TN 41 (03-91)

Citations:

Social Security Act - Sec. 1612(a)(2)(D)and (E)

A. Definition

A death benefit is something received as the result of another's death.

Examples of death benefits include:

• proceeds of life insurance policies received due to the death of the insured;

• lump sum death benefits from SSA;

• RR burial benefits;

• VA burial benefits;

• inheritances in cash or in kind;

• cash or in-kind gifts given by relatives, friends, or a community group to “help out” with expenses related to the death.

NOTE: Recurring survivor benefits such as those received under title II, private pension programs, etc., are not death benefits.

B. Policy principle — Effective April 1, 1988

Death benefits provided to an individual are income to such individual to the extent that the total amount exceeds the expenses of the deceased person's last illness and burial paid by the individual.

Last illness and burial expenses include: related hospital and medical expenses; funeral, burial plot, and interment expenses; and other related expenses.

C. Policy principle — Prior to April 1, 1988

Death benefits provided to an individual were income to such individual to the extent that the total exceeded the lesser of:

• $1,500; or

• the expenses of the deceased person's last illness and burial paid by the individual.

D. Operating policy — Life insurance proceeds

Prior to April 1, 1988, instructions provided that if the individual who received the proceeds of a life insurance policy was also the owner of that policy, the proceeds were a conversion of a resource and were not income. These instructions were not consistent with income policy and have been removed. Even though a life insurance policy may have been a resource in the past (i.e., the cash surrender value was a resource), at the time of the insured's death that particular resource ceases to exist. The insurance proceeds received as a result of the death are not a converted resource (i.e., the proceeds represent the death benefit payable not a return of the cash surrender value). This change is effective for initial claims filed on or after April 1, 1988. For redeterminations, it is effective the month after the month the first field-completed redetermination is initiated on or after April 1, 1988.

E. Operating procedure

1. Identifying death benefits

The SSI application and redetermination forms do not ask specifically about death benefits. Be alert for situations where further questioning about death benefits is advisable.

2. Verifying expenses

Verify all last illness and burial expenses. If verification (e.g., bills, receipts, contact with provider, etc.) cannot be obtained, accept the individual's statement either signed or recorded on a DROC. If an expense has been incurred but not paid, assume the individual will pay the expense unless you have reason to question the situation. No followup is required if the assumption is applied.

Use your judgment to determine whether an expense is reasonably related to the last illness and burial. It is expected that related expenses may include such items as: new clothing to wear to the funeral; food for visiting relatives; taxi fare to and from the hospital and funeral home; etc.

3. Amount of death benefits

Accept the individual's statement either signed or recorded on a DROC of the amount of death benefits and when received unless you have reason to doubt the allegation.

4. Income from death benefits

To determine the income derived from death benefits, subtract the total expenses from the total death benefits. Charge the income in the month the death benefit(s) is received. If death benefits are received in more than one month, assume that the funds first received are the first spent. For example, if the death benefits are $1,000 received in January and $1,000 in February and the allowable expenses are $1,500, charge the remaining $500 as income in February.

5. Manual notices - general

NOTE: If the individual is blind or visually impaired, see instructions at NL 01001.010 for more information on the special blind or visually impaired notice options.

When making input concerning the receipt of income which was not used for last expenses, suppress the systems-generated notice using instructions in SM 01301.675.

Prepare the appropriate manual notice, e.g., SSA-L8100-U2, SSA-L8025-U2, etc.

Use the general instructions for sending a manual notice in NL 00801.010.E. and the standard notice paragraphs from NL 00804.100 ff.

Use the appropriate variations of the special paragraph provided at 6. below.

6. Manual notices - special paragraph

Your Payment Is Based on These Facts

If you receive money, gifts, insurance or other payments because of a death, we will not count what you received against your SSI payments as long as it is spent on expenses related to the last illness or burial.

You (fill-in #1) (fill-in #2) (fill-in #3) in (fill-in #4).

You spent (fill-in #5) on expenses related to (fill-in #6) last illness or burial.

