FOM1 605 

605.5 General 

There are two types of lump-sum death payments (LSDP): a regular LSDP and a 

deferred LSDP. Both types of lump-sum death payments are based on the combined 

wage and compensation record of an insured employee. In addition, payment of an 

LSDP, either regular or deferred, does not affect the future entitlement of survivors to 

insurance annuities. 

605.5.1 Regular LSDP 

A regular LSDP is payable when the employee is not survived by a widow(er), surviving 

divorced spouse, child or parent who could qualify for an insurance annuity for the 

month in which the employee died. A person qualifies for an insurance annuity if (s)he 

meets the requirements for eligibility, even though (s)he fails to apply for or cannot 

receive monthly benefits because of deductions (see FOM1 605.20.2 No Current 

Annuity Eligibility). 

If a widow(er) dies after the employee but in the same month as the employee, the 

LSDP may be paid if the employee acquired his 120 months of creditable service before 

1-1-75 (widow(er) not entitled in the month of death). 

NOTE: If the lump-sum was paid before 8-12-83 and the employee acquired his 120th 

month of railroad service before 1975, the LSDP was payable if a surviving divorced 

spouse was the only survivor entitled to an annuity in the month of death. 

605.5.2 Deferred LSDP 

A deferred LSDP is payable 1 year after the insured employee's death to the widow(er) 

when: 

	 The widow(er) was: 

o	 “living with” the employee at the time of his/her death if the employee has at least 

120 months of creditable RR service before 1975, or 

o	 “living in the same household” as the employee at the time of his/her death if 

(s)he acquired the 120th months of creditable RR service after 1974; and 

	 Someone qualified for monthly benefits in the month of the employee's death; and 

	 The total monthly insurance annuities paid to survivors in the first year after death 

are less than the amount of the regular LSDP that would have been payable if no 

one qualified for an annuity in the month of the employee's death. 

Payment of a deferred LSDP should also be considered when potential entitlement to a 

monthly annuity exists but cannot be proven. For example, a living-with widow applies 

for a regular LSDP and indicates a surviving divorced spouse exists, but details 

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concerning that marriage, the surviving divorced spouse’s DOB, etc. are unknown. 

Because of the surviving divorced spouse’s potential entitlement, the living-with widow 

should be denied and advised that a deferred LSDP may be payable 18 months from 

the date of the employee’s death. A call-up for 18 months should be set by Survivor 

Benefits to take into consideration the possibility of a 6 month retroactive period. 

Detailed information about deferred lump-sum death payments is found in FOM1 605.80 

605.10 Amount Of Regular LSDP 

The amount of the LSDP depends on when the employee acquires 120 months of RR 

service and who is eligible to receive payment. 

605.10.1 Amount of LSDP If the Employee Acquired 120th Month of Creditable RR 

Service Before January 1975 

The maximum LSDP is 10 times the basic amount. However, in computing the basic 

amount for an employee who dies after 1974, the 1974 Railroad Retirement Act (RRA) 

deems the employee to have died on 1-1-75 and any RR and SS earnings after 1974 

are disregarded. 

The minimum LSDP for an employee with any earnings after 1936 is $181.40. The 

maximum amount of an LSDP is about $1,400.00 for an employee with maximum 

earnings through 12-31-74. 

NOTE: If the deceased employee did not have any RR compensation or SS earnings 

after 1936, was not awarded an annuity before 1948 based on at least 10 years of RR 

service and was not a pensioner, the basic amount would have been zero and the 

LSDP would have equaled zero. 

605.10.2 Amount of LSDP If the Employee Acquires 120th Month of Creditable RR 

Service After December 1974 

The maximum LSDP is equal to the lesser of: 

 Three times the PIA; or 

 $255 ($255 will always be less). 

NOTE: Payment of the $255 LSDP may be affected by SSA nonpayment provisions. 

Under the 1988 SS Amendments, the LSDP is not payable if the employee has been 

deported 11-10-89 or later due to association during World War II with the Nazi 

government of Germany. If there is a question about the possibility of this or another 

nonpayment provision applying in a specific case, forward the inquiry to Policy and 

Systems. 

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FOM1 605 

605.10.3 Employee Has at Least 60 Months of Creditable RR Service After 1995 

and a Current Connection 

The maximum LSDP is the lesser of: 

	 Three times the PIA; or 

	 $255.00 ($255 will always be less). 

If the employee was not insured under the Social Security Act, the amount of the LSDP 

will be zero since there is no SS PIA. The LSDP application is denied in this case. 

NOTE: Payment of the $255 LSDP may be affected by SSA nonpayment provisions. 

See note in FOM1 605.10.2, above. 

605.10.4 Amount of LSDP Payable 

The amount of the LSDP actually payable depends, in part, on who receives it. 

A. An eligible widow(er) receives the maximum LSDP. 

B. A funeral home can receive only the lesser of: 

	 The amount of the unpaid burial expenses; or 

	 The maximum LSDP. 

C. Equitably entitled persons can receive only the lesser of: 

	 Full reimbursement for the burial expenses they paid; or 

	 The remaining maximum LSDP (less any LSDP amount paid to the funeral 

home). 

605.15 Priority Of Payment Of Regular LSDP 

605.15.1 Priority of Payment If the Employee Acquired 120th Month of Creditable 

RR Service Before January 1975 

When no one is eligible for an annuity in the month of the employee's death, the LSDP 

is payable only to the following persons, listed in priority order: 

A. Eligible widow(er) - When the employee is survived by an eligible widow(er), 

(s)he is entitled to the LSDP. 

B. Funeral home - When the employee is not survived by an eligible widow(er), the 

LSDP is used to reimburse any unpaid expenses at the funeral home. 

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FOM1 605 

C. Equitably entitled person - When the employee is not survived by an eligible 

widow(er) and there are no unpaid funeral home expenses, or the unpaid funeral 

home expenses are less than the maximum LSDP, the payer(s) of other burial 

expenses (equitably entitled persons) can be reimbursed. 

605.15.2 Employee Acquired 120th Month of Creditable RR Service After 1974 

If the employee's date of death is September 1, 1981 or later, the LSDP is payable only 

to a widow(er) who meets the "living in the same household" requirement, providing no 

one, including the widow(er), is eligible for an annuity in the month of the employee's 

death. 

NOTE: If the employee's date of death was before September 1, 1981, the LSDP was 

still payable in the same priority as described above in FOM1 605.15.1. 

605.20 Eligibility And Entitlement Requirements For Regular LSDP 

An applicant is eligible for the LSDP if all the following requirements are met. 

605.20.1 Insured Status 

The employee must be insured under the Railroad Retirement Act at death. 

A. For deaths before 1975, the employee is insured if he had 120 months of 

creditable RR service, a current connection with the RR industry at death and 

sufficient quarters of coverage to be insured under the Social Security Act. 

B. For deaths after 1974, the employee is insured if he had 120 months of 

creditable RR service, or at least 60 months of railroad service after 1995, and a 

current connection with the RR industry. 

605.20.2 No Current Annuity Eligibility 

The LSDP is payable on the combined wage and compensation record of an insured 

employee in the following situations: 

	 There is no surviving widow(er), remarried widow(er), surviving divorced spouse, 

child or parent eligible for an insurance annuity in the month of the employee’s 

death. A person is considered eligible for an insurance annuity if (s)he meets the 

requirements for eligibility, even though (s)he fails to apply for or cannot receive 

monthly benefits at this time because of deductions. 

NOTE: If a widow dies after the employee but in the same month as the employee, 

the LSDP may be paid if the employee acquired his 120 months of creditable service 

before 1-1-75 (widow(er) not entitled in the month of death). 

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FOM1 605 

	 A widow(er) becomes disabled in the month of the employee's death or in the five 

preceding months and his/her beginning date is after the month of the employee's 

death because of the waiting period. 

	 There is a surviving divorced spouse or remarried widow(er) entitled to any social 

security benefit or combination of social security benefits that reduces the annuity 

rate to zero, and there is not a possibility of an ARF adjustment that will increase the 

annuity rate to above zero. (S)he cannot be eligible for a surviving divorced spouse 

or remarried widow(er) annuity in this case. 

The LSDP is not payable in the following situations: 

	 There is a surviving divorced spouse or remarried widow(er) entitled to any social 

security benefit or combination of social security benefits that reduces the annuity 

rate to zero, and there is a possibility of an ARF adjustment that will increase the 

annuity rate to above zero. 

	 There is a surviving divorced spouse or remarried widow entitled to an annuity 

computed to a rate of zero due to an employee annuity or public service pension 

reduction, regardless if there is or is not the possibility of an ARF adjustment. 

	 An annuitant would have been entitled in the month of death, but the retroactivity 

rules prevent the annuity from being payable in that month. 

If eligibility exists in the month of death but no annuity is payable, or the annuity that will 

be payable in the first year after the employee's death is less than the amount of the 

lump-sum death benefit, a deferred LSDP may be considered. 

NOTE: Before 8-12-83, an LSDP could be paid if the employee acquired his 120th 

month of railroad service before 1975 and a surviving divorced spouse was the only 

person eligible for monthly benefits in the month of death. 

605.20.3 Application 

An application must be filed no later than the second anniversary of the employee's 

death. Refer to FOM1 605.25 for additional information regarding the filing of an 

application. 

Exceptions: 

1. The person entitled to the LSDP is in military service for some months after the 

employee's death. In this instance, the months that the entitled person is in 

military service may be excluded in determining the 2-year period. 

2. A medical school, dental school or anatomical board files for the LSDP. A 

medical school, dental school or anatomical board may file up to 1 year after the 

disposition of the remains even if the 2-year limit has expired. 

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605.20.4 Eligible Persons 

The following persons may be eligible for the LSDP: 

A. Widow(er) - The applicant must be the employee's legal widow(er) who will not 

have died before receiving the LSDP. The widow(er) need not meet any duration 

of marriage requirement. However, (s)he must meet one of the following 

requirements: 

1. If the employee acquired his 120th month of railroad service before 1975, 

the widow must meet the "living with" requirement at the time of the 

employee's death. 

The “living with” requirement is met if, at the time of the employee's death: 

	 The employee and spouse were members of the same household; or 

	 The spouse was receiving regular contributions from the employee; or 

	 The employee was under court order to contribute to the spouse's 

support. 

2. If the employee acquired his 120th month of railroad service after 1974, or 

60-119 months after 1995, the widow(er) must meet the “living in the same 

household” requirement at the time of the employee’s death. 

The “living in the same household” requirement is met if, at the time of the 

employee's death: 

	 The employee and spouse were living together as husband and wife in 

the same abode (in the absence of evidence to the contrary, assume 

they were living in the same household if they were living at the same 

address); or 

	 The employee and spouse had shared, and again planned to share, 

the same abode, even though they lived apart temporarily because of 

circumstances beyond their control (such as financial difficulties, ill 

health, working away from home, military service, etc.); or they lived 

apart temporarily because one spouse is in a curative, custodial or 

penal institution. While temporarily living apart will not defeat living in 

the same household, the facts must establish that there was an intent 

to resume living together and that the living apart was temporary in 

nature. 

If the employee and spouse were separated solely for medical 

reasons, consider them to be living in the same household, even if the 

separation was likely to be permanent and there was little or no 

expectation of them living together again. As long as one spouse 

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continued to demonstrate strong personal and/or financial concern for 

the other, assume they would have lived together (absent evidence to 

the contrary) had the medical reasons not necessitated their 

separation. 

