Social Security Benefits for Grandchildren

In 2012 there were 2.7 million grandparents who had primary responsibility for a grandchild under the age of 18, according to a recent US Census Bureau report. Many of these grandparents don’t know that Social Security retirement benefits for dependent grandchildren is a real possibility.

Social Security Benefits for Grandchildren

Retirement doesn’t always go as expected. It hasn’t for the Causey’s. Instead of the frequent traveling they had always planned for their retirement, they are raising their young grandchildren. There’s no sense of burden though, they strongly believe it’s a privilege to have the mental, financial, and physical health that affords them the chance to offer security to their grandchildren. I admire their attitude! I hope that I would feel the same if I were placed in their situation.

Although the Causey’s had a well thought out retirement income plan, they’ve quickly discovered that the extra expense of raising kids will require them to increase their monthly cash flow. They were surprised when I advised them to file for Social Security benefits immediately. They had always planned to wait until full retirement age to file for benefits, but that all changed when they found out that by filing for their own benefits, they would turn on Social Security benefits to their dependent grandchildren as well.

It’s not one of the more well known benefits, but under the right conditions grandchildren (or step-grandchildren) can receive a benefit based on the work history of a grandparent. The Social Security Handbook spells out the requirements in their typical murky fashion.

A dependent grandchild or step-grandchild of the worker or spouse may qualify for benefits as a “child” if:

    1. The grandchild’s natural or adoptive parents are deceased or disabled:

        1. At the time the worker became entitled to retirement or disability insurance benefits or died; or

       

      1. At the beginning of the worker’s period of disability which continued until the worker became entitled to disability or retirement insurance benefits or died; or

 

  1. The grandchild was legally adopted by the worker’s surviving spouse in an adoption decreed by a court of competent jurisdiction within the U.S. The grandchild’s natural or adopting parent or stepparent must not have been living in the same household and making regular contributions to the child’s support at the time the insured worker died.

Besides meeting the requirement in (A) or (B), the grandchild or step-grandchild must be dependent on the insured as described in § 336.

Although that sounds technical, these rules are fairly easy to understand. There are two main rules.

Rule #1

The grandchild (or step-grandchild) must be a dependent.

It’s important to note that Social Security’s definition of dependent is as follows:

To be dependent on the worker, a grandchild (or step-grandchild) must have:

    1. Begun living with the worker before the grandchild became 18 years old; and

 

  1. Lived with the worker in the U.S. and received at least one-half support from the worker:

      1. For the year before the month the worker became entitled to retirement or disability insurance benefits or died; or

     

    1. If the worker had a period of disability that lasted until he or she became entitled to benefits or died, for the year immediately before the month in which the period of disability began.

If the grandchild was born during the one-year period, the worker must have lived with and provided at least one-half of the grandchild’s support for substantially all of the period from the date of the grandchild’s birth to the month indicated in (B) above.

Essentially, the Social Security administration has taken the normal definition of dependent and added the additional requirement of living with the grandparent for at least one year prior to filing for benefits.

Rule #2

So far, it sounds pretty easy. Unfortunately, this next rule is what disqualifies many grandparent/grandchild households from grandchildren’s benefits.

To qualify for Social Security benefits, one of the following must be correct.

A) Both parents are disabled or deceased

or

B) You are the legally adoptive parent of the grandchild.

 

How Much Is The Benefit?

Children (or grandchildren in this case) are generally eligible to receive an amount equal to 50% of your full retirement age benefit, up to a “family maximum” benefit. The family maximum varies, but is equal to 150 to 180 percent of your full retirement age benefit. Here’s how they figure the Formula For Family Maximum Benefit.

For example, if your full retirement age benefit is $2,000, the maximum benefits that can be paid on your work record is $3,498.  For those raising kids, that extra $1,498 will be welcomed.

Why Is This Important?

For a household with grandchildren, extra care and expertise should be applied when applying for Social Security. The penalty for not understanding the rules and the resulting difference in lifetime benefits can be enormous.

Consider the difference in lifetime benefit amounts for a couple with the following circumstances.

Social Security Benefits Grandchild

-Full Retirement Age Benefits: $2,000 for one spouse & $1,000 for the other spouse.

-Two grandchildren ages 8 & 10.

In the first example, they simply waited to file at full retirement age. Over the course of their lifetime (through age 85) they received $874,705 in Social Security benefits. These were benefits paid on their own work record only.

In the next example, they filed for benefits at age 62! Why? It’s because the benefits to the grandchildren are not available without the grandparent filing first.

