Social Security benefits for grandchildren

In some cases, dependent children are eligible for Social Security based on their retired, disabled or deceased grandparent's benefits

Apr 5, 2018 @ 11:25 am

By Mary Beth Franklin

Perhaps it is a sign of the times, but I have noticed an uptick in questions from InvestmentNews readers about the possibility of grandchildren being able to collect Social Security benefits on their grandparent's earnings record. In some cases, they can, but the rules are very specific.

"I was with a client today and he and his wife have full custody of their grandson," one financial adviser from White Plains, N.Y., wrote to me in an email recently. "If he started taking Social Security, would his grandson be entitled to Social Security benefits? Or would they need to fully adopt him in order for the grandson to receive this benefit?"

As with many of Social Security's confusing array of more than 2,700 rules, the answer is "it depends."

"If a child is not receiving benefits from a parent when the grandparent retires, becomes disabled or dies, the grandchild may be able to qualify for benefits if certain conditions are met," the Social Security Administration states on its website. "Generally, the biological parents of the child must be deceased or disabled or the grandchild must be legally adopted by the grandparent."

To qualify for dependent benefits, the grandchild must have begun living with the grandparent before age 18 and received at least one-half of his or her support from the grandparent for the year before the grandparent became entitled to retirement or disability benefits or died, the agency explained. However, if the grandparents are already receiving benefits when they become responsible for the grandchild, they would need to adopt the child before he or she could qualify for Social Security benefits.

Last year, the Social Security Administration distributed an average of $2.6 billion in benefits each month to about 4.2 million children of parents or grandparents who are disabled, retired or deceased. To qualify for benefits, a child must be unmarried and under age 18 (or 19 if still in high school), or age 18 or older with a disability that began before age 22. Under certain circumstances, Social Security also can pay benefits to a stepchild, step-grandchild or adopted child.

Nationwide, about 2.5 million grandparents report they share a household with their grandchildren and are responsible for their needs, according to Census Bureau data. The numbers of grandparent-led households have increased in recent years, partly due to the national opioid crisis that has robbed children of their homes and parents, leaving their grandparents to pick up the pieces.

"Too often, moms and dads are falling victims to the epidemic and grandparents are stepping in to care for the children," Sen. Bob Casey, D-Penn., said during a February hearing by the Senate Health, Education, Labor and Pensions Committee on the impact of the national opioid crisis on children and families.

"For grandparents, it can dramatically alter their life plans," Mr. Casey said. "They postpone their retirement and keep working longer to be able to afford school clothes, child care and food, and some deplete their nest eggs and retirement savings to finance these new costs."

"Grandparents stepping up to take on the role of primary caretaker of their grandchildren deserve our support," he said.

In March, the Senate passed the Supporting Grandparents Raising Grandchildren Act co-sponsored by Sens. Casey and Susan Collins, R-Maine. Both of their states have been hard hit by the opioid crisis. The bill would create a federal task force to coordinate and disseminate information about critical resources on legal custody, social services, mental health counseling and other vital programs to assist grandparents raising their grandchildren. The bill must still pass the House before it can become law.

A child can receive up to half a parent's or grandparent's full Social Security retirement or disability benefit. If the child receives survivor benefits, they can get up to 75% of a deceased parent's (or grandparent's) basic Social Security benefit. But there is a limit to the amount of money a family can receive based on a worker's earnings record.

The family maximum benefit limit ranges from 150% or 180% of a parent's or grandparent's full benefit amount. If the total amount payable to all family members exceeds this limit, each dependent's benefit is proportionately reduced until the total equals the maximum allowable amount. The worker's benefit is never reduced.

0
Comments

What do you think?

View comments

Recommended for you

Upcoming Event

Oct 23

Conference

Women Adviser Summit - San Francisco

The InvestmentNews Women Adviser Summit, a one-day workshop now held in four cities due to popular demand, is uniquely designed for the sophisticated female adviser who wants to take her personal and professional self to the next level.... Learn more

Featured video

Events

InvestmentNews celebrates diversity & inclusion in the financial advice business

Highlights of the Excellence in D&I Awards, showcasing the achievements of 26 individuals and firms that are moving the needle when it comes to diversity and inclusion.

Latest news & opinion

SEC commissioner Stein suggests Congress address differing broker, adviser standards

She said lawmakers may have to change 'solely incidental' language that lets brokers give advice.

7 things advisers should do today to boost diversity and inclusion

Creating diversity and inclusion within financial advice firms is challenging, but these InvestmentNews Excellence in Diversity & Inclusion award winners have suggestions that firms can put into practice today

The midterm elections: What's at stake for financial advisers

A shift in control of the House could change the course of important issues, including the SEC advice rule, tax reform and retirement policies.

What to tell your clients after they've won the lottery

The current combined Mega Millions and Powerball jackpots are more than $850 million. What should you tell your clients if they have a winning ticket?

2019 Medicare premiums announced

Slight increase in Part B premium to $135.50 per month is in line with expectations.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print