on the minds of grieving families when they lose a loved one.” The proposed increase is seen as a crucial step in alleviating the financial strain on families during such a difficult period.
The Impact of Rising Funeral Costs
The need for an increase in the death benefit is evident when considering the rising costs of essential services. Many families are left scrambling to cover funeral expenses, and the current benefit barely makes a dent in addressing these costs. As Kevin Thompson, a finance expert, notes, “This will help offset the average cost of funerals and other arrangements in the event of death.”
With funeral expenses continuing to escalate, the proposed increase in the death benefit is viewed as long overdue. The change would align the benefit more closely with the financial realities of today’s economy, providing much-needed support to families.
Challenges Ahead for the Proposed Bill
Despite the support for the proposed increase, the bill faces significant hurdles. Joseph Patrick Roop, president of Belmont Capital Advisors, has expressed skepticism about its chances of passing due to political and budgetary challenges. “Bills that aim to expand or adjust Social Security often face hurdles, especially given the broader debate on Social Security’s solvency and potential reform,” he warns.
While the bill’s proponents are optimistic, the legislative process can be unpredictable, and various factors may affect its approval.
Eligibility for the Enhanced Benefit
If approved, the increased lump sum benefit would take effect in 2025. To qualify, survivors must meet specific criteria and apply within two years of the deceased’s passing. The payment typically goes to the surviving spouse; however, if no spouse exists, the deceased’s children may receive the benefit.
Surviving family members are also responsible for notifying the Social Security Administration of their loved one’s death to prevent any erroneous future benefits. In addition to the one-time payment, survivor benefits are available for spouses aged 60 or older, those aged 50 or older with disabilities, and caregivers of the deceased’s children. Children under 18, children with disabilities, stepchildren, grandchildren, and dependent parents may also qualify under certain conditions.
Conclusion
The proposed increase in Social Security’s lump sum death benefit represents a critical step toward alleviating the financial burden on grieving families. With funeral costs continuing to rise, it is essential for government programs to adjust to meet the needs of the population. While challenges remain, the potential benefits of this legislation could significantly impact the lives of those dealing with loss, offering them much-needed financial support during a difficult time.