In many cases, delaying your filing age is a smart move for multiple reasons. But not all cases are the same! In this case they were able to collect an additional $111,920 in lifetime benefits by filing early and turning on the benefits to their grandchildren.

I hate one size fits all Social Security advice. A situation like this illustrates that filing strategies are dependent on individual circumstances. Before you make a filing decision, make sure you understand your options.

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Devin CarrollRay ScahefferJoan SnyderChristineDean Phillips Recent comment authors
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Ray Scaheffer
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Ray Scaheffer

Would a curt ordered full custody of a grandchild work as well as an adoption?

Joan Snyder
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Joan Snyder

I can raising my grandchild. He receives SSI. I am 73 I have been raising him for the last 11 years. Can he get any of my social security? Also his DaD recently died. I have legal custody of him.

Christine
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Christine

Im searching for an answer in that my ex husband of 12 yrs just passed away….we have a set of 23yro twins….i have been collecting SSD benefits for myself for 5 yrs….am i still able to receive any death benefits w/o removing/deducting from my current benefits…he was still paying out of his checks back CS until he became ill about 6 months ago….i did assist our girls in helping him file for disability….his application was submitted by phone on March 12….all required documents have been submitted…but application had not been approved prior to his death…

Dean Phillips
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I thought it was interesting how you said that social security benefits could potentially apply to dependent grandchildren. My father just turned 65. It may be good for him to talk to someone about getting social security insurance.

sdenison
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sdenison

Can a 17 year old child in Michigan leave home and receive their soc sec benefit check (due to one of their parents being deceased) in their own name?

Lisa mull
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Lisa mull

I just got guardianship of my two grandsons ages 4&8 their dad passed away recently mom isn’t in the picture do they qualify for SSI

alfredo
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alfredo

I am receiving SSI, still working, I have a grand child living with me as legal guardian, fatherless, mother was living outside US, she’s 16 years old full student.

Billy
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Billy

I am currently married,63 years old and have a 10 year old daughter. Wouldn’t it be the right decision to retire and start drawing my SS now?My wife is 60 years old and still working also. I would also have a pension and 401K.

Toni Cooper
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Toni Cooper

I have legal guardianship of 4 grandchildren. Their father is in prison and their mother is indigent. We have had guardianship for 2 years and my husband will begin retirement next month. Why shouldn’t our grandchildren qualify for SS benefits. We get no financial help state or otherwise for them.

Linda
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Linda

I have had custody of 3 grandchildren for 8 years. My husband of almost 25 yrs. passed away 2 years ago. 1 of the children’s father passed away about 3 years ago are there any benefits that might be available for us. The oldest is now 20yrs. the other two are 13 and 15 years old.

Kim
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Kim

I have 2 grandchildren I have adopted can I receive any money for them when I retire at 62

Adriana Adames
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Adriana Adames

I have 2 grandchildren that have lived with us for 7 yrs after being taken from parents through Child protective services,since then parents signed away rights and we have full custody .We receive a small check for each child from the state.Do they qualify for benefits under my husband’s SSD?

Paula
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Paula

I believe this law needs reviewed for many grandparents have “court appointed” guardianship for many reasons and it is very difficult to get by with the little amount paid by the state. I have had legal guardianship since birth of my 14 year old grandchild. Raised her as my own and on my own. She has nobody else to depend on and I believe she should be entitled to a portion of my benefits especially if I pass before she is 18 and graduated. I will pay for her graduation help with her 1st car and try to help with… Read more »

Rita simmons
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Rita simmons

I have temporary custody of my grandson he’s been with me since birth can I get as income for him I’m on disability

lisa hall
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i have permanent coustody of two grandkids do i qualify

Kate Blackshire
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Kate Blackshire

I too am a grandparent in need of information. I have been taking care of two grandchildren for more than two years. The father has not been in their life for more than 9 years and their Mom cannot provide a stable home or basic needs. We live off of my Disability Social Security income and my Husband’s retirement. He is 90 years old so his pension is small. Do I qualify for any help?

Courtney
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Courtney

Hi I’m considered a disabled adult minor and I collect servivor bennifits under my dad who is dead I’m trying to find out if my two children who were born after my dad was deacesed would qualify for bennifits under him also based off my being disabled ???

Denita
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Denita

Same situation as Bob.Would like to kmow how it works with Full Permanent Gaurdianship of child.

Maness Bob
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Maness Bob

Is legal guardianship satiafy the adoptive parent requirement. I am the legal guardian and grandfather. The parents are both drug addicts. The mother has no address and has been in no contact for 2 years. The father is in and out of rehab and does not work or live nearby. He has never contributed financially to the child. The child is 5 1/2 years and has lived with us since 6 months old.