If you have children, you probably spend some time worrying how they will be provided for in the event of your death. You no doubt have life insurance and financial assets that they will inherit that will help provide for their care until they are adults. But one overlooked resource is Social Security benefits for children of deceased parents. This will provide a monthly income for the children – or more specifically for their caretakers – to cover ongoing expenses.
With that in mind, you may be able to move your financial assets and even the proceeds of your life insurance policies into trust funds that will be available to help your children once they reach age of majority. This will help to provide for a college education as well as money to get started early in life. From a financial standpoint at least, it will be as if you’re still around to help them.
But let’s take a closer look at those Social Security benefits . . . .
How do you become eligible?
Your children – including natural, adopted or dependent step children – are eligible as long as you and/or your spouse either worked long enough in a job where he or she paid Social Security taxes (10 year minimum), or are already collecting benefits due to being disabled or retired.
In addition, per the Social Security Administration (SSA) website:
- The child also must be unmarried.
- The child must be younger than age 18.
- 18-19 years old and a full-time student but no higher than grade 12.
- 18 or older and disabled, and the disability must have started before age 22.
SSA will require certain documents when applying for benefits for your child(ren). Here is at least a partial list of the requirements:
- Your child’s birth certificate.
- Your and your spouse’s Social Security numbers.
- For survivors benefits, proof of the parents death.
- For disability benefits, medical evidence to prove the disability.
- Other documentation as required.
How long do benefits continue?
As a general rule, benefits stop when a child reaches the age of 18, but there are exceptions.
One such exception is when the child is a student, though this does not extend to college enrollment. Benefits will continue only as long as the child is a full-time student at either a high school or an elementary school. Upon turning 18, the child will have to complete a statement of attendance, certified by the school. The benefits will end either upon high school graduation, or upon reaching the age of 19 years and two months, whichever comes first.
Disability of the child is another exception, and if that is the case benefits will continue past age 18.
Benefits for Caring for a Child
If you are caring for a child who is receiving Social Security benefits, those benefits will end when the child turns 16 – unless the child is disabled. Benefits can continue past age 16 if you “exercise parental control and responsibility for a mentally disabled child or perform personal services where child was physically disabled.”
This disability status must be established before the child reaches 16. The Social Security Administration will notify you of the termination of benefits prior to the child turning 16, at which point you’ll have to begin picking application for continuation based upon disability.
The Amount of the Monthly Benefit
If you will be relying upon Social Security for at least part of the cost of care for your children, is important to know how much that monthly benefit will be.
A child may receive a benefit of up to one half of the parent’s retirement or disability benefit, or 75% of the deceased parents’ basic Social Security benefit. The Social Security Administration allows you to estimate your benefits on their website. You can calculate your benefit to help you to get at least a rough idea as to how much you can expect your own retirement benefit to be, as well as the benefit to your children in the event of your death.
The maximum benefit per family is limited to between 150% and 180% of the parents’ full benefit amount. Should the monthly benefit exceed this calculation for any reason, the amount of benefit paid for your children will be reduced proportionally to stay within limit. This may become an issue if there are more than two children who will be dependent upon Social Security benefits in the event of your death.
If you would like to learn more about Social Security benefits for your children upon your death, you can go to the Social Security website.