For additional information regarding establishment of “living with” or 

"living in the same household" refer to FOM1 935.5. 

B. Funeral home - If no eligible widow(er) survives the employee, or if the widow(er) 

dies before receiving the LSDP (or negotiating the LSDP check, if paid by check), 

a funeral home may be paid the LSDP to the extent of unpaid burial expenses of 

the employee incurred by or through the funeral home when: 

1. A timely application is filed by a person who assumes responsibility for 

payment of all or any part of the funeral home expenses and authorizes 

payment of the LSDP to the funeral home; or 

2. An application is filed by the funeral home at the expiration of the 90-day 

period following the death of the employee if, during that 90-day period, no 

person assumed responsibility for payment of all or any part of the funeral 

home expenses. If part of the LSDP remains, it may then be payable to 

the equitably entitled person(s), if any. 

C. Equitably entitled person(s) - If no eligible widow(er) survives the employee, or if 

the widow(er) dies before receiving the LSDP (or negotiating the LSDP check, if 

paid by check) and there are no unpaid B/E incurred by or through a funeral 

home, the applicant must be the person equitably entitled to reimbursement for 

having paid the B/E of the employee. 

The term "person equitably entitled" may also include: 

	 A home for the aged or sick, including one that is affiliated with a fraternal 

organization when it is entitled to a tax exemption under section 501(c) of the 

Internal Revenue Code (IRC) of 1954, and pays the B/E or furnishes goods 

and services in connection with the burial of the employee, even though there 

was an express (or implied) contractual obligation to pay the B/E of the 

employee; 

	 A fraternal organization exempt from the payment of taxes under section 

501(c)(8) of the IRC of 1954 may also be the person equitably entitled to 

reimbursement for having paid the B/E of the employee except to the extent 

the payment of B/E was (1) made pursuant to a plan or system providing for 

the payment of a fixed sum upon death of a member (or one of the member's 

family) or (2) because of an express contract with the member. 

Refer to FOM1 Art 6 Appendix B for a list of some tax exempt organizations. 

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605.25 Application Requirements For Regular LSDP 

An eligible person must file an application in order to receive payment of any part of the 

LSDP. 

605.25.1 Acceptable Forms 

The usual application form used to apply for a regular LSDP is the Application Form AA21. The Social Security Administration's Application Form SSA-8-F4 is also acceptable 

if the record contains all the information necessary for processing the claim under the 

RRA. 

If a funeral home is applying, Form G-273a and a copy of the death certificate is 

required in addition to the Application Form AA-21. 

When an eligible widow(er) will be entitled to an insurance annuity within 3 months, the 

annuity application can be used to award the LSDP and the monthly annuity. An 

Application Form AA-21 is not required in this situation. 

605.25.2 2-Year Time Limit 

An application must be filed on or before the second anniversary of the employee's 

death unless one of the exceptions listed in FOM1 605.20.3 exists. 

605.25.3 Purpose of Form RL-94F 

Form RL-94F is used only to secure information about the deceased employee's 

survivors and to determine who may qualify for the LSDP. A Form RL-94F cannot serve 

as an application, nor does it protect the filing date of an application filed after the 

expiration of the 2-year period. 

605.30 Evidence And Development Requirements For Regular LSDP 

605.30.1 Evidence and Forms 

Evidence When Required 

Application Always. 

 An Application AA-21, SSA's SSA-8-F-4, or any 

other survivor application form is acceptable. Form 

G-273a is used as a supplement to Application AA21 when FH applies directly. 

Proof of employee's death Always. When a funeral home applies, Form G273a is insufficient as POD. 

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Assignment of interest (g131) When there are multiple potential applicants and 

one or more desires to assign his share to an 

eligible applicant and the share does not exceed 

$500. 

Proof of marriage and living 

with or living in the same 

household 

If the applicant is the widow(er), the statement on 

the application is sufficient proof of living with 

unless there is conflicting evidence. If there is a 

question refer to FOM1 605.35.1. 

Proof of payment of B/E When the applicant has paid any burial expenses. 

For some burial expenses, listing the paid B/E on 

the signed application or on a signed statement is 

acceptable (see FOM1 605.65.4 for details). 

Guardianship of applicant 

(AA-5) 

If guardian or other legal representative is selected 

as representative payee for the applicant. 

Proof of appointment of legal 

representative of an estate 

Only when the estate is equitably entitled and 

payment is to be made to the legal representative 

on behalf of the estate. 

Proof of M/S When the employee's M/S after 1936 is creditable 

under the RRA or SSA. 

Parent's statement of nondependency When the parent is over age 60, has not married 

since employee’s death and dependency is 

"unknown". 

Summary/certification (G626) Always. If paper documentation also needs to be 

forwarded to headquarters for SBD to adjudicate a 

case, attach it to the G-626. 

Lag Wages and SEI When claimed by employee or applicant 

605.30.2 Assignment of Interest 

An eligible person may submit Form G-131 instead of an application if he desires to 

assign his share of the LSDP to an eligible applicant and the share does not exceed 

$500. Furnish Form G-131 to an eligible person only when he expresses a desire to 

assign his share of the benefit. The person must be informed of the approximate 

amount of his share before he completes the form. Like an LSDP application, Form G131 must be filed no later than the second anniversary of the employee's death. 

605.30.3 Parent's Non-Dependency Statement 

A statement of non-dependency is required from a parent when: 

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FOM1 605 

	 the Application AA-21 shows that the parent's dependency is "unknown"; and 

	 the parent has not married since the employee's death. 

A statement should also be secured if there appears to be a discrepancy. For instance, 

the parent's address is the same as the deceased employee's, but the applicant says 

the parent was not dependent. 

If the field office is unable to get a statement when one is required, submit a written 

explanation including an opinion as to the parent's dependency. After your explanation 

has been received, Survivor Benefits will make a determination whether the LSDP can 

be paid without the statement of non-dependency. 

605.35 Widow(er) Eligible For LSDP By Reason Of Relationship 

A widow(er) is eligible for an LSDP if no one is eligible for a survivor annuity for the 

month in which the employee died, and 

	 If the employee has at least 120 months of creditable RR service before January 

1975 and (s)he meets the "living with" requirement; or 

	 If the employee acquired his 120th month of creditable RR service after 1974 

and(s)he meets the "living in the same household" requirement; or 

	 If the employee has 60-119 creditable service months, and at least 60 service 

months were after 1995 and (s)he meet the “living in the same household” 

requirement. 

An LSDP is not payable if a widow(er) could qualify for an annuity in the month of death, 

but due to delayed filing cannot be paid for the month of death. However, payment of a 

deferred LSDP may be considered. 

605.35.1 Development of Living With and Living in the Same Household 

A. General - The fact that the employee died away from the family household is not 

in itself reason for full development of "living with" or "living in the same 

household." Many deaths occur away from the family residence. When there is 

an allegation of "living with" or "living in the same household," but the file 

indicates that death occurred away from the family residence, an explanation 

showing that the employee died at a hospital, at work, on a business trip or 

vacation is usually sufficient. This is not true, of course, when other evidence 

casts doubt on the allegation. In such case, develop the allegation fully per 

FOM1 935.5. 

B. Whereabouts of widow(er) unknown - If the widow(er) cannot be located through 

friends, relatives, employers or other sources, questions about "living with" or 

"living in the same household" and other conditions of entitlement on Form AA-21 

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FOM1 605 

must be answered by the applicant. The applicant must also submit statements 

regarding whether the widow(er) was living-with the employee from two other 

persons, preferably friends or relatives of the missing widow(er). If the evidence 

indicates a reasonable probability that the widow(er) is entitled, any claim by a 

person who paid B/E will be disallowed. 

C. Widow(er) will not submit evidence of living with or living in the same household 

after applying - If the widow(er) has not responded to all attempts to secure 

evidence regarding “living with” or “living in the same household”, inform the 

widow(er) in writing that (s)he is entitled to the LSDP if (s)he was “living with” the 

employee at the time of death or was “living in the same household”, whichever 

is applicable. The letter should explain how the widow(er) may establish that 

(s)he meets the requirement. 

If, after a reasonable time (at least 30 days) the widow(er) does not submit 

sufficient evidence to resolve the issue, release another letter advising the 

widow(er) that unless proof is submitted within 30 days, a decision on the claim 

will be made based on the evidence in file. 

After 30 days, if no reply is received and no other action has been taken, a 

decision will be made based on the evidence in file. The widow(er)'s claim will be 

denied unless (s)he is equitably entitled. If the widow(er) is not equitably entitled, 

payment will be made to the funeral home and/or the payer(s) of the employee's 

burial expenses. 

605.40 Widow(er) Is Equitably Entitled 

If a widow(er) files for the LSDP and the facts do not clearly establish living with or living 

in the same household, find out whether the widow(er): 

	 Paid all the employee's burial expenses; or 

	 Assumed responsibility at the funeral home for paying the employee's burial 

expenses, will assign LSDP to the funeral home, and unpaid burial expenses exceed 

the LSDP amount. 

	 When either of the above conditions apply, it is not necessary to establish living with 

or living in the same household since future benefits are not affected. However, if 

someone other than the widow(er) paid any part of the employee's burial expenses 

and there are no unpaid funeral home expenses, or the balance at the funeral home 

is less than the LSDP amount, fully develop the question of living with or living in the 

same household. 

	 The above rule also applies when development of proof of marriage is prolonged, 

provided the widow(er) will be entitled to the entire LSDP regardless of the outcome 

of the development. The rule can be applied when the question pertains to the 

legality of the marriage and no prior marriage is involved, or the termination of the 

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surviving spouse's prior marriage is involved. Do not apply this rule when the 

question concerns a prior marriage of the employee or the residual lump-sum. In 

such cases, the question must be resolved since the result could bar payment of the 

LSDP to the claimant. 

605.45 Payment Of Regular LSDP To Widow(er) Who May Be Eligible 

For A DWIA In The Month Of The Employee's Death 

The LSDP may be paid to a widow(er) age 50-60 who is disabled but does not wish to 

file for a disabled widow(er)'s insurance annuity (DWIA). The reasoning behind this 

policy is that eligibility for a DWIA cannot be presumed unless the widow(er) actually 

files for a DWIA. This policy applies even if the widow(er) is receiving an SS DIB or a 

RR disability annuity based on her own employment. 

605.45.1 Widow(er) Files for a DWIA and Later Cancels Application 

The LSDP can be paid upon cancellation of the DWIA, but any DWIA payments made 

would have to be refunded before the LSDP can be paid. An Application Form AA-21 is 

not required to award the LSDP. 

605.45.2 Widow(er) Who Receives LSDP Later Files for WIA and Early Medicare 

and Is Rated Disabled as of the Month of the Employee's Death 

As long as the widow(er) is under age 60 in the month of the employee's death and 

does not file for a DWIA, the LSDP award is correct and will not be affected by 

subsequent entitlement to any other benefit. 

605.45.3 Widow(er) Receives LSDP and Later Files for a DWIA 

If a widow(er) receives the LSDP and later files for a DWIA that starts in the 12-month 

period beginning with the month of death, the LSDP award is considered erroneous if 

the widow(er) is rated disabled as of the sixth month prior to the month of the 

employee's death. The LSDP is payable if the DWIA cannot begin in the month of the 

employee's death solely because the 5-month waiting period has not expired. 

