Some senators propose to increase Social Security's death benefit from $255 since 1954.

• In the event of your death, your loved ones may receive a one-time $255 death benefit from Social Security.
• But that amount has not changed in 70 years.
• The Senate has introduced a bill to increase the amount to $2,900 to account for the current cost of living.

Upon the demise of a Social Security recipient, their family members may be eligible for a one-time $255 death benefit.

Since 1954, the cost of funerals has increased due to inflation, but the amount spent on funerals has remained the same.

On Wednesday, Senator Peter Welch, D-VT, presented a new bill, the Social Security Survivor Benefits Equity Act, to increase the lump-sum death benefit to $2,900 to account for current living expenses.

The bill is jointly sponsored by Sens. Bernie Sanders and Elizabeth Warren.

Welch stated that the change aimed to ease the financial burden on families after the loss of a loved one.

"Grieving families should not have to worry about funeral costs due to inflation, but unfortunately, the high cost of burying a loved one has become a top concern for many mourners."

The House may vote on a bill that affects pensioners' Social Security benefits.

In the 1950s, the cost of a full memorial and cremation service was approximately $700, according to Welch's proposal.

According to the National Funeral Directors Association, the median cost of a funeral with casket and burial is $8,300, while the average cost for a funeral with cremation is $6,280.

The $2,900 death benefit, as per the bill, would become effective in 2025 and would be adjusted for inflation using the CPI-W, which is used to calculate Social Security's annual cost-of-living adjustments.

The proposal has been supported by Social Security Works and the Strengthen Social Security Coalition.

What happens to Social Security benefits when you die

Social Security beneficiaries' survivors can receive a one-time lump-sum death payment of $255, subject to certain conditions.

According to the Social Security Administration's guide on survivors' benefits, upon working for a sufficient duration, a one-time payment of $255 is made upon death.

According to the agency, survivors, including a spouse or child, must apply for payment within two years of the date of death.

If a surviving spouse was living with the deceased, they may be eligible for the death payment. Additionally, if the spouse was living apart from the deceased but was receiving Social Security benefits based on their record, they may also be eligible for the $255 payment.

If there is no surviving spouse, children of the deceased may be eligible for the payment, provided they qualify to receive benefits on their deceased parent's record when they died.

It is crucial for survivors to notify the Social Security Administration immediately when a beneficiary dies, even though funeral homes typically report deaths to the agency, advises Jim Blair, vice president of Premier Social Security Consulting and a former Social Security administrator.

According to the Social Security Administration, if a one-time death payment is available, any benefit payments received by the deceased in the month of death or after must be returned. The handling of this rule depends on the timing of the death.

If a deceased beneficiary was owed a Social Security check or Medicare premium refund, a claim can be filed with the Social Security Administration.

According to the Social Security Administration, certain family members may be eligible to receive survivor benefits based on the deceased beneficiary's earnings record starting from the month they died.

A surviving spouse who is 60 years old or older, a surviving spouse who is 50 years old or older with a disability, a surviving divorced spouse who meets certain qualifications, or a surviving spouse who is caring for a deceased's child under the age of 16 or with a disability may be eligible for certain benefits.

Other family members who may be eligible for benefits include unmarried children under 18 or 19 if they are full-time elementary or secondary school students, or age 18 and older with a disability that began before age 22; stepchildren, grandchildren, step-grandchildren, or adopted children under certain circumstances; and parents aged 62 or over who relied on the deceased for at least half of their financial support.