Representative Payees & Dedicated Savings Accounts

Once a child is found disabled and SSI-eligible, special provisions apply to payment of their benefits because they are a minor.

Representative Payees

First, most children receiving SSI benefits have those benefits paid to a representative payee, usually that child's parent or care giver. Social Security is required to investigate potential representative payees to determine who is best suited to use the child's benefits in his/her best interests. Specifically, Social Security will consider the relationship of the payee to the recipient, the amount of interest in the payee, and the payee's ability to identify the recipient's needs. Generally, Social Security may not appoint payees who have misused benefits in the past. If Social Security becomes aware that a representative payee, including a parent, may be misusing a recipient's SSI benefits, Social Security must investigate the payee's use of SSI benefits, and will replace the payee if necessary.

In general, the representative payee, be it a parent or other person, has the following responsibilities:

Dedicated Savings Accounts

Generally, a child who is found disabled and eligible for SSI will begin receiving SSI benefits as of the first day of the calendar month following the day on which the SSI application was filed (unless the Social Security Administration finds that the child became disabled on some date after the filing date of the SSI application).

Whenever the past-due monthly benefits are more than six times the maximum monthly benefit amount or $3,474 in 2005, the payee who receives the past-due SSI benefits on behalf of the child (usually the parent) must:

These restrictions do not apply to regular monthly SSI payments which may be used to pay for any expenses that the representative payee considers to be appropriate and in the best interests of the child. In addition, any funds in dedicated accounts cannot be counted in determining income and resource eligibility for SSI.   See Financial Eligibility page

What Are "Allowable Expenses" For Which Funds In Dedicated Savings Accounts Can Be Used?

The representative payee may spend the funds in the dedicated account only for the benefit of the child and for the following specified "allowable expenses":

These are only examples. Representative payees may be able to use dedicated savings account funds to cover other costs but should consult with Social Security prior to making an expenditure to ensure that it will be an allowable use of dedicated savings accounts.

"Allowable Expenses" Do Not Cover Basic Needs Of Child

Generally, Social Security prohibits representative payees from using dedicated accounts funds to pay for their basic needs (food, shelter, clothing, and personal items) of a child. For example, a mother could not use the dedicated savings account to pay rent, or purchase food.

When Reporting To Social Security Must Be Done

Representative payees are required to keep records and receipts of all deposits to and expenditures from dedicated accounts. They must also provide these records to Social Security when asked to do so. Parents can ask Social Security to give approval for expenditure of funds before spending the money.

Penalties For Misuse Of Dedicated Savings Account Funds

If a representative payee uses the dedicated account funds in any unauthorized manner, the representative payee will be liable to Social Security for the amount of the misapplied funds.

When Dedicated Savings Account Restrictions End

The restrictions on use of dedicated account funds continue until all funds in the dedicated account are depleted or until the child is no longer eligible for SSI benefits, whichever occurs first. The restrictions continue, so long as funds remain in the dedicated account, even during the following situations: a) the child attains age 18, continues to be SSI-eligible, and receives SSI payments directly; b) a new representative payee is appointed; and c) during a period of administrative suspension during which no SSI payments are made.

Rights To Appeal Social Security Denials On "Allowable Expenses"

Using Social Security appeal procedures, a representative payee can appeal a Social Security decision that he or she did not use the funds in dedicated savings accounts to cover "allowable expenses".    See Appeal Process page


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