NOTE: For DWIA applications that were filed before 9-1-83, the LSDP was considered 

erroneous if the DWIA began in the 12-month period beginning with the month of death 

and the widow(er) was rated disabled as of the month of the employee's death. 

If the LSDP is considered erroneous, it is recovered from the DWIA award. However, a 

deferred LSDP can be considered if the DWIA payments made for the year after the 

employee's death are less than the regular LSDP amount. 

An LSDP award is not considered erroneous if a widow(er) becomes disabled in a 

month after the employee's death, or when the DWIA begins more than a year after the 

employee's death. 

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605.50 Payment Of Regular LSDP To Funeral Home 

605.50.1 Conditions for Payment 

An LSDP is payable to a funeral home (FH) to the extent of unpaid B/E incurred by or 

through such home when: 

A. There is no eligible widow(er); and 

B. A timely application is filed by a person who assumes responsibility for payment 

of all or any part of the FH expenses and authorizes payment of the LSDP to the 

FH; or 

C. An application is filed by a FH at the expiration of the 90 day period following the 

death of the employee if no one assumed responsibility for payment of all or any 

part of expenses incurred by the FH during that 90 day period. 

After satisfying the unpaid FH expenses, any remaining LSDP is paid to equitably 

entitled person(s). 

605.50.2 Assumption of Responsibility for FH Expenses 

The assumption of responsibility for FH expenses generally means that there was a 

bona fide agreement between a person and FH that the person assumed responsibility 

for payment of all or part of unpaid FH expenses. 

An assumption of responsibility is usually made by the person who makes the funeral 

home arrangements. A voluntary payment to the FH is also considered an assumption 

of responsibility. 

605.50.3 Authorization of LSDP to FH 

A. General - An authorization of payment of the LSDP to a FH is accomplished on 

the Application AA-21 and Form G-273a as follows: 

1. Application AA-21 - By completing the appropriate items on the 

Application AA-21, the applicant authorizes that the payment of the LSDP 

to the FH is to be applied to the specified amount of unpaid expenses. The 

amount specified should correspond to the amount of unpaid expenses 

shown by the FH on Form G-273a. Any discrepancies must be 

reconciled, unless it meets the "Exception" as noted in FOM1 605.50.5. 

2. Form G-273a - By completing the Form G-273a, the FH not only gives 

information about the B/E, but also certifies that they will return the LSDP 

check or refund the excess to RRB if, at the time the check is received, 

the amount of the check is greater than the unpaid expenses. This form 

must be completed by the FH whenever payment of the LSDP is being 

authorized by a person assuming responsibility for unpaid B/E. 

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B. Eligible widow(er) wishes to authorize payment to FH - An eligible widow(er) who 

is entitled to the LSDP by right of relationship may authorize payment of all or 

part of the LSDP to the FH to satisfy all or part of unpaid FH expenses. 

The appropriate items on the Application AA-21 referring to authorization must be 

completed by the widow(er). However, Form G-273a is not required unless the 

widow(er)'s eligibility based on relationship is questionable, but (s)he assumed 

responsibility at the FH. 

605.50.4 When FH May Apply for LSDP 

A. 90-day waiting period - At the end of the 90-day period after the employee's 

death, the FH may apply for the LSDP if no one has assumed responsibility for 

payment of any part of the B/E in that period. In addition to the Application Form 

AA-21, the FH must submit Form G-273a and a separate proof of death. 

B. Acceptable POD - Form G-273a is not acceptable as proof of death when a FH 

files for the LSDP. The funeral home must submit other evidence of death when 

applying directly for the LSDP. 

605.50.5 Proof of FH Expenses 

Verify the total burial expenses incurred by or through a FH and the amount still unpaid 

by comparing the statements on Forms AA-21 and G-273a. Reconcile any 

discrepancies found to avoid delays and assure proper payments. If the amount of 

outstanding burial expenses on Forms AA-21 and G-273a are discrepant, a 

supplemental Form AA-21 and/or another Form G-273a may be requested because the 

amounts must agree in order for payment to be made. 

EXCEPTION: If the Form G-273a shows a balance in excess of $1,400 and the 

Application Form AA-21 authorizes payment of over $1,400 to the funeral home, a 

discrepancy will not affect payment since the maximum possible LSDP is about $1,400. 

A supplemental Application Form AA-21 or new Form G-273a is not required in these 

cases. Enter the reason for the discrepancy in the remarks section of Form G-626 

605.50.6 Amount of LSDP Payable to FH 

A. One FH involved - The LSDP is equal to the lesser of: 

1. The unpaid amount of B/E incurred by or through that FH; or 

2. The maximum LSDP amount. 

B. More than one FH involved - Subject to the limitation above, the amount payable 

to each FH is as follows: 

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1. If payment has already been made to one FH based on the application of 

a person who assumed responsibility, the amount of the LSDP remaining 

is paid to the second FH; or 

2. If payment is being made at the same time, the amount designated to 

each FH by the person who assumed responsibility; or 

3. If no one assumed responsibility, the LSDP is paid to each FH to the 

extent and in proportion to the unpaid B/E each FH incurred. 

EXAMPLE 1: The maximum LSDP is $840 (10 x BA of $84.00) and the 

total FH expenses are $1,800 incurred by two FHs. The Acme FH 

incurred expenses of $300 and the Newport FH incurred expenses of 

$1,500. No one assumed responsibility and after the 90-day period 

elapsed each FH filed for reimbursement. The proportionate shares are: 

Acme FH 300/1800 x $840 = $140 (LSDP share), 

Newport FH 1500/1800 x $840 = $700 (LSDP share). 

EXAMPLE 2: The maximum LSDP is $752 (10 x BA of $75.20), and 

payment of $650 has been authorized to the Shady FH. No other B/E are 

indicated on the Application AA-21 and an LSDP of $650 is paid to the 

Shady FH. Three months later a claim is received from the Ajax FH for 

unpaid expenses of $295. The amount now payable is: 

$752 (Maximum LSDP) 

-650 (LSDP prev. pd. To Shady FH) 

$102 (Amount payable to Ajax) 

650.50.7 Notifying Person Authorizing Payment to FH 

Notify the person who authorized all or part of the LSDP to a funeral home when the 

award is made, as follows: 

A. Entire LSDP Payable to Funeral Home – Send Form Letter RL-24a to the 

applicant who authorized the payment to the funeral home if (s)he is: 

	 A representative of government agency, e.g., Department of Public Welfare; 

or 

	 The representative of the employee's estate; or 

	 An applicant who specifically asks to be notified. 

B. Part of LSDP Payable to Funeral Home 

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1. Equitably Entitled Person Authorized Payment to Funeral Home - When 

an equitably entitled person authorized payment to a funeral home and 

payment is also being made to that person; include Code Paragraph 537 

in the notice of award to the equitably entitled person. 

2. Person Not Equitably Entitled Authorized Payment to Funeral Home 

When a person not equitably entitled authorized payment to a funeral 

home, send Form Letter RL-24a to the applicant who authorized the 

payment only if he/she is one of the persons listed in "A" above. 

Form Letter RL-24a is on RRAILS. 

605.50.8 Unpaid Retirement Annuities Not Payable to FH 

Unpaid retirement annuities are not payable to a FH, even if the LSDP does not cover 

all the unpaid funeral home expenses. A FH is not an equitably entitled person, nor is 

the person authorizing the payment in respect to the amount authorized. However, any 

other B/E may be reimbursed from accrued retirement annuities. 

EXAMPLE: Total LSDP $800.00; Accrued annuity = $100.00; FH expenses = 

$1,200.00; other B/E = $200.00. Son A authorizes payment of LSDP to FH then pays 

the remaining $400.00 FH expenses; son B pays the other B/E of $200.00. 

$1,400.00 (total B/E) - $800.00 (LSDP) = $600.00 (Unreimbursed B/E). 

The accrued annuity is paid as follows: 

Son A is paid $66.67 ((400  600) x 100 = 66.67) 

Son B is paid $33.33 ((200  600) x 100 = 33.33) 

605.55 Payment Of Regular LSDP To Equitably Entitled Persons 

605.55.1 Definition of an Equitably Entitled Person 

An equitably entitled person is a person who paid (or whose funds were used to pay) 

the B/E of a deceased employee because of kinship, friendship, moral obligation, or 

similar motives. 

The word "person" includes an individual, partnership, trust estate, association, 

corporation, government unit or estate of a deceased individual. 

The term "person equitably entitled" includes, but is not limited to, the following: 

	 Certain tax exempt organizations furnishing goods and services for the deceased's 

burial; and 

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	 A state or any political subdivision paying the deceased's burial expenses; and 

	 Certain tax exempt homes for the sick and aged; and 

	 Certain tax exempt fraternal organizations paying burial expenses of a member, or 

one of the family of a member, of such an organization; and 

	 A legal representative of the estate who uses his personal funds to pay burial 

expenses. 

605.55.2 When a Funeral Director Can Be Considered Equitably Entitled 

A funeral director can be equitably entitled to the LSDP if (s)he has furnished goods or 

services for the burial of the following relatives (including relatives by adoption): 

 Spouse; or 

	 Child, stepchild; or 

 Grandchild; or 

	 Parent, stepparent; or 

 Grandparent; or 

	 Brother or sister; or 

	 Any other relative (by blood, marriage, or adoption) living in the same household 

with the funeral director at the time of death. 

This is an exception to the general rule which prohibits payment to funeral directors as 

equitably entitled persons. 

A funeral director who buries a relative listed above may file immediately as an 

equitably entitled person or he may wait 90 days after the employee’s death and file as 

an unpaid funeral home. 

If the funeral director files as an equitably entitled person, (s)he can be only reimbursed 

the cost to him or her of goods and services used and only actual out-of-pocket 

expenditures for services specifically for the funeral. (S)he cannot be reimbursed for his 

or her own services or those of the members of the funeral home staff unless (s)he 

separately pays for specific services in connection with the burial. 

If the funeral director applies as an unpaid funeral home, (s)he can be reimbursed 

based on the funeral home’s normal charge for the services provided. 

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605.55.3 When LSDP Can Be Paid to Equitably Entitled Persons 

The LSDP can be paid to persons equitably entitled by reason of paying the employee's 

burial expenses when: 

	 No eligible widow(er) survives, or the eligible widow(er) dies before receiving the 

LSDP payment or, if the LSDP was paid by check, negotiating the check; and 

	 The employee acquired the 120th month of creditable RR service before 1975 

(before 9-1-83, also if the employee acquired the 120th month of service after 1975, 

but died before September 1, 1981); and 

	 There are no unpaid burial expenses incurred by or through a funeral home, or such 

expenses are less than the maximum LSDP payable; and 

	 An application is filed on or before the second anniversary of the employee's death. 

A. When there are unpaid FH expenses - The LSDP is first paid to the FH to the 

extent of unpaid expenses. The remaining LSDP, if any, is paid to the person(s) 

equitably entitled. 

B. Priority of payment - The LSDP, or any part of the LSDP remaining after the 

unpaid FH expenses are paid, is paid to equitably entitled persons to the extent 

and in proportion to the amount of the burial expenses each paid, in the following 

order of priority: 

	 Funeral home expenses (see NOTE below). 

