Social Security overpayment after a parent died: what families need to know

The month-of-death rule

Social Security benefits are paid a month behind. The payment that arrives in August is for July. A person must be alive for the whole month to be due that month's payment, so no benefit is paid for the month of death.

Example: Dad died on July 20. The deposit that arrives in August is the July payment, and it has to go back, even though he was alive for most of July. If he died on August 2, the August deposit, which is for July, is his to keep, and the September deposit goes back.

When SSA learns of a death, usually from the funeral home, it asks the Treasury to reclaim any payment made after death directly from the bank. That is why families sometimes see money disappear from a parent's account without a letter. Do not spend a deposit that arrives after a death until you know whether it is owed.

Why a letter can arrive months or years later

A returned deposit is one thing. A formal overpayment notice addressed to the estate, a surviving spouse or a family member is another, and it often surprises people. Common causes:

• SSA did not learn of the death right away and kept paying for several months.
• An overpayment had already built up while the parent was alive, for example from an unreported pension, and SSA finished the review after the death.
• SSA's records show a different date of death than the death certificate.
• The parent received SSI, and money in the account at the time of death pushed them over the resource limit in earlier months.

Read the letter carefully for who it is addressed to and what it says caused the overpayment. Our guide to reading an overpayment letter shows where each piece of information sits.

Who has to pay it back?

This depends on the situation, and it is worth getting right before anyone writes a check.

• The estate. An overpayment to the person who died is generally a debt of that person, and SSA can seek repayment from their estate.
• Others paid on the same record. SSA can recover an overpayment from other people who receive benefits on the same worker's record. In practice, that is usually a surviving spouse, and SSA may withhold from the spouse's own monthly benefit.
• A representative payee. If a family member was the parent's representative payee, SSA may hold them responsible in some cases, for example if they received payments after the death.
• Anyone who received the money. If someone used or withdrew payments made after the death, SSA can seek it from them.

Being a son or daughter does not, by itself, make you personally liable for a parent's Social Security debt. If you receive a letter addressed to you personally and you were not a payee, did not receive the money and do not get benefits on that record, ask SSA in writing to explain the basis for holding you responsible.

What to do in the first week

• Find the date on the letter. Deadlines count from it, and SSA assumes the letter arrived 5 days later. The deadline calculator gives you the exact dates.
• Check the date of death. Compare SSA's date with the death certificate. A wrong date can create an overpayment that should not exist.
• Check what the bank already returned. If the Treasury reclaimed the post-death deposit, make sure SSA has credited it. Ask the bank for a record.
• Do not pay out of pocket yet. If the estate is responsible, it should be handled through the estate, not from a family member's own account.

Disputing it, or asking for a waiver

The same rights apply as for any overpayment. If the facts are wrong, such as the date of death, the amount or the reason, ask for reconsideration on Form SSA-561 within 60 days of receiving the notice. If the overpayment is real but the person being asked to repay was not at fault, and repaying would be a hardship or unfair, ask for a waiver on Form SSA-632 at any time. A surviving spouse whose own benefit is being withheld can ask for a waiver.

File within 30 days of receiving the notice and SSA does not collect until it decides. Our guide to SSA-561 vs SSA-632 explains which fits. If the spouse agrees it is owed but the monthly withholding is too high, see how to ask for a lower rate.

Money the family may be owed

A death can also mean money due to the family, and it is easy to miss while dealing with a debt letter.

• Survivor benefits. A surviving spouse, and in some cases minor or disabled children, may be able to get monthly survivor benefits. These are not automatic for everyone; contact SSA to apply.
• The one-time death payment. A surviving spouse or eligible child may qualify for a $255 lump-sum death payment.
• Benefits the parent was owed. If SSA owed the parent money when they died, an eligible family member can claim it on Form SSA-1724.

Ask SSA to check all three in the same call where you discuss the overpayment. In some cases, money due can be offset against what is owed.