Something I don't understand about Social Security

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RationalWalk
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Something I don't understand about Social Security

Post by RationalWalk »

I just learned that each social security payment is for the benefits in the previous month. That should mean that the payment in January would be for December of the previous year. If that were the case, then the payment amount for January would be lower than for the remaining months of the current year (assuming there had been an annual COLA increase). Yet, when I checked my payments they are always level for the whole year at the COLA-adjusted amount for that year. What am I missing here?
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jebmke
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Re: Something I don't understand about Social Security

Post by jebmke »

The COLA is applied in the month of payment
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Big Dog
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Re: Something I don't understand about Social Security

Post by Big Dog »

Much of social security's letters and announcements to beneficiaries are based on the net amount and when paid (as opposed to when earned). 99% of the people care about the former, and few have no idea of the latter.

https://faq.ssa.gov/en-us/Topic/article/KA-01951
"When the increase takes effect: The increase will begin with benefits that Social Security beneficiaries receive in January 2025. Increased SSI payments will begin with the December 31, 2024 payment."
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Chip Munk
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Re: Something I don't understand about Social Security

Post by Chip Munk »

RationalWalk wrote: Wed Oct 30, 2024 11:24 am I just learned that each social security payment is for the benefits in the previous month. That should mean that the payment in January would be for December of the previous year. If that were the case, then the payment amount for January would be lower than for the remaining months of the current year (assuming there had been an annual COLA increase). Yet, when I checked my payments they are always level for the whole year at the COLA-adjusted amount for that year. What am I missing here?
The latest COLA is applied starting with the December benefit that is paid to you in January. So as you said, all of the payments received in a given year are the same, starting with the December benefit that is paid in January through the November benefit that is paid in December.
capran
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Re: Something I don't understand about Social Security

Post by capran »

I'll add that to the Social Security mysteries list along with why they (Social Security) takes back your last SS payment for the month of your death. So, if the payment you receive in January is really for December, why would SS take back the January payment into MIL's account when she passed in Late January.
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Chip Munk
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Re: Something I don't understand about Social Security

Post by Chip Munk »

capran wrote: Wed Oct 30, 2024 5:25 pm I'll add that to the Social Security mysteries list along with why they (Social Security) takes back your last SS payment for the month of your death.
On the other hand, when you start Social Security you get a full month's benefit no matter the day of your birthday. They pay the full monthly benefit you are entitled to based on your age regardless of what day of the month you reach that age. For example, if you reach Normal Retirement Age on Oct 31, 2024 and choose to start your benefit in Oct 2024, you would receive your full PIA -- no reduction and no pro-rating even though you didn't actually reach your Normal Retirement Age until the end of the month.
So, if the payment you receive in January is really for December, why would SS take back the January payment into MIL's account when she passed in Late January.
This web page https://www.usa.gov/social-security-report-a-death states:

The SSA cannot pay benefits for the month of a recipient’s death. That means if the person died in July, the check or direct deposit received in August (which is payment for July) must be returned.

Based on that, they should not have taken back the payment received in January that was the December benefit payment. You should call your MIL's local SSA office.
MedEngineer
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Re: Something I don't understand about Social Security

Post by MedEngineer »

capran wrote: Wed Oct 30, 2024 5:25 pm I'll add that to the Social Security mysteries list along with why they (Social Security) takes back your last SS payment for the month of your death. So, if the payment you receive in January is really for December, why would SS take back the January payment into MIL's account when she passed in Late January.
Its just one last insult to the tax payer, I mean, really, a once in a lifetime payment when you die so your grieving relatives don't have to pay the government back? I had to deal with this hassle for my father when my mom passed, and to top it off, he couldn't even get the messily SS death benefit because she didn't work enough credits.
prd1982
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Re: Something I don't understand about Social Security

Post by prd1982 »

MedEngineer wrote: Wed Oct 30, 2024 6:23 pm
capran wrote: Wed Oct 30, 2024 5:25 pm I'll add that to the Social Security mysteries list along with why they (Social Security) takes back your last SS payment for the month of your death. So, if the payment you receive in January is really for December, why would SS take back the January payment into MIL's account when she passed in Late January.
Its just one last insult to the tax payer, I mean, really, a once in a lifetime payment when you die so your grieving relatives don't have to pay the government back? I had to deal with this hassle for my father when my mom passed, and to top it off, he couldn't even get the messily SS death benefit because she didn't work enough credits.
As Chip Munk said, she should have kept the payment received in Jan. There is no insult here.
capran
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Re: Something I don't understand about Social Security