	 Grave opening and closing expenses, if not included on the funeral home bill. 

	 Expense of providing burial plot, if not included on the funeral home bill. 

	 Any remaining B/E not included on the funeral home bill. 

NOTE: In many cases, the funeral home will make most of the burial 

arrangements, such as arranging for the opening and closing of the grave, and 

include the cost on their final bill. Any funeral expense on the above priority list 

included on the final funeral home bill is part of the total funeral home expenses 

and not considered a separate burial expense. 

C. Equitably Entitled Person(s) Paid FH Expenses - If the funeral home expenses 

exceed the maximum LSDP, and only one person paid those expenses, that 

person is paid the entire LSDP. If more than one person paid the funeral home 

expenses, each person who paid part of the FH expenses is reimbursed in 

proportion to the amount (s)he paid. Persons who paid any other burial 

expenses cannot be reimbursed. 

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EXAMPLE: The FH expenses of $4,500 were paid by the employee's two 

brothers. Frank paid $3,000 and Robert paid $1500. The maximum LSDP in this 

case is $1,000 (10 x BA of $100.00) The proportionate shares are as shown 

below: 

Frank 3000/4500 x $1000 = $666.67 (LSDP share); 

Robert 1500/4500 x $1000 = $333.33 (LSDP share). 

D. Equitably Entitled Person(s) Paid Non-Funeral Home B/E - If the FH expenses 

are less than the maximum LSDP, the person(s) who paid the remaining B/E can 

be reimbursed up to the lesser of the remaining B/E or remaining LSDP. If the 

payer of both the FH expenses and remaining B/E is the same person, (s)he is 

paid the entire LSDP due. If more than one person contributed to the payment of 

the total B/E and no shares are assigned, the LSDP is paid as follows: 

	 If all persons contributed to the entire combined B/E, each person is 

reimbursed in the proportion (s)he contributed. 

EXAMPLE: Total LSDP = $1,000.00; FH expenses = $3,500.00; remaining 

B/E = $375.00; total combined B/E = $3875.00. The EE’s 4 children agree to 

split the entire cost of burying their father based on what each one can afford. 

1. Child A contributes $1,700.00. She is reimbursed $438.71 ((1700  3875) 

x 1000 = 438.71). 

2.	 Child B contributes $1,200.00. He is reimbursed $309.68 ((1200  3875) x 

1000 = 309.68). 

3.	 Child C contributes $600.00. He is reimbursed $154.84 ((600  3875) x 1000 

= 154.84). 

4.	 Child D contributes $375.00. She is reimbursed $96.77 ((375  3875) x 1000 

= 96.77). 

NOTE: Since each child’s share is less than $500.00, any of them can complete 

Form G-131 to assign his or her share to another PB/E. 

	 If one person paid the FH expenses and another the remaining B/E, the 

person who paid the FH expenses is fully reimbursed and the person who 

paid the remaining B/E is paid the remaining LSDP due. 

EXAMPLE: Total LSDP = $1,000.00; FH expenses = $950.00; remaining B/E 

= $250.00. EE’s daughter paid all of the FH expenses and his son paid the 

remaining B/E. The LSDP is paid as follows: 

1. EE’s daughter is reimbursed the total $950.00 she paid for the FH 

expenses. 

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2. EE’s son is reimbursed $50.00 of the $250.00 he paid for the remaining 

B/E. 

NOTE: If there were 2 payers of the remaining B/E in this case, each would 

be reimbursed in proportion to how much of the $250.00 (s)he paid. 

	 In the event that more than one person paid the B/E and each person paid a 

separate type of B/E, as listed above in item B, the B/E are reimbursed in 

priority order. 

EXAMPLE: Total LSDP = $1,000.00; FH bill = $750.00 and includes opening 

and closing of grave; burial plot = $300.00; remaining B/E = $250.00. EE’s 3 

children agree that each will pay for one type of B/E. 

1. Child A paid the FH expenses and is reimbursed all of the $750.00 he 

paid. 

2. Child B paid for the burial plot and is reimbursed $250.00 of the $300.00 

he paid. 

3. Child C paid the remaining B/E, but is not reimbursed for any of those B/E. 

605.55.4 Payer of B/E Expects Reimbursement From Estate or Other Sources 

The following subsections explain how to handle cases in which either the payer of B/E 

expects to be reimbursed in the future or a legal representative has been appointed but 

payer of B/E does not expect to be reimbursed. 

A. Person Expects Reimbursement From Funds of Estate - If the person who files 

as payer of B/E is not the legal representative of the employee's estate, but 

expects to be reimbursed by the representative from estate funds, pay the 

applicant (if otherwise in order) and release Form Letter RL-59 to the legal 

representative of the estate. 

B. Payer of B/E Does Not Expect Reimbursement From Estate Funds - If the 

applicant (payer of B/E) is NOT the legal representative of the estate and does 

NOT expect to be reimbursed by the legal representative, pay the applicant (if 

otherwise in order) and release Form Letter RL-59 to the legal representative of 

the estate. 

C. Payer of B/E Expects Reimbursement From Other Sources - If reimbursement is 

expected from a source other than estate funds (e.g., from a relative of the 

deceased employee), pay the applicant and release Form Letter RL-59 to the 

person who is expected to reimburse the payer of B/E. 

Form Letter RL-59 is on RRRAILS. 

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605.55.5 Contractual Obligations 

A. General - Any person NOT contractually obligated under a plan, system, or 

general practice to pay B/E, furnish the employee's burial, or supply the funds 

used to pay B/E IS equitably entitled. 

A contractual obligation may exist when a person paid dues, premiums, or other 

consideration in return for which an employer, insurance company, fraternal 

organization, burial society, undertaker, home for the aged, etc., agreed to pay 

money or provide the employee a burial. However, a home for the sick and aged 

that is tax exempt under Section 501c of the Internal Revenue Code is always 

considered to be equitably entitled. 

B. Determining if a plan or system exists - A plan or system exists when the person 

has established rules, programs, and procedures regarding: 

 Maintenance of a fund from which the benefits are paid; or 

 Eligibility requirements; or 

 Amount of benefits and method of payment. 

C. Determining if an express contract exists - There is an express contract for burial 

only if the organization, as part of the consideration for initiation or payment of 

the member's dues or assessments, definitely promises to bury the member. 

Such promise may be a provision in the constitution or by-laws, or may be 

incorporated in a contract between the employee and the organization. While the 

promise to bury need not be in writing, it must be definite. A statement by the 

organization that it never allows its members to be buried at public expense is 

not a definite promise to bury. 

D. Determining if a general practice exists - A general practice exists when the 

person has rather consistently paid B/E or benefits in similar cases in the recent 

past. 

605.55.6 Development of Plan, System or General Practice 

A. Information required from organization or employer - Assume that a plan, system 

or general practice exists when the organization so states. When it is necessary 

to find out whether a plan, system or general practice exists, obtain all the 

following information from the organization or employer: 

1. The conditions under which a member's or employee's B/E is paid; 

2. If members or employees contribute to the fund from which payment is 

made, either directly or through dues, assessments, or attendance at 

events conducted for the benefit of the fund; 

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3. If there is a plan, particularly one that the members or employees could 

reasonably be expected to know about. The plan may be shown by 

provisions of the constitution of by-laws, posters, fraternal insurance 

contracts, oral statements, etc.; 

4. How often the organization pays the B/E of its members or employees in 

similar cases; 

5. How payment is made, e.g., whether directly to the funeral home, to the 

named beneficiary, to the next of kin, or to the person who pays the 

funeral home, and whether there are any rules or customs for making 

payment; 

6. What discretion the organization or employer can exercise in regard to 

payment, i.e., can the organization or employer decide whether payment 

will be made, in what amounts, and to whom it is payable. 

B Membership test - A member is a person who: 

1. Has some voice in the maintenance or operation of the fund or in the 

affairs of the organization that maintains the plan, system, or general 

practice; or 

2. Contributes something of value, i.e., property, income, dues, 

assessments, service, etc., to the organization or fund in reliance upon an 

express or implied promise to pay a death benefit or B/E. 

A person who contributes to the Red Cross, Community Chest, Army or 

Navy Emergency Relief, etc., does not meet the membership test. When 

an employee was not a member of the organization and his B/E are paid 

merely because he was a member of the same faith or belongs to the 

same profession as members of the organization, the organization may be 

equitably entitled. 

C. Employment test - When the employee had rendered services for an 

organization, assume that the status of employee existed at the time of death. 

However, if the organization contends its plan, system or general practice does 

not cover an employee who was fired or resigned, or was not working because of 

illness at the time of death, find out whether the organization previously made 

payments in similar cases. 

605.55.7 When Equitably Entitled Person's Estate Is Entitled 

If the equitably entitled person dies before receiving the LSDP (or negotiating the check, 

if the LSDP was paid by check), his right to the LSDP passes to his estate. An 

equitably entitled person need not have filed an application for reimbursement before 

his death. 

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When the equitably entitled person filed a timely application prior to death, a claim on 

behalf of equitably entitled person's estate may be filed at any time. If an application 

was not filed by the equitably entitled person before death, the equitably entitled 

person's estate must file an application within 2 years of the employee's death. Refer to 

FOM1 620 for information about payment of benefits to an estate. 

605.55.8 When Medical School or Anatomical Board Claims to Be Equitably 

Entitled 

A medical school, dental school or anatomical board that claims to be equitably entitled 

on the basis of expenses directly related to the final disposition of the remains of the 

deceased employee may file a claim for the LSDP. A claim may be filed up to 1 year 

after the final disposition of the remains even if the 2-year time limit has expired. 

If the school or anatomical board uses and pays for the services of a funeral home for 

final disposition of the remains, it can be reimbursed as a PB/E in the same way any 

other equitably entitled PB/E would be reimbursed. Form G-273a is sufficient as proof 

of payment of B/E. 

If the school or anatomical board uses its own resources and not a funeral home for the 

final disposition of the remains, secure all of the following before submitting the claim to 

SURVIVOR BENEFITS: 

A. Application Form AA-21 - This form should be signed by a representative of the 

medical school, dental school or anatomical board claiming reimbursement. 

Rubber stamped signatures are not acceptable. 

B. Evidence of burial expenses - Each claim should include an itemized statement 

of burial expenses indicating what goods and services are included in the total 

claimed expenses. 

If the total expenses are less than $160, the claimant's itemized statement may 

be accepted without developing a detailed breakdown of each item, unless it 

appears that a particular item may not be reimbursable. This total includes 

transportation, embalming and cremation costs. 

If the total expenses exceed $160, the claimant's itemized statement should 

include a detailed breakdown of each item. When a detailed breakdown is 

required, it should include the cost of each item for which reimbursement is 

claimed. If the breakdown is for the disposition of more than one body, HQ will 

prorate the expenses to determine the appropriate reimbursement due. 

C. Date of the final disposition - Each claim should include the date final disposition 

of the body was made. 

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605.55.9 Church Cemetery Organization Claims Reimbursement 

A church cemetery organization is equitably entitled if it qualifies in its own right as a 

nonprofit religious organization under the following conditions: 

	 It is organized under the jurisdiction or control of a recognized church; and 

	 It is subject to the supervision of the church; and 

	 It is maintained mainly for burial of members of the church in accordance with 

church rites and ceremonies; and 

	 Its officers and board of directors are restricted to the clergy and lay officers of the 

church; and 

	 Its net income goes to the church. 

