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That Final Payment

Brian White

IT’S IMPORTANT TO BE familiar with what happens with Social Security benefits when someone dies. Otherwise, you may find yourself in a long, painstaking battle to get the payment to which your loved one was entitled. I found this out the hard way.

My father-in-law Bernard died in September 2015. My wife was his executor and the agent under his power of attorney (POA). But I’d earlier served as POA and executor for my mother, so I handled Bernard’s estate as well, except for signing documents.

The Social Security rules relevant to this situation are as follows. First, the check you receive in any given month represents the benefit for the previous month. Second, you don’t receive a benefit for the month in which you die. You will, however, receive a payment in the month you die, since that payment is for the previous month. Your estate can keep that payment.

I wasn’t clear on these rules, which led to much frustration and gnashing of teeth.

Bernard died in September, and he received a payment that month—which was the payment for August. On Oct. 2, when Bernard would normally have received a direct-deposited Social Security payment for September, he didn’t get a payment, as Social Security had been notified of his death, presumably by the funeral home.

On Oct. 9, we received a letter saying Bernard “is not entitled to monthly benefits beginning September 2015.” It also said, “Since we did not stop [Bernard]’s payments until October 2015, he was paid $2,041.20 too much in benefits.” The letter concluded: “You should refund this overpayment within 30 days.”

This was incorrect. The payment for September would have been received in early October, and Social Security didn’t send an October payment. I didn’t catch that error at the time. Instead, I did what the letter requested and sent a check on Oct. 10.

On Oct. 11, we received another letter from Social Security saying, “Since we were able to stop [Bernard]’s October 2, 2015 payment for $2,041.20, he no longer owes us any money.”

Okay, I thought, Social Security won’t cash the check.

No such luck.

On Nov. 10, Social Security deposited the check, so it now owed us $2,041.20. In the months that followed, we called 10 times to try to get this resolved. Each time, we had to wait to get someone on the line, and each time we explained the whole sequence of events. We were assured they were “submitting an action” and to check back in two weeks or a month. Finally, on Aug. 9, 2016, we got a check. This was just in time to close Bernard’s estate before the one-year deadline, after which we would have had to pay for an extension. The rest of the estate had long been settled.

The lesson: If you get a notice from Social Security demanding money back, make sure you really owe money, because it’s hell to get Social Security to correct its errors after it has your money. In this case, if I’d carefully examined the letter it sent or just waited a couple of days, I could have avoided a seemingly endless hassle.

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Rich
3 months ago

Thanks Brian. A very timely article because I’m going through that now. My mother passed away last month and I’ve already received the SS letter stating they are recovering her October payment due to her death but haven’t received one yet saying her estate owes them. Also, the payment from them upon death, I understand to simply be a death benefit. Any more letters I’ll just sit on for a few weeks until the dust settles. Rich

Brian White
3 months ago
Reply to  Rich

Good plan.

Linda Grady
3 months ago

Sorry to read about your experience, Brian, but even sorrier to learn that this exact mistake by the Social Security Administration happens to others as it did to me. I described my experience in a comment last week to another article and previously. In my case, I knew the timing of the payment, so when my husband’s direct deposit was mistakenly reclaimed from his bank account, I knew it was a mistake right away. It took two months for them to refund his last check. I was able to get people on the phone without too big a hassle. Since the calls were made in the immediate aftermath of his death, they also had to listen to me cry.

Brian White
3 months ago
Reply to  Linda Grady

Yes, it is disgusting that this keeps happening. Having a Masters degree in Computer Science, I am quite sure that these erroneous messages are automatically generated and that the problem could be fixed by a competent programmer, probably without much work. However, they may be using ancient computers and software, with few people left who know how to operate them. I’m glad you were able to get it straightened out quicker than I was, but they really should not be doing this to people at such a difficult time.

Martin McCue
3 months ago

I’ve learned from being an executor for a few estates that calling Social Security to report a death must be one of your first telephone calls to be made when someone dies, right after the funeral home and any clergy who will hold services. The faster you get the Social Security spigot closed, the better off you will be. You should tell this to your own chosen executor, too. Social Security behaves like any government institution when they are holding money that is really yours. They move slowly and make you prove you deserve it.

DrLefty
3 months ago

We just went through this with my mother-in-law’s SS after she passed on August 13. We made sure that my husband’s stepfather notified SS right away, within days of her passing. SS still sent him a letter saying he owed them money, but he couldn’t possibly. The check in September would have been for August, and her account was closed long before an October pay date. He may have already paid the SS, but we’ll definitely check with him.

Kevin Lynch
3 months ago

Similar experience when my step father passed, July 28th, 2018.

On or about August 8th, his SS Check was deposited into his bank account. A few days later, the check was reversed out of his account. Two weeks or so later I got the first of two letters from SS. The first one was incorrect, as usual, and the second one corrected the first one.

Bottom line, instead of being paid for the days you were alive in the month you died, just as SS rounds down on any dollars they owe you, they also devised a way to deprive the recipient of monies earn during the month they die.

It is interesting, because Civil Service and the Department of Defense do NOT follow the same method and actually prorate the final monies earned. My dad served 24 years in the US Army and 16 years in the Capitol Police, in the US Senate.

My natural father died at 53, in 1980, never receiving a penny of his Social Security, and only 6 years of his US Army Retirement, for 32 years of service. Fortunately, his wife, my step mother, did received reduced benefits from both, until her death in 2010.

Keep this in mind…when Social Security, or any government agency makes a mistake, it is never their fault. If you get a notice that anyone other than you owes them money, be careful assuming any liability for the debt. In many cases, there is actually little they can do to recover the debt from a deceased person, especially if the state has been probated, or better yet, if there is not estate to probate.

Brian White
3 months ago
Reply to  Kevin Lynch

I’ll keep that in mind. I’m the POA for my 97-year-old aunt, and there is a good chance I’ll be dealing with this sort of mistake again in the future.

Scott Dichter
3 months ago

This is a tale that applies to bureaucracies in general. They’re set up to protect themselves, not to make things easy for you.

Rick Connor
3 months ago

Brian, thanks for a useful article. Dealing with this kind of bureaucracy right after losing a loved one makes it especially difficult. I don’t remember the exact details, but I remembered being confused about this when processing my mother’s estate some 20 years ago. When my dad died, I took my mother to the local SS office to switch to her survivor benefit. The agent was quite helpful and it went smoothy. I’ve also had good service visiting a local SS site when I had a snafu signing up for Medicare.

Brian White
3 months ago
Reply to  Rick Connor

I wish I had done that, or else looked up the rules before writing a check.

Edmund Marsh
3 months ago
Reply to  Rick Connor

My mother did the same after my father died. We figured it would be easier. Even went so far as to travel to a small town about an hour away with an office that had a reputation for quick, friendly service.

1PF
3 months ago

Very helpful, thanks! To clarify, should the first instance of 2016 (“Bernard died in September 2016”) be 2015?

Jonathan Clements
Admin
3 months ago
Reply to  1PF

You’re right — I made the fix.

Michael1
3 months ago

Thanks for writing about your experience. That’s useful info.

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