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Several inquiries have been received by MISSA about lump sum benefits, more particularly from foreigners who have made contributions to the Retirement Fund. They said that they have heard of a new law which would entitle workers who have at least 10 years (or 40 quarters) of contributions to receive lump sum benefits outright. This rumor is not true.
One basic requirement about lump sum benefits is that the wage earner should be at least 60 years of age or disabled upon application for lump sum benefits and is not eligible to receive normal retirement benefits. This means that the applicant must have less than 38 quarters of contributions and at least 60 years of age, or disabled (regardless of age).
A lump sum benefit is also given to the surviving family of a wage earner who dies while the deceased wage earner is not yet eligible to receive retirement benefits.
Pursuant to to Section 141 of the Social Security Act (the “Act”) found at 49 MIRC 141:
(1) If a worker or self-employed worker permanently ceases to work for reason of old age, illness, physical disability or any other reason which has an adverse effect on the ability of such person to perform his duties, and rights to insurance benefits under Section 36 through 39 of this Act with respect to the worker or self-employed worker have not otherwise accrued, a lump sum benefit equal to 4% of his cumulative covered earnings shall be paid to such worker in a lump sum payment.
Cumulative covered earnings (CCE) means the sum of all of the covered earnings of a worker or self-employed worker.
(2) if after a worker or a self-employed worker dies and all rights to survivor's insurance benefits with respect to the worker or self-employed worker have ceased, a lump sum benefit equal to 4% of his cumulative covered earnings, less the amount of the benefits actually received by the worker or the self-employed worker, or his survivors, if any, shall be paid as set forth in Subsection (3) and (4) of this Section.
(3) The lump sum benefit payable under Subsection (2) shall be paid to the spouse, and in the absence of ther spouse, shall be paid to the children in equal shares, or guardian, if such children are minors, and in the absence of both, shall be paid to the parents in equal shares.
(4) In the absence of any of the persons referred to in Subsection (3), the lump sum benefit shall be paid to the persons specified under the prevailing laws and customs with respect to intestate secession in the domicile of the deceased worker's or the deceased self-employed worker's at his death.