Representative Payee – Use Of Social Security Funds

Representative payees are routinely appointed for children. With rare exception, a child under age 18 will have a representative payee appointed to handle his or her Social Security benefits. If the child remains eligible past age 18 and assuming no capability issue exists, benefits are sent to him or her directly, without a representative payee. Social Security benefits for children are essentially the same whether due to a parent’s retirement, death or disability. 

Based on a question received this week, today’s topic involves the use of Social Security funds received on behalf of a child by the representative payee. How SSA funds are to be used is the same for an adult.

The child involved receives Social Security survivor benefits through the work record of a deceased parent. The surviving parent, representative payee for the child’s SSA benefits, is employed and taking care of the usual family expenses. Since the parent is handling expenses, the question was if they could save the Social Security survivor benefits for future need. With some caveats, the general answer is yes.

Referring to A Guide For Representative Payees, SSA publication 05-10076, the primary use of Social Security funds is to make sure the beneficiary’s basic day-to-day needs for food and shelter are met. Here, the child is the beneficiary but this applies to adults as well. After basic needs are met, Social Security benefits can be used for the person’s medical and dental care, if not covered by health insurance, and for personal needs, such as clothing and recreation. Remaining funds are to be saved for future need, preferably in an interest-bearing account, separately identified as belonging to the beneficiary.

Here, the parent is independently taking care of the child’s expenses. Since basic food and shelter plus additional financial needs of the child are met, saving the monthly Social Security survivor benefits for future need appears to be appropriate. If unmet needs existed, saving the Social Security benefits would serve little purpose and would not be in the child’s, or other beneficiary, best interests.

If you are now a representative payee or anticipate applying to be one for someone soon, review the representative payee section on the Social Security website, For often asked questions, go to the representative payee FAQ section. 

One more thing: unlike Social Security benefits, eligibility for the income based Supplemental Security Income (SSI) program has income and resource limits. Combined with other resources, saved funds can end SSI eligibility. If you are representative payee for a person receiving SSI, or if you receive SSI yourself, read What You Need To Know When You Get Supplemental Security Income (SSI), publication 05-11011.

Publications are available online, by calling the national toll-free number 1-800-772-1213 (TTY 1-800-325-0778) or from any Social Security office.