SSR 70-3: SECTIONS 204 and 216. -- UNDERPAYMENT -- PRIORITY OF PAYMENT TO STEPCHILDREN OF DECEDENT

20 CFR 404.503

SSR 70-3

J, a beneficiary under title II of the Social Security Act, died before

social security benefits due her were paid. Under section 204 of the Act,

the amount unpaid at the time of her death became an underpayment. She was

survived by her parents as well as her two stepchildren were entitled to

social security benefits for the month of her death. A request for payment

of the underpayment to J's two minor stepchildren has been filed on their

behalf. J's parents have also requested the underpayment, contending that

the relationship between J and her two stepchildren ended upon J's death

and therefore the underpayment should be paid to them.

Section 204(d) of the Social Security Act provides that amounts due to

deceased beneficiary under the retirement, survivors, and disability

insurance programs, will be paid to individuals according to the following

order of priority: The deceased beneficiary's (1) spouse either living in

the same household at the time of his death, or entitled to a monthly

benefit on the same earnings record for the month of his death; (2) child

or children entitled to a monthly benefit on the same earnings record for

the month of his death; (3) parent or parents entitled to a monthly

benefit on the same earnings record for the month of his death; (4) spouse

not falling within the provisions of (1) above; (5) child or children not

falling within the provisions of (2) above; or (6) parent or parents not

falling within the provisions of (3) above, payment will be made to the

"legal representative" of the estate of the deceased beneficiary.

At issue here is whether the stepchildren or the parents are entitled to

receive the underpayment. This depends on whether the term "child or

children" in (5) above includes stepchild or stepchildren of the deceased

beneficiary. Section 216(e) of the Act makes clear that it does, as

follows:

* * * * * * *

be made to the

"legal representative" of the estate of the deceased beneficiary.

At issue here is whether the stepchildren or the parents are entitled to

receive the underpayment. This depends on whether the term "child or

children" in (5) above includes stepchild or stepchildren of the deceased

beneficiary. Section 216(e) of the Act makes clear that it does, as

follows:

* * * * * * *

Since section 216 defines "child or children" for the purposes of

title II, it is reasonable to assume that Congress had that definition

in mind when they enacted section 204(d) and intended to include a

"stepchild" within the meaning of "child." However, even if section 216(e)

did not so clearly include "stepchild" in the definition of "child," a

stepchild of the decedent could not, for the reasons outlined below, be

accorded a lower priority than a parent with respect to receiving an

underpayment under section 204(d). Section 202(d) of the Act, providing

for children's benefits, permits an insured individual's stepchildren to

qualify for monthly benefits on his earnings record while he is living as

well as when he is deceased. A parent, on the other hand, may qualify for

monthly benefits under section 202(h) of the Act on an insured's earnings

record only when the insured is deceased. Thus, Congress did not consider

it anomalous (with respect to the more significant monthly benefits) to

accord an insured's stepchildren more favorable treatment with respect to

the payment of benefits than his parents.

deceased. A parent, on the other hand, may qualify for

monthly benefits under section 202(h) of the Act on an insured's earnings

record only when the insured is deceased. Thus, Congress did not consider

it anomalous (with respect to the more significant monthly benefits) to

accord an insured's stepchildren more favorable treatment with respect to

the payment of benefits than his parents.

Monthly benefit payments to a stepchild are not terminated upon the death

of the worker, i.e., the steprelationship on which benefit rights are

predicated is not considered terminated by the worker's death. Thus, as

indicated in section 216(e) above, the term "child" includes a "stepchild"

if the insured individual is deceased. Nor does the death of a spouse end

the parent-step-child

relationship. [1] Therefore, in

the absence of statutory language to the contrary, an insured worker's

death does not terminate a steprelationship for purposes of the right to

receive a title II underpayment. Accordingly, the term "child" or

"children" in section 204(d) (5) includes a stepchild or stepchildren.

Therefore, it is held that J's stepchildren have a higher priority

of entitlement (5) than that of her parents, who could qualify under

priority (6) above.

[1] See SSR 69-66, C.B. 1969, p.

168, for a discussion of the effect of death on step relationship in a

title XVIII situation.