Requirements The Employee Must Have Met

The Railroad Retirement Board (RRB) can pay a lump-sum death payment only if the employee:

• was employed in the railroad industry for at least 120 months; or at least 60 months after 1995; and
• had a current connection with the railroad industry; that is, there was no regular employment outside of the railroad industry between the time when the employee left the railroad industry and the time of retirement (or death if the employee never retired).

If the employee was alive on October 1, 1981, we will consider that there is a current connection with the railroad industry, if the employee:

• stopped working in the railroad industry involuntarily and without cause on or after October 1, 1975; and
• had at least 25 years of service; and
• did not decline an offer to return to work in the same class or craft as his or her last railroad service.

What Happens If The Employee Does Not Meet The Requirements

If the employee does not meet the requirements described in the section, Requirements The Employee Must Have Met, the RRB cannot pay you a lump-sum death payment. However, the Social Security Administration (SSA) may be able to pay you if you are the widow(er) who was living in the same household as the employee. Your application will be transferred to that agency.

A lump-sum death payment can be paid by either the RRB or SSA but not by both, even though the employee may have received payments from both agencies.

Definition Of A Lump-Sum Death Payment

A lump-sum death payment is meant to help defray the costs of the employee’s burial expenses. It can only be paid to a widow(er) who was living with the employee when he or she died or to the person who paid all or part of the employee’s burial expenses. The lump-sum death payment cannot be paid if anyone is eligible for monthly survivor benefits in the month of the employee’s death. A lump-sum death payment is not taxable for Federal income tax purposes.

There are two different types of lump-sum death payments.

• A 1937 Act Lump-Sum Death Payment is payable if the employee was employed for at least 120 month in the railroad industry prior to January 1, 1975. This benefit is based on the employee’s earnings and ranges between $180.00 and $1400.00. Refer to the section, People Eligible To Receive A 1937 Act Lump-Sum Death Payment, for additional information.
• A 1981 Amendment Lump-Sum Death Payment is payable if the employee did not have 120 months of service in the railroad industry before January 1, 1975. This benefit is limited to $255.00. Refer to the section, People Eligible To Receive A 1981 Amendment Lump-Sum Death Payment, for additional information.

Credit For Employee’s Military Service

If the employee was never in the military service, go on to the next section.

If the employee ever served in active duty in the United States Armed Forces, the RRB may be able to use that military service to increase the amount of the lump-sum death payment or residual lump-sum payment. Proof of military service must be submitted if it has not already been submitted by the employee. Refer to the section, Proof Of Military Service, for information on acceptable proof of military service.

People Eligible to Receive A 1937 Act Lump-Sum Death Payment

If the employee was survived by a widow(er) who was living with the employee, the entire lump-sum death payment is paid to the widow(er).

If no widow(er) qualifies and all of the employee’s funeral expenses have not been paid, the lump-sum death payment is paid to the funeral home. If the unpaid funeral home expenses are greater than the lump-sum death payment, the entire lump-sum death payment is paid to the funeral home.

If the unpaid funeral expenses are less than the lump-sum death payment, only the amount of the lump-sum death payment equal to the unpaid expenses will be paid to the funeral home.

If there are no unpaid funeral home expenses, or if the unpaid expenses were less than the total lump-sum death payment, the remaining amount of the lump-sum death payment can be paid to the person(s) whose money was used to pay any portion of the burial expenses. A "person" can include:

• an individual;
• a partnership;
• a trust;
• a corporation;
• a government unit;
• the estate of the employee.

If more than one person pays the burial expenses, the lump-sum death payment will be paid first to the person who paid the funeral home expenses. If any of the lump-sum death payment remains, the remaining portion will be paid in the following priority:

• The person who paid the grave opening and closing expenses.
• The person who paid for the burial plot.
• The person who paid any remaining burial expenses.

If more than one person pays the same type of expense, a share of the lump-sum death payment will be paid to each person who paid the expenses. The shares will be proportional to the amount of the expenses paid by each person. Under no circumstances will any person receive a lump-sum death payment which is greater than the amount which was paid by that person.

When The 1937 Act Lump-Sum Death Payment Can Be Paid Directly To The Funeral Home

There are two situations in which the lump-sum death payment can be paid to the funeral home:

• The person who assumes responsibility for the unpaid funeral home expenses can apply for the lump-sum death payment and instruct the RRB to make payment to the funeral home.
• A representative from the funeral home can apply for the lump-sum death payment directly. However, the application filed by the representative on behalf of a funeral home must be filed at least 90 days after the day the employee died and no one has assumed responsibility for the expenses.

In either case, the funeral home must complete Form G-273a, Funeral Director’s Statement Of Burial Charges. (See the section, "Form G-273a, Funeral Director’s Statement Of Burial Charges.")

People Eligible To Receive A 1981 Amendment Lump-Sum Death Payment

A "1981 Amendment" lump-sum death payment is payable only to the widow(er) who was living in the same household with the employee at the time of the employee’s death.

When A Lump-Sum Death Payment is Not Payable

The "1937 Act" or "1981 Amendment" lump-sum death payment cannot be paid if there is any survivor of the employee who is eligible for a railroad retirement annuity in the month the employee died.

In addition, a lump-sum death payment can only be paid if an application is filed by the second anniversary of the employee’s death. If no application for the lump-sum death payment or a monthly benefit is received by that date, the lump-sum death payment cannot be paid.