If I remember correctly, the money goes to a guardian for the benefit of the child.
20 years ago I knew someone who's husband was on a motorcycle and was run over and killed by a commercial truck driver (I think he was falling sleep or something.) She was a stay-at-home mom of 4 kids at the time. In the end between the settlement and the social security, she was able to continue to stay home to raise the children and college wasn't going to be a problem either.
I haven't thought of that family in years. In typing that out, I'm realizing that the American dream is still alive and well! Kids just have to be ready to sacrifice one of their parents to get it.
But that kid wasn’t orphaned. And I’m guessing that kid wasn’t getting social security. It’s possible parts of the settlement went into some kind of trust fund which the child wouldn’t have access to until reaching a certain age, or however else it was structured.
I have a pair of cousins twice removed whose father died, and their mom gets Social Security checks to help support them. Messed up part is the cousins live with my aunt (their great grandmother) because their mom and grandma are both too messed up to care for them, but if my aunt tried to get the SS money their mom would try to get the kids back (and neglect them) so she wouldn't lose the check.
Survivor children of social security beneficiaries do get social security, even if it's just one parent. It's not particularly common because you'd need to be young enough to qualify as a child, and your parent needs to be old enough to qualify for social security benefits, but some dudes have kids in their 50s and 60s.
I don't know about orphaned, but my guardians got $300/month in the 90s because my mom was on social security disability. And when I was still with my mom, I think she got $700/month on social security disability. That's with me included?
Obviously this is different from what orphans would get, and 25+ years ago. But if Musk had stolen it from us then, our situation would've been even worse...and it wasn't great to begin with. Even back then, with my mom having an incurable disability, she had to be careful of how much money extra she made from odd jobs lest they take it all away (people on disability aren't allowed to save or have above X amount in income or the benefits will be revoked). And apartments in the area were $700/month, and we weren't in section 8 housing so all of her benefits went to rent--and that was before utilities, food, etc.
From what I've heard, similar restrictions are in place now. Nobody's getting a plush ride on benefits, ever, and it's a struggle to even get on them to begin with. Even with things that are 100% disabling and incurable.
I've heard that before and it still baffles me. People on disability aid have to maintain poverty to or else be subjected to greater poverty. It sounds like an obvious joke from Futurama. Except it's real and the joke is the system.
SSDI, the main disability insurance benefit from social security, is not means tested. People pulling in millions can get it too, as long as they're disabled (and qualify from working long enough in social security paying jobs). Usually that means they're too disabled to work, but might have income from their investments or other sources. SSDI isn't means tested, but does look to your earned income to determine whether you qualify (after all, the disability payments are designed to offset the loss of earned income, but someone who does still earn doesn't need that stream of income as much).
SSI is the other disability insurance benefit from social security, and is explicitly an anti-poverty program that is means tested. So you have to demonstrate a lack of income in order to qualify.
Note that you can collect both, with concurrent benefits, but the SSI means test looks to your SSDI income, that counts against you.
There are a lot of anti poverty programs with pretty abrupt cutoffs based on income, or earned income, or even wealth, but many of the disability based ones have less stringent means testing or no means testing at all.