Ask Rusty – Widow Stung by Social Security’s “Claw Back” Rule

Dear Rusty: My husband of 48 years died on December 30^th, and he received a Social Security direct deposit for December’s benefits in early January, but Social Security demanded the bank return his December payment. I used part of his December benefits to pay for household expenses, so his bank account was overdrawn after his bank paid back his Social Security for the December benefit. My questions are:

1. Is it legal for Social Security to demand a return of his benefits because he died one day prior to 1/1/2023? That just seems so wrong to me!

2. Am I legally responsible for the overdrawn amount his bank repaid to Social Security? I was not notified by Social Security or his bank before “the deed was done”.

3. Aren’t there Social Security spousal benefits available for the surviving spouse, and how do I apply for them? (Form #, please)

My husband medically retired early, and his Social Security benefits were always lower than mine, but I fear that my benefits may be affected by his death. Is that true? Signed: Grieving Widow, Feeling Wronged

Dear Grieving Widow: Please accept our sincere condolences on your husband’s passing. Unfortunately, I don’t have good news for you about his December benefit payment. Social Security pays benefits in the month following the month they are earned, and the recipient must live the entire month to be eligible for that month’s benefit. Even though your husband lived until almost the end of the month, Social Security’s rule says that he must live the entire month to be eligible for December benefits; thus, they took back (often referred to as “Clawed Back”) the December benefits paid in January.

So, is all of this legal? Yes, I’m afraid it is. From what you’ve shared Social Security took back the money they are legally entitled to, so you have no further obligation to Social Security. The bank had no choice but to return your husband’s December Social Security payment – they were legally obligated to do so. Thus, your obligation to resolve your husband’s overdrawn bank account resulting from the bank fulfilling its legal obligation to Social Security still remains.

As for any spousal or survivor benefits you might be entitled to – you say your husband’s Social Security payment was less than yours, which means you weren’t getting a spousal benefit and cannot get a surviving spouse benefit as a widow (you can only get your benefit or his, whichever is higher). You will, however, be eligible for a one-time lump sum death benefit of $255. I know it’s not much, but you’re entitled to it and should claim it. And, from what you’ve described – that your monthly Social Security amount is more than your husband’s – your own benefit will not be negatively affected by any of this.

This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (amacfoundation.org/programs/social-security-advisory) or email us at [email protected].