Thus, no benefits are paid for the month of death. The check (or direct bank deposit) for each month's benefit is issued in the following month. If a beneficiary dies late in the month, family members or the executor of the estate may not notify the Social Security Administration (SSA) in time to stop the payment. Subsequently, they are informed that the check must be returned to the government. Arguments For and Against Paying Benefits for the Month of Death

		Arguments for Changing the Current Policy

Critics of the current policy argue that withholding benefits for the month of death does not make sense. They maintain that a person's bills do not stop at the beginning of the month in which they die. Critics contend that the public views the policy as an anomaly—as a mistake in the design of the Social Security system. SSA estimates that paying full benefits for the month of death would cost $1.6 billion annually. SSA also estimated the increase in benefit payments under a proposal in which (1) a full benefit for the month of death would be payable to a surviving spouse (the surviving spouse would not be required to have been living with the beneficiary when the death occurred or to be entitled to benefits), or (2) if there is no surviving spouse, a pro-rated benefit based on the number of days the beneficiary was alive during the final month would be payable. Supporters of the current policy also point out that the system pays benefits to an individual beginning with his or her first month of entitlement, regardless of when entitlement began during the month, and that this provides rough balance in the system for not paying benefits for the month of death. They contend that there is little appreciation for the administrative difficulties (and potential costs) involved in determining who should receive the deceased beneficiary's benefit for the month of death. Given that more than 2 million beneficiaries die each year, this would require a labor-intensive process, similar to the taking of regular benefit applications.
Social Security benefits are not paid for the month in which a beneficiary dies. In most cases, the check that an individual receives in a given month represents payment for the preceding month. In other words, by design, the check (or direct bank deposit) arrives after the month for which it applies. In cases where a beneficiary dies late in the month, the Social Security Administration often is not notified of the death in time to stop the payment. When family members are informed that the check must be returned, they often complain that the policy is unfair and creates a financial hardship because the deceased beneficiary incurred expenses for part (or even most) of the month.
Over the years, legislation has been introduced that would provide a full benefit for the month of death or a pro-rated benefit based on the proportion of the month that the beneficiary was alive. Supporters of such legislation argue that withholding benefits for the month of death does not make sense given that a person's bills do not stop at the beginning of the month in which they die. They argue that the public views the policy as anomalous in a system designed to provide monthly income to retirees, the disabled, and survivors of deceased workers.
Critics of such legislation argue that paying full benefits for the month of death would cost an estimated $1.6 billion annually (excluding administrative costs). They point out that a deceased beneficiary's spouse and children can collect survivor benefits for the month of death, regardless of when the death occurred; that survivors may be entitled to a $255 lump-sum death payment; and that those seeking to have benefits paid for the month of death have little appreciation for the administrative difficulties involved in determining who should get the more than 2 million final benefit checks issued each year.