Goodbye to Social Security Benefits for Thousands of Americans This Year – The Worst News Has Been Confirmed

The Social Security Administration (SSA) provides benefit to many collectives of people, one of them being children of deceased workers. In some cases, when a worker passes away prematurely and has unmarried children that fit some criteria, these can be considered for Survivor or Family benefits.

But these benefits don’t last forever, and, in some cases, they are cut short. Data shows that just this year, approximately 30,000 children of deceased workers lost eligibility for benefits. While this sounds bad, not all of them have lost eligibility for nefarious reasons, but it is worth looking at this as a case study. In January, about 2.04 million children were receiving these benefits. By July, that number had dropped to about 2.01 million, resulting in the removal of about 30,000 children from the program.

Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, noted how this situation can be confusing to many, who expect that these beneficiaries are covered forever. “This has been a topic of confusion over the past few months, and for good reason. We’ve seen a decline in many subgroups of Social Security beneficiaries, including children of deceased workers, but it’s unclear why the decline has occurred, and the administration has not responded to questions about it.”

Why might these Social Security family or survivor benefits end?

The most obvious reason for the benefits to end is that beneficiaries have aged out of the system. They may be receiving other benefits but no longer classified as children. For both Survivors and Family benefits children need to meet the following criteria according to the SSA:

• Be unmarried
• Be age 17 and younger, or
• Be ages 18–19 and in school (K–12) full time, or
• Or be any age if they developed a disability at age 21 or younger.

Another possibility, if slightly less pleasant is that the SSA has determined that the family no longer fit the program’s criteria. Kevin Thompson, a financial expert and founder of 9i Capital Group, pointed out that factors such as income or changes in a child’s status could lead to a loss of benefits. “There are income thresholds that they may need to maintain, and if the income threshold goes over those limits, the earnings test can kick in and benefits can be reduced or eliminated.”

The change in income is the most notable reason, as if a surviving parent decides to take an additional job to support their family, it could affect their child’s eligibility.

But declining birth rates along with children aging out of the system is probably the most realistic reason, as according to Thompson “It’s a delicate balance for something that is actually owed to you, especially if you have a child under the age of 18, I haven’t seen a push to reduce the number of children receiving these benefits, while many of the children are likely aging out of the program, and with lower birth rates of Gen Y and Gen Z, we may continue to see this occur.”

This might explain why these benefits have not been eliminated equally in every state. In places where births are higher, as children age out, they are replaced by those who come into the program, whilst in states with lower birth rates, the replacements are not as many. Beene theorizes that this is an issue with reporting rather than an issue with benefits themselves “We also know that not every state is seeing these reductions in the same numbers. Some states have seen no change in beneficiaries, while others have seen significant cuts. This may indicate an issue at the state level with how data is being handled, and how corrections are being made by Social Security on the back end.”

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