605.55.10 Home for Sick and Aged Claims Reimbursement 

A home for the sick and aged is equitably entitled even when a formal contract to bury a 

resident exists if: 

	 The home is entitled to a tax exemption under section 501(c) of the IRC of 1954; and 

	 It pays B/E or furnishes goods and services in connection with the burial of an 

inmate or guest. 

Section 501(c) provides tax exemptions for nonprofit organizations. We will accept the 

statement of a home that it has a tax exemption under this section if it is operated by a 

recognized religious denomination. 

If the home is not operated by a recognized religious denomination or there is a 

question whether it has a tax exemption, ask whether the home applied to IRS for a 

ruling on its tax exemption. If there has been a ruling, request the date of the ruling and 

the section of the Code under which the exemption was granted. 

If no ruling has been made, secure the exact legal name and address of the home and 

its reasons for believing it has a tax exempt status. Submit the information to Survivor 

Benefits along with the necessary proof. A determination on their equitable entitlement 

will be made by Survivor Benefits. 

605.55.11 Fraternal Organization Claims Reimbursement 

A fraternal organization is equitably entitled if: 

	 The organization is entitled to a tax exemption under section 501(c)(8) of the IRC of 

1954 (see FOM1 Art 6 App B for a partial list of such organizations); and 

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	 It pays B/E or furnishes goods and services in connection with the burial of the 

member; and 

	 Such payment was neither made pursuant to a plan or system providing for the 

payment of a fixed sum upon the death of a member nor because of an express 

contract with the member. 

605.55.12 Determining Tax Exempt Status of Organization 

A. General - Section 501(c) of the Internal Revenue Code (IRC) of 1954 provides 

tax exemptions for nonprofit organizations. Accept the statement of a nonprofit 

organization that it has a tax exemption under this section. A declaration to that 

effect by the accredited representative of such organization is sufficient. The 

following sections explain specific types of tax exemptions. 

B. Exemption under section 501(c)(3) - This exemption applies to a religious, 

charitable, scientific, literary, or educational organization and community chest if 

it meets all these conditions. 

1. It is organized and operated exclusively for one or more of the purposes 

specified above. That such an organization incidentally engages in other 

activities to raise money to carry out its primary purpose does not 

necessarily deprive it of exemption. 

2. Its net income does not accrue in whole or in part to the benefit of any 

private shareholder or person. 

3. It does not, by any substantial part of its activities, try to influence 

legislation by propaganda or otherwise. 

4. It does not participate in, or intervene in (including the publishing or 

distributing of statements) any political campaign on behalf of any 

candidate for public office. 

If the organization is not listed in FOM1 Art 6 App B, or is not a church cemetery 

organization, or there is doubt about the exemption, but it states that it has a 

section 501 exemption, fully develop the claim and submit to SURVIVOR 

BENEFITS for a determination whether the organization has been ruled exempt 

from income tax under section 501(c) of the IRC. 

C. Exemption under section 501(c)(8) - Nationally known and recognized fraternal 

beneficiary societies and their local lodges, chapters, etc., are exempt from 

income tax under section 501(c)(8). See FOM1 Art 6 App B for a partial list of 

such organizations. 

D. Exemption under section 501(c)(13) - This exemption applies to cemetery 

companies. According to IRS regulations, a cemetery company may be entitled 

to the 501(c)(13) exemption if it is owned by and operated exclusively for the 

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benefit of its lot owners who hold such lots for bona fide burial purposes and not 

for purposes of resale, or if the company is not operated for profit. 

E. State or local government units - State or local government units tax exempt 

status ordinarily can be determined without difficulty. The unit's connection with 

the state or local government is usually known or easily ascertained. 

605.55.13 Development When Organization Furnishes Goods, Services or Burial 

Plot, But Has Not Filed Claim 

When a claimant states on his application, or it is otherwise known, that a tax exempt 

organization furnished goods, services, or burial plot but has not filed an application, 

take action as follows: 

	 Determine the organizations eligibility for reimbursement; and 

	 Develop the value of goods, services or burial plot furnished by the organization; and 

	 Secure an application on behalf of the organization. If they do not wish to file, secure 

a signed statement on the organization's letterhead advising that they waive 

reimbursement. This may permit payment of their share to other equitably entitled 

persons. 

605.55.14 Determining Value of Goods, Services, or Burial Plots If Tax-Exempt 

Organization Is Involved 

A. General - Develop the value of goods or services furnished by an organization 

only if the organization says it has a 501(c)(3) or (13) tax exemption or that a 

request for an exemption is pending. In the latter case, when application is 

transmitted, advise on transmittal that tax exemption is pending. HQ will then 

make a decision on the organization's tax exempt status. 

To develop the value of items furnished, ask the organization for a signed 

statement of their value. When one unit of the organization furnishes goods, 

services or a burial plot, and bills another unit of the same organization, accept 

without question the receipted bill as evidence of value. 

B. Goods - Advise the organization to base the value of the cost of the goods at the 

time furnished on the basis of the organization's going to its regular source of 

supply and replacing the goods furnished. 

C. Services - If services are performed by an employee of the organization, gauge 

the value by the employee's wage scale and the length of time devoted to such 

services. When the organization contracts for such services with an outsider, 

e.g., a funeral home, local grave digger, etc., the amount the organization pays 

for such services should be reimbursable on a "payment" basis. 

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D. Burial plot - If an organization furnishes a burial plot, it may be equitably entitled 

to the extent of the reasonable value of the plot. What is a reasonable value 

depends upon the type and location of the space furnished. 

A municipality may be equitably entitled with respect to space furnished in a 

potter's field. Also, a cemetery company which has a 501(c)(3) or (13) exemption 

may be equitably entitled with respect to a plot furnished even though it is in the 

business of selling lots. 

NOTE: When one of these organizations pays ALL of the B/E, and the amount of 

such expenses clearly exceeds the amount of the LSDP, it is not necessary to be 

precise as to the actual cost of the items furnished. When the LSDP is prorated, 

however, and the organization's stated value raises a question regarding its 

reasonableness, the other claimant(s) should be asked about the accuracy of the 

organization's stated value. If they consider it reasonable, we will accept the 

stated value. If the other claimants question the expenses claimed by the 

organization, inform Survivor Benefits. Survivor Benefits will make a decision 

regarding the appropriate share of the LSDP due each claimant. 

605.55.15 State or Local Government Unit Pays B/E 

A. General - A state or local governmental unit (including the District of Columbia) 

paying the B/E of an insured employee may be equitably entitled. For example, a 

welfare department may pay the B/E of an indigent individual from old age 

assistance funds or a government unit (other than a county in Indiana or 

Montana) may make an allowance toward the B/E of a veteran. It is not the 

RRB's policy to solicit applications from such governmental units unless an RLS 

is payable and there are other beneficiaries involved or unless part of the B/E are 

paid by the employee's estate and we may make payment to the estate under 

"No Administration" procedure. However, if any such unit is equitably entitled and 

voluntarily indicates a desire to file, obtain an application. 

A political subdivision of Indiana or Montana may not file for reimbursement of an 

allowance toward the B/E of a veteran. 

Any authorized official of such unit may file an application on its behalf. A 

statement by the official on the application under "Remarks" that he is authorized 

is ordinarily acceptable evidence of his authority; in case of doubt, secure more 

formal evidence. 

B. Entitlement when state reimburses county - Various state welfare programs 

provide for reimbursing a county that pays the B/E of an indigent individual. 

When this is done, the state is entitled to all or a proportionate share of the LSDP 

depending upon the extent of reimbursement. However, when the state has 

authorized the county to make application for the state's share of the LSDP, the 

full amount can be paid to the county even though it has been, or expects to be 

reimbursed by the state. 

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C. Entitlement when government unit pays B/E from funds placed in its care 

pursuant to a trust agreement - When an employee transfers his assets, 

including personal funds, property or proceeds from insurance policies, to a 

governmental unit under a trust agreement whereby such unit assumes the 

obligation of defraying the B/E from the funds entrusted to its care, award the 

LSDP to such unit. Handle as if developing from an executor or administrator 

who pays the decedent's B/E from assets of the employee's estate in his 

custody. 

605.60 Persons Not Equitably Entitled 

605.60.1 Persons Not Equitably Entitled 

The following persons are not considered equitably entitled. Any B/E paid by these 

persons must be subtracted from the total reimbursable B/E. 

A. The United States Government or its wholly-owned agency or a foreign 

government. 

NOTE: The U.S. Government recognizes Indian tribes as sovereign nations. 

Therefore, Indian tribes also are not equitably entitled. 

B. A person contractually obligated to pay the employee's B/E. 

C. A person who pays the B/E of the employee under a plan, system or a general 

practice if the employee was a member or an employee of such person (effective 

9-15-67, this does not apply to fraternal organizations and nursing homes paying 

B/E under a general practice). 

D. A person who has been wholly reimbursed from other sources. A person who 

has been PARTIALLY reimbursed from other sources is not equitably entitled to 

the extent of such partial reimbursement. If the payer of B/E expects 

reimbursement from the estate or other sources, see FOM1 605.55.4. 

E. A person finally convicted of the felonious homicide of the employee. 

F. A person who for any other reason has no equity with regard to the payment of 

the employee's B/E. 

605.60.2 B/E Paid Under Workman's Compensation Law 

No one is equitably entitled to reimbursement for B/E paid under a burial benefit 

provision of a workmen's compensation statute, EXCEPT for payments in Kentucky, 

South Carolina and Texas. 

A. Kentucky - The person entitled to compensation or, if none, the employee's 

estate is equitably entitled when B/E are paid under the Kentucky Workman's 

Compensation Act. 

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B. South Carolina - Dependents entitled to compensation, if any, are equitably 

entitled to the extent compensation is withheld from the dependent. 

C. Texas - Dependents entitled to compensation, if any, are equitably entitled when 

B/E are paid under the Texas Workman's Compensation Act. When there are no 

dependents, no one is equitably entitled. 

605.65 Burial Expenses 

605.65.1 What Constitutes Burial Expenses 

A. General - Burial expenses (B/E) mean expenses in connection with the actual 

burial or other disposition of the remains of a deceased person. They include the 

burial plot, casket, clothing, cremation, urn, death certificates, embalming, 

flowers, hearse and car for funeral procession, minister, monument, newspaper 

notices, niche, opening and closing of grave, permits, perpetual care of grave, 

preparation of body for burial, religious services, shoes, telegrams, telephone 

calls, transportation of the body, traveling expenses (round trip) of person 

escorting the corpse or completing burial arrangements, expenses of scattering 

decedent’s ashes, etc. 

Expenses such as a luncheon after the funeral, travel expenses of close relatives 

not involved in making the funeral arrangements, etc., are not B/E. 

When there is some question whether an item is a B/E and its exclusion will not 

change the amount of the LSDP or the share due the person, exclude it in 

computing total reimbursable B/E. 

B. Burial plots - When a person is equitably entitled because he paid for or 

furnished a burial plot, use the value of the plot at the time of the employee's 

burial in computing the person's share of the total reimbursable B/E and the 

LSDP. A receipted bill or a signed statement by a responsible official of the 

cemetery about the value of the plot proves its value. 

