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Who Collects Past Due Benefits if a Claimant Dies Before a Disability Decision is Issued

funeralsceneI recently received a call from a colleague about a situation that is all too common given the delays associated with the Social Security disability adjudication process – the death of a claimant prior to a final adjudication.

In this case, my friend’s mother was married to a gentleman who had applied for benefits in the early 2000’s.  He had been denied at his first hearing, then appealed and ended up before a judge a second time for a second hearing.  Shortly after the second hearing (but before a decision was made) he passed away.

Because of the more then 7 year pendency of his claim the past due benefit amount was substantial – over $115,000.  The question – who gets the money.

According to Social Security law (Code of Federal Regulations, Title 20, Section 404.503(b)), the surviving spouse would be the primary beneficiary if she/he was living in the same household as the claimant at the time of death.  If the surviving spouse does not qualify, the surviving children collect.  If there are no children, the parents of the deceased collect.  If there are no parents, the surviving spouse who was not living with the claimant at the time of his death, and so forth.

Note that the funds do not go into the deceased claimant’s estate – they are payable directly to the spouse or other beneficiary.

I previously published a blog post about how I won a case for a deceased claimant.  Prior to proceeding I submitted form HA-539, a Notice Regarding Substitution of Party Upon Death of a Claimant.  Individuals eligible to receive benefits must complete and submit form SSA-1724, which is a form entitled Claim for Amounts Due in the Case of a Deceased Beneficiary.