By Alex Moore
One unfortunate fact of aging with a loved one is that one person has to outlive the other. And that doesn’t just bring emotional turmoil, but financial turmoil as well. The average funeral cost $8,300 in 2023, according to the National Funeral Directors’ Association. Social Security offers seniors little to no help with this steep cost—in fact, it demands the return of all benefits paid in the month of death—but a new bill proposed by Senator Peter Welch this September would change that.
The Social Security Survivor Benefits Equity Act would increase the lump-sum death payment to the widow or widower of a Social Security beneficiary to $2,900. That’s up from a meager $255, a figure that hasn’t changed since 1954.
The proposed law’s boost would bring seniors’ benefits all the way up to speed with inflation. The $255 benefit introduced in 1954 would be worth $2,984 in 2024 dollars, according to USInflationCalculator.com. If passed, the bill would also ensure that the survivorship benefit continued to keep pace with inflation by increasing it each year at the same rate as the Consumer Price Index for Urban Wage Earners (CPI-W), the same index used to calculate Social Security’s COLA.
The Social Security Administration (SSA) expects that this law would dramatically increase retirees’ use of the survivorship benefit. Right now, only 57 percent of widows and widowers eligible for the benefit apply for the payment because it is so meager, but the SSA expects that number would rise to 90 percent with the increased payout.
The new law would come with a cost, though. If enacted, the SSA projects that it would cost about $39.8 billion from 2024 to 2033. Over the next 75 years, the SSA predicts that the bill would decrease Social Security’s trust fund balance by 0.03 percent of the payroll taxes it collects.
At TSCL, we strongly endorse this legislation. We understand that the costs of an unexpected funeral are often prohibitive for seniors who are struggling to get by. However, we’d like to see it go one step further and eliminate the requirement to return benefits paid in the month of death. By bringing the survivor benefits back up to speed and eliminating the requirement to return already-paid benefits, we could help todays and tomorrow’s seniors better navigate one of the most difficult experiences life has to offer.
