Obviously, minor children normally aren’t working and contributing to the Social Security program toward their future retirement, but that doesn’t mean Social Security isn’t there to protect them.  

In real life, there are two main situations where minor children can collect Social Security benefits based upon a parent’s earnings record – 1) if the parent is living and collecting their personal Social Security retirement (or disability) benefit, or 2) if a parent is deceased and was eligible for Social Security benefits.

This is a real life story about minor children who are the surviving dependents of a parent entitled to (but not necessarily collecting) Social Security retirement or disability benefits.

Minor Child Benefits from a Deceased Parent

Three young sisters

Cheryl and Bernie had three little girls – Jennifer (8); Rebecca (6); and Danielle (4). Bernie was a corrections officer, and Cheryl was an Administrative Assistant for a prestigious local law firm. But one day while battling a bad cold, Cheryl developed a severe, debilitating headache and went to the local hospital Emergency Room for treatment. Turned out Cheryl had bacterial meningitis, an infection which caused her brain to swell, putting her into a deep coma from which she never recovered. Cheryl succumbed several days later at 35 years of age, leaving behind a devastated family including her three young daughters.   

The trauma was obviously severe for Cheryl’s entire family, but through the dark cloud of the family’s loss, Social Security was there. Although Cheryl had been in the workforce only about a dozen years, she had been contributing to Social Security from her earnings during those years, thus entitling her surviving minor children to Social Security benefits from Cheryl’s earnings record.   

As Cheryl’s surviving spouse, Bernie contacted the Social Security Administration and applied for surviving minor child benefits for each of his girls, which were readily approved after Bernie provided Cheryl’s death certificate and his daughters’ Social Security Numbers to the Agency. And though it could never make up for the loss of their mother, each of Cheryl’s daughters shared a portion of the Social Security benefit Cheryl had earned up to the day she died.

How much did each of Cheryl’s children get?  Well, the maximum benefit available to a surviving minor child is 75% of the deceased parent’s full entitlement, but whenever there are multiple dependents a Family Maximum applies. Each of Cheryl’s children received an equal portion of Cheryl’s personal Family Maximum. And although each received less than 75% of Cheryl’s earned entitlement, each child collected their share until they were 18 years of age (thus no longer minors).[1]  

Bernie was appointed Representative Payee for each of his girls and was obligated to use funds received only for the girls’ behalf, which Bernie chose to do by creating a college (“529 plan”) savings fund for each girl into which each child’s Social Security benefits were deposited.

Jennifer’s minor child benefits stopped when she became 18 and, at that time, Cheryl’s Family Maximum was shared only by Rebecca and Danielle (making each of their payments higher). And when Rebecca became 18, Danielle received her full 75% of Cheryl’s earned entitlement. Monies accumulated over the years were saved and used to help fund each girl’s college tuition.

As an aside, Bernie – still in his late 30s – was technically entitled to Social Security “child in care spouse benefits” but could not collect that benefit because he continued to work full-time. Further, Bernie claiming child-in-care spousal benefits would have only detracted from the amount his daughters could collect because the total amount of benefits paid by Social Security were limited by the Family Maximum.

The rest of the story: Although SS benefits were paid to Bernie as Representative Payee, that additional money did not impact Bernie’s income tax obligation. The Social Security money was used for the children’s benefit (even saving it counts), so is not taxable by the IRS.

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[1] Minor children can collect benefits until they are 18 years of age, or up to 19 if they are still in High School.