Children's Benefits—AnnuitiesPublished: Wednesday, March 07, 2012
The children of deceased federal employees and retirees are entitled to a number of benefits. Among these is a survivor annuity, which is payable even if you didn't elect a survivor annuity when you retired.
To be eligible, your child must be an unmarried dependent under 18 years of age. The term dependent includes 1) an adopted child, 2) a stepchild (but only if the stepchild lived with you in a regular parent-child relationship), 3) a recognized natural child, and 4) a child who lived with and for whom a petition for adoption was filed by you and who is adopted by your surviving spouse after your death.
The age 18 limit is waived for an unmarried dependent child between age 18 and 22 years of age who is a student regularly pursuing a full-time course of study or training. It is also waived for a dependent child who is incapable of self-support because of a mental or physical disability incurred before age 18, as long as he or she remains both incapable of self-support and unmarried. I'll have more to say about that next week.
The rules governing the annuity payments to children are the same for CSRS and FERS employees and retirees. However, the annuity payments to a child of a CSRS-Offset or FERS employee/retiree will be reduced by the amount of the Social Security benefit payable based the employee/retiree's Social Security-covered federal service.
The annuity payable is based on a formula that is increased whenever there is a retiree cost-of-living-adjustment (COLA). In 2012, when a child has a living parent who was a current or former spouse of the deceased employee/retiree, the annuity benefit payable is the lesser of $487 per month per child or $1,460 per month divided by the number of eligible children. This is called the "single orphan" rate.
If the child has no living parent who was married to the deceased employee/retiree, the benefit payable is the lesser of $584 per month per child or $1,752 per month divided by the number of eligible children. This is called the "double orphan" rate.
If there are one, two, or three children that are eligible for an annuity, the rate will always be the same – the smaller of the two numbers shown: $487 for single orphans and $584 for double orphans. If there are four or more children, the rate per child goes down proportionately. For example, four children divided into $1,460 equals $365. Because $365 is less than $487, the law requires that it be paid. Similarly, four divided into $1,752 equals $438, which is less than $584.
If a parent who was married to the employee/retiree dies before a child's benefit ends, the annuity is increased from the single to the double orphan rate. Benefits may also be adjusted for other reasons. For example, if they are being paid to more than three children and the annuity for one of them in terminated for any reason, the annuities of the remaining children are increased. prospectively. Or, if a child is born to the employee/retiree after his or her death, individual rates may be decreased.
The survivor annuity to each qualified child begins the day after the employee/retiree's death and ends on the last day of the month before the one in which the child dies, marries, reaches age 18, or if over 18 and disabled, becomes capable of self-support.