You can report this in the 1099-MISC interview without requiring a Schedule C or paying self-employment tax. Since she is retired, the payment is not compensation for current work in her part, and was not sought with an intent to "earn" money - it is more properly treated as an element of her pension.
Enter the information as follows in the 1099-MISC interview:
Enter the 1099-Misc in the Other Common Income section (Enter "1099 misc" in the Search Box and Select "Jump to 1099 misc form")
For "Description", enter "Retirement Benefit"
Also check that it does not involve work like your main job, that it did not involve an intent to make money, and is not a recurring payment (received in the past or expected in the future) (yes, that is a workaround answer, but the tax treatment is correct) .
The income will be reported on line 8 of Form 1040 of your return (Other income from Schedule 1, Line 9).