When a multiple plot is bought or furnished for the burial of two or more persons, 

(one of whom is the employee) a proportionate part of its value is used in 

computing the reimbursable expenses. The burial plot is not a reimbursable item 

if the employee owned or had an interest in the plot in which he was buried. 

605.65.2 When Burial Expenses Must Be Paid 

There is no time limit when B/E must be paid. However, an applicant must file a timely 

application and pay such expenses to qualify for all or part of the LSDP. B/E still unpaid 

after the time for filing elapses must still be included in reimbursable B/E. 

It is not necessary that B/E be paid before the application is filed; if an application is 

filed before B/E are paid, or additional B/E are paid after the application is filed, a 

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supplemental application will be required to update payment and reimbursement 

information. 

If the application is not timely filed, the applicant cannot qualify for all or part of the 

LSDP, even if he pays B/E before the period for filing elapses. 

NOTE: If an application was timely filed but denied because of failure to submit proof of 

B/E, the application can be reopened if the proof is submitted within one year of the 

denial notice, even if submitted after the two year filing period has expired (see below 

for handling instructions). However, if there is a discrepancy between the proof and the 

application that affects the payment of the LSDP, a new application must be filed. The 

two year filing limit does apply to the new application. Proof of B/E can also be 

submitted one year or more after the denial notice, but only if the applicant can prove it 

was not due to his or her negligence or lack of effort in obtaining the proof. 

When the proof is submitted, compare the B/E information on the proof with the B/E 

information on the imaged original application. If there is no discrepancy that affects 

payment of the LSDP, complete the proofs screen. Enter in Remarks that the 

application was previously denied because proof of payment of B/E was not submitted, 

it is being reopened because the proof has been submitted and that the proof is online. 

Also send an email to SBD advising that the proof is online. 

605.65.3 Inquiry About LSDP Before Burial Expenses Are Paid 

A. FH expenses are unpaid - If someone inquires about the LSDP before FH 

expenses are paid, advise the person about the provisions of the law. If the 

person has assumed responsibility for the payment of FH expenses, he has the 

option of: 

	 Paying the FH and filing as an equitably entitled person; or 

	 Filing an application to authorize payment to the FH. 

The decision must be his; do not recommend any course of action. In explaining 

the provisions of the law, point out the time limit for filing an application. 

B. Burial expenses other than FH expenses are unpaid - If other B/E are involved 

and the person inquiring wants to file an application in advance of paying such 

expenses, tell him: 

	 FH expenses have first priority for reimbursement; and 

	 An application must be filed within 2 years of the date the employee died; and 

	 Such B/E must be paid before we can reimburse; payment cannot be 

assigned to cover any expenses that are not incurred by or through a FH. 

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605.65.4 Proof That Burial Expenses Have Been Paid 

A. General - To prove payment of B/E, the applicant must ordinarily furnish either a 

fully completed Form G-273a or an itemized, receipted statement from the 

funeral director and other persons furnishing goods or services. If a receipt is 

furnished, it must identify the deceased person and must show: 

1. The total amount of the ordinary B/E. This includes professional services, 

casket, embalming, certificates and permits. The cost of the individual 

items included in the ordinary B/E need not be shown. 

2. The amount of other B/E not included in 1 above. This may include 

additional services and goods provided such as: burial plot, opening and 

closing grave, transportation of body, etc. When cash was advanced for 

any such items, the itemized statement should be noted to this effect. 

3. The total amount of all B/E. 

4. The name of each person who paid part of the B/E. 

5. The amount and date of each payment. 

6. The amount of B/E unpaid, if any. 

If it is established, or it is a known fact, that it is not the funeral director's practice 

to give itemized bills or Form SSA-2872 is submitted, waive the requirement that 

the bill be itemized. 

If there is a discrepancy between the amount alleged by the applicant and the 

amount shown by the receipts, do not reconcile it unless it will affect the amount 

payable to the funeral home or to the equitably entitled person(s). If it is 

necessary to reconcile a discrepancy, secure: 

	 A new Form G-273a or proof of B/E from the funeral home if the previous one 

submitted was incorrect; or 

	 A signed statement from the applicant if the Application AA-21 previously 

submitted was incorrect. The signed statement is acceptable in lieu of a 

Supp. AA-21. 

Be sure that all B/E are accounted for, especially when the file shows that the 

employee died in one locality and was buried in another one. 

B. Acceptable proofs - Acceptable proofs that B/E were paid are: 

1. The original receipted bill or certified copy; or 

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2. Form G-273a, "Statement of Burial Expenses" (may also be used as 

POD); (NOTE: The signature on a G-273a received by facsimile is 

acceptable if the LSDP is to be paid to someone other than the funeral 

home or if the payer of the burial expenses has assigned the LSDP to the 

funeral home. If the LSDP is to be paid to the funeral home and it has not 

been assigned by the payer of the burial expenses, a hard copy of the 

signed G-273a is required; or 

3. Form SSA-2872, SSA's "Statement of Burial Expenses." 

C. Signature on funeral home bill - When the bill carries the words "received 

payment," "paid in full," "paid," or a phrase with the same meaning, accept it if it 

is initialed, signed or contains a rubber stamp imprint that includes the name of 

the funeral director or other person furnishing burial goods or services. 

D. When receipt not required – Although securing a receipt for any B/E is always 

preferred, a receipt is not required for flowers, telegrams, phone calls, payment 

for religious ceremony, traveling expenses of person escorting the body during 

shipment or any other item for which a receipt may not be usually given. Listing 

these expenses and their respective amounts on the signed application or in a 

signed statement is acceptable. 

605.65.5 All Burial Expenses Not Accounted For 

When all expenses usually necessary for burial are not accounted for, additional 

development must be done. For example, if a proof shows an item of expense for 

sending the body from one city to another, but the statement of expenses does not 

include any item for goods or services in one of the cities, ask the applicant whether 

there were any expenses in that city. 

605.65.6 Deduction For Allowances By VA For Burial, Plot, Etc. 

A burial allowance of as much as $300 is payable by the VA towards the B/E of a 

veteran in non-service connected cases. Unless the veteran is buried in a national 

cemetery, a plot or interment allowance of up to $150.00 towards such costs is also 

payable. If the veteran died in a VA hospital or other Veteran's facility, the VA may also 

pay the cost of moving the body to the place of burial. 

A larger burial allowance is payable by the VA when the veteran's death is service 

connected. In such a case, reasonable burial and funeral expenses up to a maximum of 

$1100 are payable (the maximum payable when the death of a Federal employee is the 

result of an injury incurred in the course of his employment.) 

When a burial allowance, a plot allowance and/or the cost of transporting a body is paid 

by the VA or when a claim for such allowance(s) has been or will be filed, deduct the 

amount of such allowance(s) from: 

 The total burial expenses; and 

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	 The amount paid by the person who filed or expects to file a claim for the 

allowance(s). 

605.65.7 B/E Paid By Department Of Defense 

A. General - When a member of the Armed Forces dies while at his post of duty or 

at a service hospital, the appropriate service department provides for the 

preparation, embalming, encasement, and shipment of the body. The necessary 

burial goods and services are furnished by the Armed Forces or by an undertaker 

under contract with the Department of Defense. 

If the serviceman dies while temporarily away from his duty station, the 

Department of Defense pays the person who furnishes the burial, or reimburses 

the person who pays B/E. When the body is buried in a national cemetery, the 

Department of Defense ordinarily furnishes all services. 

B. Deductions From Reimbursable B/E When Serviceman Dies on Active Duty - If 

the applicant pays or assumes responsibility for payment of B/E and files or will 

file a claim for payment or reimbursement from the Department of Defense or a 

service department, deduct the amount indicated in 1 or 2 below. 

If no claim has been or will be filed, do not make a deduction. 

1. Service Department Makes Initial Arrangements - The amount the 

Department of Defense reimburses private persons depends upon the 

type of cemetery in which the serviceperson is interred or reinterred. Make 

deductions from B/E as follows: 

a. Civilian Cemetery - If interment is in a private or civilian cemetery 

make the following deductions: 

Date of Interment Deduction 

7/1/74 or later $700 

7/1/71 - 6/30/74 $625 

2/1/68 - 6/30/71 $500 

7/1/66 - 1/31/68 $300 

6/30/66 or earlier $200 

b. Government Cemetery - If the serviceperson's remains were 

consigned to a funeral home and interment is made in a national or 

post cemetery, make the following deductions: 

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Date of Interment Deduction 

7/1/74 or later $450 

7/1/71 - 6/30/74 $375 

2/1/68 - 6/30/71 $250 

7/1/66 - 1/31/68 $150 

6/30/66 or earlier $125 

When the serviceperson's remains are consigned direct to the 

superintendent of a national or post cemetery for interment, deduct 

$75. 

Interment expenses include undertaker's fees, obituary notices, 

flowers, hearse, transportation for immediate relatives to and from 

the cemetery, minister's fees, vault, grave spaces, and preparation 

of the grave. 

2. Private Person Makes All Arrangements - Occasionally, private persons 

make all arrangements, including preparation and shipment of the 

remains. The amount the Department of Defense reimburses such 

persons varies, but it never exceeds the amount given in 1 above. 

If the applicant does not know the amount of reimbursement, assume that 

B/E will be paid in full. When the applicant alleges that less than the full 

amount of B/E was paid, ask him to submit evidence of the amount of 

reimbursement. 

605.65.8 Computing Total Reimbursable B/E 

After determining the total amount of B/E claimed, compute the total reimbursable B/E 

by subtracting the following non-reimbursable B/E: 

A. B/E paid or reimbursed by the U.S. Government or a Foreign Government; and 

B. B/E paid by a person convicted of the employee's felonious homicide; and 

C. Questionable items of B/E which, if omitted, will not affect payment of the LSDP 

in any way; and 

D. B/E to which no one is equitably entitled; and 

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E. Small amounts contributed to a fund by numerous unidentified persons, providing 

it is ascertained from the custodian or another person with knowledge that: 

1. The amount contributed by each person is small (not more than $2.00 

each); and 

2. A list of the contributors with the amount each gave cannot be furnished; 

and 

3. The contributors have not asked to have their names and the amount 

given recorded nor have they shown any intention of seeking 

reimbursement. 

NOTE: If the names of some of the contributors and the amounts given (even 

though small) can be furnished, such contributions are reimbursable. 

605.70 Types Of Funds Used To Pay Burial Expenses 

605.70.1 Personal Funds 

The following may all be considered personal funds for the purpose of determining who 

is equitably entitled to reimbursement for having paid B/E: 

A. An individual's own personal funds. 

B. Funds owned jointly with the employee or a person equitably entitled who died 

before negotiating the LSDP check. This category includes proceeds of a bank 

account owned jointly with the deceased person. You may assume that the 

survivor or the person who withdrew the money has a right to the proceeds. 

When a question arises as to the person's right to withdraw funds from a joint 

account, ask him to furnish the following information: 

	 A copy of the application for a joint account made when the account was 

opened; and 

	 A statement by the bank as to who has the right to the proceeds. 

Submit the above information and other proofs to Survivor Benefits. Survivor 

Benefits will make a final decision as to whether the funds may be considered 

personal funds. 

