As Some Continue To Wait For Stimulus, Payments Sent To Those Who Are Deceased

As the federal government continues their effort to disburse stimulus funds through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, they have recently run into an issue: checks and direct deposits have been issued to those who cannot stimulate the economy—the deceased.

Local banks and residents reported receiving direct deposits and paper checks this week, made payable to those who are no longer living. Among those recipients was Lansdale Borough, Montgomery County, Mayor Garry Herbert, whose family received a check for Herbert’s grandfather, who died three years ago.

“Honestly, I was dumbfounded at first, and then incredibly frustrated by its existence,” said Herbert. “I love my grandfather and he was/is an extremely important person in my life. That being said, it is just ridiculous that he would receive a stimulus check after he passed away. Knowing my grandfather as well as I did, I am certain that he would also consider this turn of events completely asinine and illogical.”

Politico reported that while the federal government has been working to prevent payments from going to deceased taxpayers, a lack of real-time death information used by the IRS has caused checks to go to taxpayers who have died. In Herbert’s case, however, the check itself denotes that the recipient was deceased—it was marked “DECD” after the name—meaning the agency had that information available in their system at the time the check was issued.

Jim Merrill, the CEO and President of Inspire Federal Credit Union, which has locations in Bristol Borough, Middletown Township, and Newtown Township, said his financial institution received direct deposit information on the payments a few days before the funds were to be posted. The lead time allowed his staff to check the deposits and flag payments that were intended for members who they knew were deceased. 

“We were able to go through and look for deceased customers. We were able to return [the payments], but I’m sure there were some that slipped through the cracks,” Merill said, noting his organization was lucky to have the ability to review direct deposit payments early. 

In his experience, Merill said government payments going to deceased members is a “rare occurrence” that often is quickly noticed.

When reached for comment, Congressman Brian Fitzpatrick, a Republican from Middletown, said funds that were “disbursed incorrectly must be returned to the IRS and Treasury as soon as possible.” Likewise, in guidance issued to the public and financial institutions, the IRS said the entire stimulus payment issued to deceased taxpayers should be returned. 

“A payment made to someone who died before receipt of the payment should be returned to the IRS… Return the entire payment unless the payment was made to joint filers and one spouse had not died before receipt of the payment, in which case, you only need to return the portion of the payment made on account of the decedent,” the IRS said in a guidance document.

The IRS did not release what the consequences are for those who fail to return the funds. 

“People and small businesses are suffering right now,” Herbert said. “They are struggling to pay for rent, food, and other essential items. Stimulus money was supposed to be used to help them through this difficult time.”

One of those struggling people, 37-year-old Sarah Jeffers, of Sellersville in Upper Bucks County, said that she’s still awaiting the arrival of both her stimulus check and unemployment assistance, and finding out that dead people have received assistance before her leaves her feeling frustrated and hopeless.

“I have to take money from my mom for groceries at the age of 37. I don’t care how many extenuating factors there are, that’s not a fun statement to make,” said Jeffers, owner of Jeffers Estate Sales, which was forced to shut down due to the coronavirus. “It is, however, not as weird as if my late father was throwing [money] my way. There are no extenuating factors that should even lead to that.”

Jeffers said her needs are being met via her family and friends, but she has receive zero assistance to date, and is stuck in limbo as she waits for her stimulus and unemployment to arrive.

“This quarantine didn’t just affect everyone’s income; it affected our cost of living. Our cost…of living. I guess since I’m alive, I expected to be a higher priority on the list of payees,” said Jeffers. “I didn’t expect that dead people would get a check while I went without. It’s disheartening, it’s frustrating, it’s maddening. It feels unfair, just like everything else that is happening.”

As part of the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act, millions of Americans have already received stimulus payments, and those who have not will in the coming weeks, according to the IRS. 

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