The Social Security Administration (SSA) distributes benefits to several groups of people, including offspring of dead workers. In some situations, when a worker dies early and has unmarried children who meet certain qualifications, they may be eligible for Survivor or Family benefits.
However, these benefits do not endure indefinitely and, in some situations, are limited. Data suggest that about 30,000 offspring of dead workers lost their eligibility for benefits this year alone. While this may sound horrible, not all of them have lost eligibility for nefarious reasons, but it is worth considering this as a case study.
In January, over 2.04 million youngsters were getting these benefits. By July, the number had reduced to around 2.01 million, with approximately 30,000 youngsters removed from the program.
Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, highlighted that this position can be perplexing for many people, who believe that these beneficiaries are covered indefinitely.
“This has been a source of misunderstanding in recent months, and with good reason. We’ve noticed a fall in numerous subgroups of Social Security beneficiaries, including the children of deceased workers, but it’s unclear why, and the administration hasn’t responded to questions.”
Why might these Social Security family or survivor benefits end?
The most obvious reason for the benefits to expire is because beneficiaries have reached the age of eligibility. They may receive various advantages but are no longer considered children. According to the SSA, children must meet the following conditions to receive Survivors and Family benefits:
- Be unmarried
- Be age 17 and younger, or
- Be ages 18–19 and in school (K–12) full time, or
- Or be any age if they developed a disability at age 21 or younger.
Another possibility, if less pleasant, is that the SSA has judged that the family no longer meets the program’s criteria. Kevin Thompson, a financial expert and founder of 9i Capital Group, stated that circumstances such as income or changes in a child’s status may result in a loss of benefits.
“There are income thresholds that they may need to maintain, and if the income threshold goes over those limits, the earnings test can kick in and benefits can be reduced or eliminated.”
The most noteworthy reason is a change in income; if a surviving parent decides to work an extra job to maintain their family, it may affect their child’s eligibility.
But declining birth rates along with children aging out of the system is probably the most realistic reason, as according to Thompson, “It’s a delicate balance for something that is actually owed to you, especially if you have a child under the age of 18.
I haven’t seen a push to reduce the number of children receiving these benefits, while many of the children are likely aging out of the program, and with lower birth rates of Gen Y and Gen Z, we may continue to see this.”
This could explain why these benefits were not reduced equitably in all states. In countries with higher birth rates, as children age out, they are replaced by those who enter the program, whereas in states with lower birth rates, there are fewer replacements. Beene believes that this is a problem with reporting rather than with the advantages themselves.
“We also know that not all states are experiencing the same reductions in numbers. Some states have witnessed little decrease in beneficiary numbers, while others have seen large cuts. This could indicate a problem at the state level with how data is handled and how Social Security makes repairs on the back end.”
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