Post by capran »

prd1982 wrote: Wed Oct 30, 2024 6:51 pm
MedEngineer wrote: Wed Oct 30, 2024 6:23 pm
Its just one last insult to the tax payer, I mean, really, a once in a lifetime payment when you die so your grieving relatives don't have to pay the government back? I had to deal with this hassle for my father when my mom passed, and to top it off, he couldn't even get the messily SS death benefit because she didn't work enough credits.
As Chip Munk said, she should have kept the payment received in Jan. There is no insult here.
well, they made an auto deduction for the January Payment. water under the bridge.
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RationalWalk
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Re: Something I don't understand about Social Security

Post by RationalWalk »

prd1982 wrote: Wed Oct 30, 2024 6:51 pm
MedEngineer wrote: Wed Oct 30, 2024 6:23 pm
Its just one last insult to the tax payer, I mean, really, a once in a lifetime payment when you die so your grieving relatives don't have to pay the government back? I had to deal with this hassle for my father when my mom passed, and to top it off, he couldn't even get the messily SS death benefit because she didn't work enough credits.
As Chip Munk said, she should have kept the payment received in Jan. There is no insult here.
Article on this topic here:

https://humbledollar.com/2024/10/that-final-payment/
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snic
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Re: Something I don't understand about Social Security

Post by snic »

MedEngineer wrote: Wed Oct 30, 2024 6:23 pm
capran wrote: Wed Oct 30, 2024 5:25 pm I'll add that to the Social Security mysteries list along with why they (Social Security) takes back your last SS payment for the month of your death. So, if the payment you receive in January is really for December, why would SS take back the January payment into MIL's account when she passed in Late January.
Its just one last insult to the tax payer, I mean, really, a once in a lifetime payment when you die so your grieving relatives don't have to pay the government back? I had to deal with this hassle for my father when my mom passed, and to top it off, he couldn't even get the messily SS death benefit because she didn't work enough credits.
Well, SS does also provide a one-time death benefit of something like $250, so there's that. (Presumably to be used for burial expenses?)
HooCares
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Re: Something I don't understand about Social Security

Post by HooCares »

snic wrote: Thu Oct 31, 2024 1:40 pm
MedEngineer wrote: Wed Oct 30, 2024 6:23 pm
Its just one last insult to the tax payer, I mean, really, a once in a lifetime payment when you die so your grieving relatives don't have to pay the government back? I had to deal with this hassle for my father when my mom passed, and to top it off, he couldn't even get the messily SS death benefit because she didn't work enough credits.
Well, SS does also provide a one-time death benefit of something like $250, so there's that. (Presumably to be used for burial expenses?)
Barely enough for the county dump.
talzara
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Re: Something I don't understand about Social Security

Post by talzara »

snic wrote: Thu Oct 31, 2024 1:40 pm Well, SS does also provide a one-time death benefit of something like $250, so there's that. (Presumably to be used for burial expenses?)
HooCares wrote: Thu Oct 31, 2024 2:23 pm Barely enough for the county dump.
The lump sum death benefit is 3 times the PIA, but it has been capped at $255 since 1954. The cap was calculated by tripling the maximum PIA in 1954, which was $85.

If there were no cap, you'd lose 1 month of benefits, but your family would get 3 months of benefits as a lump sum. The return of the last month of benefits prevents it from being seized by creditors, leaving the legal beneficiaries with only 2 months of benefits.

Since there is a cap, nobody can get more than $255.

A bill has been introduced in the Senate that indexes the cap to inflation, with a one-time adjustment for 70 years of inflation since 1954. However, we are not allowed to discuss pending legislation on Bogleheads.

This is what the law says now:
Lump-Sum Death Payments

(i) Upon the death, after August 1950, of an individual who died a fully or currently insured individual, an amount equal to three times such individual’s primary insurance amount (as determined without regard to the amendments made by section 2201 of the Omnibus Budget Reconciliation Act of 1981[29], relating to the repeal of the minimum benefit provisions), or an amount equal to $255, whichever is the smaller, shall be paid in a lump sum to the person, if any, determined by the Commissioner of Social Security to be the widow or widower of the deceased and to have been living in the same household with the deceased at the time of death. If there is no such person, or if such person dies before receiving payment, then such amount shall be paid— ...

https://www.ssa.gov/OP_Home/ssact/title02/0202.htm
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