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Social Security: 3 Ways Children Can Qualify

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Social Security income isn't just for retirees.


Image: Social Security Administration.

Social Security helps tens of millions of Americans make ends meet in retirement. What many people don't know is that Social Security also helps many children of retirees with much-needed benefits as well.

To help readers understand this little-known aspect of Social Security, we asked three of our Motley Fool contributors to discuss various ways children can qualify for benefits. Take a closer look and see if your family can qualify for benefits you didn't know existed.

Selena Maranjian
This may not be the most pleasant scenario to consider, but children can qualify for Social Security income if one or both of their parents die. You may be aware of Social Security's survivor benefits for spouses, but there are also survivor benefits for children.

A surviving child will typically receive up to 75% of what the deceased parent (or the parent with the higher benefit) would collect as a retirement benefit. There's a family cap, though, so if there are multiple children, they may not each collect the full 75%.

To be eligible, children need to be under 18, though they can be as old as 19 if they're still attending secondary school on a full-time basis. They can be natural children of the deceased, adopted children, or dependent stepchildren. Also eligible are children aged 18 or older who have a disability that began before age 22.

There are more rules, of course. The deceased parent must have accumulated enough Social Security "credits" by working long enough in a job where they paid Social Security taxes. Most of us need 40 credits to qualify for Social Security benefits. We can earn up to four credits per year, and in 2015, each $1,220 of qualified earnings will get you a credit, so only $4,880 is needed for four. Those may seem like easy criteria to meet, but note that you'll need at least 10 years of work to get those 40 credits. If a parent dies young, he or she may not have collected 40 credits yet. If so, all is not lost, because the Social Security Administration has lower thresholds for those who die young.

Losing a parent is a cruel twist of fate, but for many kids, at least there's a small silver lining in the form of financial support from Social Security.

Sean Williams
Social Security was put in place to protect America's low-income retirees, the disabled, and survivors of eligible Social Security recipients. However, it can also provide your children with ample income if you and they qualify.

For a retired worker to qualify, he or she must have earned 40 credits, as Selena discussed. But a retiree's dependent children can also qualify to receive as much as 50% of the full benefit the retiree is receiving. As the Social Security Administration notes, children qualify if they are:

  • Unmarried;
  • Younger than 18;
  • Up to 19 and a full-time high school student; or
  • 18 or older and disabled before the age of 22.

Note that these rules could apply to more than just a biological child. Adopted children and even dependent stepchildren can qualify. Additionally, in select instances, grandchildren may qualify to receive up to half their grandparents' benefits if the grandparent is their legal guardian.

The best part about the ability of children to receive benefits is that it doesn't count against the parents' (or grandparents') full retirement benefit. In other words, an eligible retiree and his or her children could be eligible to receive combined benefits of 150% to 180% of the primary retiree's full benefit. Given the average retiree benefit of $1,334, this can more than $1,000 in additional benefits for a qualifying family with kids.

That extra money, even for a few years, can make a huge difference.

Dan Caplinger
As Sean describes, children can receive Social Security benefits under certain circumstances. It's relatively rare for minor children to qualify, simply because few parents old enough to receive benefits have kids young enough to get children's benefits.

Where Social Security benefits are really helpful is with disabled adult children of retirees. Under the rules, so long as the child was disabled before the age of 22, an adult child can receive children's benefits based on a parent's work history. The Social Security Administration applies its typical definition of disability, requiring that a person is unable work in their previous occupation and unable to adjust to other types of work due to their disabling condition.

Bear in mind, though, that these benefits can get complicated in a hurry. For one thing, children who already receive benefits because of their disability -- such as Supplemental Security Income or Social Security Disability Income payments -- have to figure out whether claiming under their parents' work record will lead to a better result. In addition, if the disabled person gets married, benefits generally end, although some marriages are considered protected and do not lead to a halt in payments.

In all, providing Social Security benefits for disabled adult children of retirees is an important aspect of the social-insurance nature of the program. It's not the most commonly used benefit, but for those who need it, it can make a huge financial difference.

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