C. Contributions of several persons into a pooled fund 

1. Contributions - When burial expenses are paid by contributions, each 

contributor is equitably entitled to the extent of his contribution. Each 

contributor may file for the share of the LSDP to which he is entitled or 

assign his interest in the LSDP to another equitably entitled person by 

completing a Form G-131. 

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2. Pooled funds When burial expenses are paid by pooled contributions, the 

LSDP can be paid to the custodian of the fund if: 

	 The custodian pays the funeral director with the pooled funds; and 

	 Each contributor asks in writing that the entire LSDP be paid to the 

custodian (this statement is not required when each contributor gave 

only a small amount); and 

	 The custodian files for the LSDP and furnishes a signed statement 

which lists the contributors, the amounts given, and includes a 

statement similar to the following: 

"I agree to distribute the lump-sum payment proportionately to the 

contributors of the fund used to pay the burial expenses. I am applying for 

all the persons listed herein." 

Develop from the custodian of funds only when a large number of persons 

contributed various amounts and it would be impractical to secure 

applications from everyone who contributed. If the number of contributors 

is not large, develop fully from each person or secure "Assignment of 

Interest" Forms G-131. 

D. Promissory notes - A negotiable promissory note given by an applicant and 

accepted by the FH is considered payment of FH expenses. Consider the note 

as the applicant's personal funds in determining equitable entitlement to 

reimbursement for having paid B/E. The fact that the money for that purpose 

was secured by a negotiable promissory note is immaterial. 

Do not suggest this method of paying B/E to an applicant, funeral director or 

other interested person; however, upon specific inquiry refer applicant to an 

attorney. 

E. Funds received pursuant to a contract or under a plan, system, or general 

practice - When the proceeds of an insurance contract, plan, system or general 

practice are used to pay B/E, determine whether there is a named beneficiary to 

such proceeds and whether he survived the employee. If there is a named 

beneficiary who survived the employee, the proceeds are considered his 

personal funds and as such make him equitably entitled unless he is acting as 

the agent or employee of the "person" who provides the money for the burial. 

The named beneficiary's estate is equitably entitled if he dies before negotiating 

the LSDP check. 

605.70.2 Estate Funds 

The following are all considered estate funds for the purpose of determining who is 

equitably entitled to reimbursement for having paid B/E: 

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A. Money found among the deceased's effects. 

B. Funds obtained by selling the deceased's real or personal property. 

C. Money on deposit in a bank account held only by the deceased. Money from a 

joint account is the personal property of the survivor. 

D. Unpaid wages that the deceased's employer was holding for him. 

E. Funds paid under a contract, plan, system or general practice. When the 

proceeds of contract, plan, system or general practice are used to pay B/E, 

determine whether there is a named beneficiary to such proceeds and whether 

he survived the employee. The proceeds are estate funds only if: 

	 No beneficiary was named; or 

	 The named beneficiary died before the employee; or 

	 The named beneficiary is the funeral home or director; or 

	 The named beneficiary is acting as the agent or employee of the "person" 

who provided the money for the burial. 

If the claimant does not know whether a beneficiary was named or there is 

reason to doubt his statement that no beneficiary was named or survived the 

employee, ask him to submit a statement from the "person" who furnished the 

money for the burial or from two close relatives of the employee. 

F. Money from a trust fund - When money from a trust fund is used to pay B/E, the 

lump-sum death payment can be paid to the Trust Officer for the estate of the 

deceased employee under the following conditions: 

	 The trust remains in force up to the employee's death, and 

	 The trust agreement provides for disposition of the residue of the fund. 

If there is a question concerning any of these conditions or there is conflicting 

information, ask the Trust Officer to submit a certified copy of the trust 

agreement. 

G. Burial expenses paid by a guardian or conservator from the deceased 

employee's funds - A guardianship or conservatorship ceases upon the ward's 

death. However, some states have statutes which authorize a guardian to 

contract for and pay burial expenses from guardianship funds following the death 

of the ward. 

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When information indicates that burial expenses were paid from guardianship or 

conservatorship funds, and the guardian indicates that he had statutory authority 

to pay burial expenses with the deceased's funds, develop as follows: 

1. Secure an Application AA-21, proof of the employee's death, and proof of 

payment of burial expenses from the guardian or conservator; and 

2. Ask the guardian to submit a statement from the court that indicates the 

guardian or conservator had the authority to pay burial expenses with 

guardianship funds. 

If the guardian or conservator submits proof of court authority to pay burial 

expenses from the deceased's funds, the LSDP can be paid to the 

guardian or conservator. Otherwise, the LSDP will be adjudicated under 

"No Administration" procedure in FOM1 620.45. 

H. Burial contracted for by employee prior to death - If the employee pays for his 

burial before his death, consider his estate equitably entitled. The employee may 

prepay his B/E by one of the following methods: 

	 He may give a stipulated amount to a Funeral Home in return for a promise to 

bury; or 

	 He may pay premiums to a burial insurance company under a form of burial 

insurance contract, or he may pay dues to an organization that maintains a 

burial benefit plan; or 

	 He may contract for his burial with a home for the aged which is NOT tax 

exempt; or 

	 He may work for an employer who is under a contractual obligation to pay his 

B/E or who has a definitely established plan or system for the payment of B/E. 

605.75 Payment Of LSDP To An Estate 

When estate funds are used to pay burial expenses, the estate is equitably entitled. 

Payment due an estate can be made to the legal representative for the estate. When a 

legal representative has not or will not be appointed, the amount due the estate may not 

be payable. 

605.75.1 Payment to Estate When Administrator or Executor Has Been Appointed 

and Paid B/E 

A. Burial expenses paid from estate funds and an administrator has been appointed 

Develop an Application AA-21 from the administrator. The application must be 

accompanied by one of the following: 

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	 A certified copy of letters of appointment; 

	 A "short form" certificate; 

	 A certified copy of the order of appointment; 

	 Any official document issued by the clerk or other proper official of the 

appointing court confirming the administrator's appointment. 

Certification of appointment made more than one year before filing an 

application, and transcriptions or certifications by anyone other than the proper 

court official are not acceptable. In such cases, have the administrator furnish a 

certified statement from the clerk of court showing that the appointment is still in 

full force and effect. 

When payment is made to an administrator, any part of the amount due the 

estate which, if paid, would escheat to the state is withheld. Escheat occurs 

when there are no survivors legally entitled by reason of relationship to share in 

the estate, and the assets of the estate exceed the liabilities. The probability of 

escheat exists mostly in those cases in which a public administrator is appointed 

to represent the estate. When an administrator shows no relatives on the 

Application AA-21 be sure to ask him whether any relatives survive. Note in the 

remarks section of the Application AA-21 or the Form G-626 whether or not any 

relatives survive who could inherit the employee's estate. When there are 

relatives, secure the name and relationship of at least one of them. 

B. Burial expenses paid from estate funds and an executor has been appointed 

Develop an Application AA-21 from the executor. The application must be 

accompanied by a certified copy of letters testamentary. Letters testamentary 

issued more than 1 year before filing are not acceptable unless a certified 

statement from the clerk of the court is furnished showing that the letters 

testamentary is still in full force and effect. 

When the deceased leaves a will and an executor is appointed, the fact that the 

will is submitted for probate is sufficient basis to assume that there are persons 

legally entitled to share in the estate and that there will be no escheat to the 

state. 

NOTE: If the legal representative states that he used his own funds to pay B/E, 

he is paid as an equitably entitled person in his own right instead of as the legal 

representative and letters testamentary are not required. 

605.75.2 Payment to Estate When There Is No Legal Representative 

When an estate is equitably entitled to any part of an LSDP and no legal representative 

is to be appointed, the estate has already been closed or the estate will be handled 

under a state's "small estate statutes," payment may be made under "No 

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Administration" procedure. All or part of the LSDP may not be paid when "No 

Administration" is involved. Refer to FOM1 620 for detailed information about handling 

”Small Estate” and “No Administration” cases. 

605.80 Deferred Lump Sum Death Payment 

605.80.1 General 

A deferred LSDP is payable on the wage and/or compensation record of an insured 

employee if, after all current deductions required (e.g., work, child not in care), the total 

amount of the insurance annuities paid to survivors within 1 year after the employee's 

death is less than the LSDP that would have been paid if an insurance annuity had not 

been payable to any person for the month in which the employee died. 

The deferred LSDP is payable at the expiration of 1 year after the employee's death. 

For example if the employee died on 3-23-2005, the deferred LSDP is payable after 3-

23-2006. 

Payment of the deferred LSDP is handled by Survivor Benefits. 

605.80.2 Priority of Payment 

A deferred LSDP is payable only to the widow(er) "living with" or “living in the same 

household with” the employee at the time of his death. Children and parents of the 

deceased employee cannot qualify for a deferred LSDP. 

605.80.3 Entitlement Requirements 

To be entitled to the deferred LSDP, a person must: 

A. Be the widow(er) of the employee. The widow(er) is not disqualified because of 

remarriage on or before the first anniversary of the employee's death. 

B. Have been "living with" the employee at the time of his death if the employee 

acquired his 120th month of railroad service before 1975. 

C. Have been "living in the same household" with the employee at the time of his 

death if the employee acquired his 120th month of railroad service after 1974. 

D. Be alive on the first anniversary of the employee's death. 

E. Have filed a timely application. Refer to FOM1 605.80.5 for detailed information 

about when a deferred LSDP application is considered timely filed. 

If the widow(er) meets the stated conditions and dies before receiving the deferred 

LSDP or negotiating the check, if the deferred LSDP was paid by check, the amount is 

not payable to anyone. 

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605.80.4 Amount of Payment 

The deferred LSDP is equal to the amount by which the regular LSDP exceeds the total 

amount of the insurance annuities accruing (after all deductions due to work or child not 

in care) to the survivors of an employee in the 12-month period beginning with the 

month in which the employee died. 

605.80.5 Application Requirement 

An application for a deferred LSDP must be filed no later than the second anniversary of 

the employee's death. 

An application filed for any type of survivor payment in the same case protects eligibility 

for the deferred LSDP. 

If a widow(er) cancels an application for an insurance annuity, the application continues 

to be effective as an application for a deferred lump-sum payment. 

The failure of the widow(er) to file an application in time to receive insurance annuities 

within the 1-year period following the employee's death does not prevent payment of the 

deferred LSDP. However, some type of survivor application must have been filed timely 

for the widow(er) to be entitled to the deferred LSDP. 

EXAMPLE 1: The employee died on 1-15-2004. The L/W widow attained age 60 prior 

to the employee's death; however, because she was currently employed she did not 

want to file for an annuity. She is advised by the field office that a deferred LSDP may 

be payable a year after the employee's death if no monthly benefits are paid. She is 

also told to contact the field office before the second anniversary of the employee's 

death to file for payment of the deferred LSDP. The widow contacts the field office on 

1-14-2006 and files for a WIA. The widow will be paid the deferred LSDP based on her 

WIA application filed within 2 years of the employee's death. 

EXAMPLE 2: The employee died 7-5-2004. The L/W widow's DOB is 10-3-1941; 

however, she does not wish to file for a reduced age annuity. She is advised by the field 

office that a deferred LSDP may be payable if the monthly benefits paid in the year after 

the employee's death are less than the LSDP that would have been payable. She is 

further advised to contact the field office before the second anniversary of the 

employee's death to file for the deferred LSDP. The widow contacts the field office and 

files for a WIA on October 1, 2006. The widow would not qualify for a deferred LSDP 

because an application was not filed within 2 years of the employee's death. However, 

if widow had filed an Application AA-21 before 7/6/2006 she would have qualified for a 

deferred LSDP. 