We must use the amount you did not spend on (fill-in #7) last illness or burial expenses in figuring your SSI payment. We are using (fill-in #8) of the money you received in (fill-in #9) to figure your payment for (fill-in #10).

Fill-ins:

1. inherited money amount received from

   received money amount received

2. null

   from source of gift, income, etc. (e.g., your daughter, your church, etc.)

   in life insurance on

   in stock certificates from

   fill in any other item or situation, as appropriate

3. name of deceased

   for expenses related to the death of name of deceased

   null

4. month and year in which recipient received the money

5. money amount spent

6. his/her

   individual's name, possessive, for example, Mr. Brown's

7. his/her

8. money amount

9. month and year in which the recipient received the money, e.g., July 1988.

10. month and year in which the income will be used to figure eligibility or payment amount, whichever is applicable.

NOTE: Repeat the first bullet as necessary, for each month the recipient received death-related income, gifts, etc. Repeat the last sentence of the last bullet as necessary, for each month we are using income.

F. Exhibit - manual notice

Supplemental Security Income

Notice of Revised Determination

                      Date: May 15, 1991

Name

Address                 Social Security Number: XXX-XX-XXXX

City, State ZIP Code

We are writing to tell you about a change in your Supplemental Security Income (SSI) payment. The following chart shows the SSI money due you for the month we changed. As you can see from the chart, we are only changing your payments for one month in the past. The rest of this letter will tell you more about this change.

Your Payment Is Changed as Follows:

Your Payment is Based on These Facts:

If you receive money, gifts, insurance or other payments because of a death, we will not count what you received against your SSI payments as long as it is spent on expenses related to the last illness or burial.

• You received $2,500.00 in life insurance on Charles Davidson in April 1991.

• You spent $2,000.00 on expenses related to his last illness or burial.

• We must use the amount you did not spend on his last illness or burial expenses in figuring your SSI payments. We are using $500 of the money you received in April 1991 to figure your payment for April 1991.

   

   

TURN THIS OVER IF YOU THINK WE ARE WRONG

YOUR RIGHT TO APPEAL

Do You Think We're Wrong?

If you think we're wrong, you have the right to appeal. A person who hasn't seen your case will look at it. That person will be an Administrative Law Judge. In the rest of our letter we'll call this person an ALJ. The ALJ will correct mistakes and look at any new facts you have before deciding your case. We call this a hearing.

• You have 60 days to ask for a hearing.

  The 60 days start the day after you get this letter.

  You'll have to have a good reason for waiting more than 60 days to ask for a hearing.

  You have to ask for an appeal in writing. We'll ask you to sign an SSA form HA-501, called “Request for Hearing.” Contact one of our offices if you want help.

   

How A Hearing Works

A hearing works like this.

• The ALJ will tell you the time and place for the hearing.

  The ALJ will explain the law in your case. The ALJ will state the known facts and tell you what has to be decided.

  You can tell the ALJ why you think we're wrong. You can give the ALJ more facts. And you can bring people to say why you're right.

  The ALJ can make people come to your hearing and bring important papers. You can question these people at your hearing.

  We'll ask if you want to go to the hearing in person. If you say you want to go, you should attend if at all possible. If you change your mind or if you can't get to the hearing, you should tell us. You should know that your being there may help the ALJ decide your case.

   

If You Want Help With Your Hearing

You may want help from a friend, lawyer or someone else. There are groups that can find you a lawyer. Some can give you a free lawyer. We can give you the names of these groups.

                         XXX-XX-XXXX

04/15/88                       Page 2

Things to Remember

• This decision refers only to your claim for Supplemental Security Income payments.

• This determination replaces all previous determinations for the above period.

• We may be in touch with you later about any payments we previously made.

   

If You Have Any Questions

If you have any questions, you may call us at (111) 222-3333. We can answer most questions over the phone. You may also write or visit any Social Security office. The office that serves your area is located at:

Street Address
City/State/ZIP Code

If you do call or visit an office, please have this letter with you. It will help us answer your questions. Also, if you plan to visit an office, you may call ahead to make an appointment. This will help us serve you more quickly when you arrive at the office.

                          Manager's Name

                          Title