New Bill Increases Social Security Death Benefit
The bill would adjust the lump-sum payment for the first time in 70 years.
New legislation, the Social Security Survivor Benefits Equity Act, would increase the Social Security lump-sum death benefit from $255 to $2,900, indexing it for inflation annually thereafter.
The bill, S.5178, was introduced by Sen. Peter Welch, D-Vt., and is co-sponsored by Sens. Elizabeth Warren, D-Mass., and Bernie Sanders, I-Vt.
Welch said Thursday in a statement that the bill ”would adjust benefits for the first time in 70 years to cover costs associated with cremation or burials for surviving family members by increasing the Social Security Administration’s (SSA) lump-sum death benefit to account for inflation.”
Beginning in 2025, survivor benefits would increase from $255 to $2,900 and subsequently ensures that the benefit is indexed to keep up with inflation, Welch said.
Nancy Altman, chair of the Strengthen Social Security Coalition, told ThinkAdvisor Thursday in an email that the lump-sum death benefit had not been udpated since 1954.
“Not only does updating it bring it closer to its goal of offsetting funeral costs, it has a program integrity byproduct, in that it encourages families to report the death of a beneficiary,” Altman said. “The legislation is excellent policy.”
As it stands now, an eligible spouse or child can receive a one-time lump sum death benefit of $255 upon the death of a beneficiary, Altman said, but they must apply for it.