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605.85 Foreign Deaths 

605.85.1 General 

Survivor Benefits handles the payment of the LSDP in foreign death cases. 

Development in Canadian and Mexican cases should be handled by the field offices 

assigned to the provinces, states or territories of those countries. Development in other 

foreign cases should be handled by the Chicago field office, often with the assistance of 

the local U.S. Foreign Service Office. 

Cases involving deaths in foreign countries are handled the same way as any other 

lump sum case, except if the death occurred in Cape Verde Islands, Greece, Lebanon, 

Turkey and Norway. For these areas it is necessary to limit the amount of lump-sum 

awards since the expenses claimed do not always represent the actual cost of a burial. 

Refer to FOM1 605.85.3 for the dollar limits of reimbursable B/E for these areas. 

Special procedures have also been included in FOM1 605.85.4 for handling deaths in 

Norway due to the fact that the Norwegian government has designated its probate 

courts to administer all estates for which an executor was not named. 

605.85.2 B/E Paid In Foreign Currency 

When burial expenses are paid in foreign currency, reimburse the claimant who is 

equitably entitled in an amount of U.S. currency equal to the exchange value of the 

foreign currency on the day that the B/E are paid by the claimant. To determine that 

amount, complete Form G-310, Conversion of Foreign Currency, and forward it to your 

lead or supervisor. (S)he will obtain the exchange rate and return the form to you. 

605.85.3 Foreign Claims 

A. Limitations on Reimbursable B/E - For the areas listed below, the maximum 

reimbursable B/E are given. Approval of B/E exceeding these limits is left to the 

discretion of the claims examiner depending on the particulars of the case. For 

example, the cost of transporting the body over a great distance or the cost of 

embalming the body in an area where it is not normally done (as in Greece) may 

increase the B/E. 

The place where the B/E were incurred will determine the amount of the lump sum. If 

B/E were incurred in more than one place, the higher allowance may be used if 25 

percent or more of the B/E were incurred in the place with the higher allowance. If 

the place where the B/E were incurred cannot be determined, assume that they 

were incurred in the place of burial. 

If more than one claimant has established entitlement, pay each a prorated share of 

the allowance for the area. If there is a discrepancy as to the total B/E claimed, 

develop to reconcile the discrepancies. 

The areas and limitations are as follows: 

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1. Cape Verde Islands 

In the Cape Verde Islands the limitation is $70. 

2. Greece 

In Greece the amount of lump sum payable is determined by the locale where 

the burial expenses were incurred. 

a. No Limitation - There is no limit on the lump sum payable where the burial 

expenses were incurred in the areas listed below. In those areas starred, 

however, there was a limitation of $230 for burial expenses incurred after 

April 1975 and before April 1977. Questions about the limitations in any areas 

listed prior to May 1975 should be referred to P&S – RAC. 

*Acharnon Kalamata *Orestias 

Argrinion *Kalymnos Patras 

*Aigion *Karditsa *Preveza 

*Alexandroupolis *Karlovasi *Ptolemais 

*Amalias *Kastoria *Pyrgos 

*Argos Katerini *Rethymnon 

*Argostoli Kavala Rhodes 

*Arta *Kilkis metropolitan 

area (see following) 

*Salamis 

Athens-Pireaus 

metropolitan area 

(see following) 

Komotini Salonika (also 

known as 

Thessaloniki) 

Canea *Kos Serrai 

Chalkis *Kozani *Siderokastron 

*Chios *Kyparissia *Sparti 

Corfu (Kerkyra) Lamia *Syros (Ermoupolis) 

*Corinthos Larisa *Trikala 

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Drama *Lefkas *Tripolis 

*Edessa *Livadia *Tyrnavos 

*Elefsis *Megara *Vathi (Samos) 

*Filiatra *Mesologion *Veria 

*Fiorina *Messini Volos 

*Gianitsa Mytilene *Xanthi 

*Grevena *Nafpactos *Zakvnthos (Zante) 

*Gythion Nafplion 

Ioannina *Naoussa 

Iraklion *Nigrita 

Included in the Athens-Pireaus area are the following municipalities: 

Aeglaeo Kallithea Nea Penteli 

Agia Barbara Kalamaki Nea Smyrna 

Agia Parashevi Kematero Neo Faliro 

Agion Anargyron Keratsini Neo Psychico 

Agios Demetrios Kesariani Nikea 

Agios Ioannis Rentis Kifisia Palco Faliro 

Amarousi Korydalos Penteli 

Argyroupolis Koakouvaoones Perama 

Byron (Vyron) Lykovrysi Persisteri 

Chaidari Mangoufana Petroupolis 

Chalandri Melissia Psychiko 

Cholargos Moschato Tavrou 

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Dafni (Ag. Demetrios) Nea Chalkidon Voula 

Drapetsona Nea Erythrea Vrilissia 

Filothe Nea Filadelfia Ymettos 

Galatsi Nea Tonia Zographou 

Glyfada (Evriali) Nea Liosia 

Included in the Salonikvriali a metropolitan area are the following: 

Ambelokepon Koufalion Salonika 

Kalamaria Neapolis Sykeon 

b. Limitation of $206 

The limit for any area not specified in (a) above is $206 for expenses incurred 

after March 1977. During the period after April 1975 and before April 1977, 

the limit for these areas was $160. Questions involving the limits in effect prior 

to May 1975 should be referred to P&S – RAC. 

3. LEBANON 

In Lebanon, similar schedules have been established. If the burial expenses 

were incurred in Beirut, the maximum allowable LSDP is $200. If the burial 

expenses were incurred in Jouniye (Jounieh), Sidon, Tripoli, or Zanle, the 

maximum allowable LSDP is $150. For any other area, the maximum allowable 

LSDP is $125. 

4. TURKEY 

In Turkey, the maximum allowable LSDP is $175 if the burial expenses were 

incurred in Ankara, Istanbul, or Izmir. In any other locale, the maximum allowable 

amount is $100. 

B. Initial Action on Protests and Complaints - If a beneficiary objects to our limitation of 

the LSDP when we pay the maximum reimbursable B/E, request the foreign service 

post having jurisdiction to investigate the validity of the claim. Use Code Letter 603 

for this purpose; enclose photocopies of the letter(s) of complaint, the application(s) 

the death certificate, the funeral bills, and the translations of these documents. 

Contact P&S – RAC for the foreign service post that has jurisdiction of the area in 

which the beneficiary lives. 

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Acknowledge the beneficiary's inquiry and tell him/her that there will be a delay in 

providing him/her with a complete answer because we are investigating the matter. 

Make no reference in the letter that we are investigating through the State 

Department. 

C. Concluding Action on Protests and Complaints - Following its investigation, the 

foreign service post sends us a report of its findings. Base your actions essentially 

on the facts and recommendations contained in the report, but also consider the 

opinions and judgments expressed by the investigator when evaluating each case. 

Take one of the conclusive actions outlined in 1 through 3 below when the 

circumstances described apply in a case. 

1. Actual B/E Equal the Amount of LSDP Already Paid - Explain to the beneficiary 

why no additional payment will be made when: 

	 The investigative report indicates that the B/E equal the amount already paid; 

or 

	 The investigator was unable to establish the exact amount, but recommends 

that reimbursement should not exceed the established schedules. 

2. Actual B/E Exceed the Amount of LSDP Already Paid - When the investigative 

report verifies that the funeral expenses exceeded the maximum reimbursable 

amount already paid, reopen the case in accordance with RCM 6.2 “Reopenings” 

and recertify the award. The total payment, of course, may not exceed the total 

LSDP payable. 

3. Foreign Service Post Fails to Establish That an Inflated Claim Was Filed - If the 

foreign service post fails to establish that an inflated claim was filed and does not 

recommend a limitation on the amount of reimbursement, allow the full amount of 

the claimed funeral expenses when supported by an itemized receipt. The total 

payment, of course, may not exceed the total LSDP payable. 

605.85.4 Burial In Norway 

A. Norwegian Burial Allowance - A burial allowance of 300 crowns (Kroner) is paid 

under the Norwegian Health and Medical Insurance Plan (Trygdekasse) in the case 

of a deceased member. However, since no one is considered equitably entitled on 

the basis of this payment, deduct it from the total B/E. If payment is to be made to 

the employee's estate, see chapter 2.10 for information about the administration of 

estates in Norway. 

B. Validity of Statements Issued by a Norwegian Probate Court - When submitted as 

evidence in the place of receipts, accept statements of a Norwegian Probate Court 

relating to death and B/E. The probate court is usually required to retain the original 

receipts covering payments made by the court (or by the authorized representative) 

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on behalf of the estate. Accept such statements, if submitted, as just and correct 

proof of payment. 

C. Corresponding With a Norwegian Probate Court - When writing to a Norwegian 

Probate Court, address the correspondence to the court and NOT to the judge of the 

court. 

When designating the court as payee on an award form or notification letter, show 

the following: "The Probate Court of . . . . . . . . . . . as administrator of the Estate of . 

. . . . . . . . . . . . . deceased". 

605.90 Employee Died Before 10-1965 

605.90.1 Conditions For Payment When Employee Died Before 10-1965 

This section is included as a historical reference. 

A. Entitlement Requirements When Employee Died After 9-1958 and Before 10-1965 - 

To be entitled to the deferred LSDP, a person had to file a timely application and: 

1. Be the widow(er), child, or parent of the deceased employee; and 

2. Be entitled to an insurance annuity on the first anniversary of the employee's 

death; and 

3. Be the person(s) to whom the deferred LSDP was payable in the order of priority 

given in sec. B, below. 

When a survivor of the employee met the conditions stated above but died before 

negotiating his/her check in payment of the deferred LSDP, the amount (s)he would 

have received became due and payable (in equal shares) to other entitled survivors 

in his/her same class. If there were no other entitled survivors in his/her same class, 

the amount was payable to entitled survivors in the next class. If there were no 

entitled survivors in the next class, the amount was not payable to anyone. 

B. Priority of Payment When Employee Died After 9-1958 and Before 10-1965 

A deferred LSDP was payable in the following order of priority and in the amount 

indicated: 

1. Widow(er): Full amount. 

2. Child(ren) of the deceased employee: Equal shares if more than one entitled 

child survived; full amount to a sole entitled child. 

3. Parent(s) of the deceased employee: One-half to each parent if both were 

entitled to payment; full amount to a sole entitled parent. 

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If an insurance annuitant's entitlement ceased IN or BEFORE the anniversary month 

of the employee's death, (s)he could not receive any portion of the deferred LSDP. 

C. Two-Year Period for Filing Application When Employee Died After 9-1958 and 

Before 10-1965 - An application for a deferred LSDP has to be filed no later than the 

second anniversary of the employee's death. 

An application previously filed for any type of survivor payment in the same case 

was considered an application for a deferred LSDP. 

A survivor's failure to file for and become entitled to an insurance annuity ON the first 

anniversary of the employee's death prevented that survivor from receiving any part 

of a deferred LSDP that otherwise was payable. 

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