Q: To receive benefits, must children be living in the same household when a parent receives Social Security disability?
A: No. For Social Security retirement, disability and survivors benefits, the parent-to-child relationship is important in determining if a child is eligible for payment.
This means that otherwise eligible children born in an existing marriage, without marriage, or in an ended marriage can receive Social Security if a parent receives retirement or disability, or survivors benefits if the parent is deceased. Child benefits are payable to eligible adopted or stepchildren. For stepchildren, the parent-to-parent relationship is important because it defines the parent-to-child relationship.
For a minor, or perhaps a disabled child, a separate question is what person receives those Social Security benefits on behalf of the child. Actual custody or other legal responsibility helps determine the person or agency to receive SSA payments on behalf of a child. Usually the custodial parent will be the person selected to receive these if the parents do not live together.
For a commonplace example, assume Parent A is receiving Social Security benefits and has a biological minor child living in another town with Parent B. If all other requirements are met, the child can receive Social Security benefits through the record of Parent A. Since Parent B has custody, those SSA benefits for the child would be paid to Parent B.
Representative payee is the term Social Security uses for a person receiving benefits on behalf of another person. In the above example, Parent B is representative payee for the child.
Not just for children, representative payees are appointed to provide financial management for the Social Security and Supplemental Security Income (SSI) payments of people who are incapable of managing their own payments.
To become a representative payee, a person or agency must file an application and then provide ongoing accounting of how funds are used. Payees are appointed only for Social Security and SSI purposes and are completely different from guardianship or power of attorney. FAQ’s for representative payees are here.
Note that the Treasury Department does not recognize power of attorney for the purposes of negotiating federal payments, including Social Security or SSI checks.