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The “lump sum death payment” that won’t pay for flowers today

It’s precisely because so many people know about the one time $255 payment that Congress has been unable to eliminate it to save money in the Social Security program.  But, as Tom Margenau explains, there is much misunderstanding about this payment, which was supposed to be temporary and one that has been fixed at $255 since 1954.  Part of the original thinking in 1935 was that many of the new Social Security taxpayers would die before they ever had a chance to collect benefits or would die without having earned enough “quarters of coverage” to be insured for survivor benefits for dependents. Thus Congress  decided to compensate the family of a loved one who died with some form of reimbursement for the Social Security taxes that the deceased had paid into the system.  A one-time benefit called the “lump-sum death payment” was originally intended to reimburse the family with an amount equal to 3.5% of the money the deceased had paid into the system.  To gain the full history and perspective on the payment, read full piece here.


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