What Are Dedicated Accounts for Social Security?

I write for all three of our lines of business, but my background is predominantly in VA Disability. With that in mind, we didn’t have to deal with cases involving children in VA. Obviously, you have to be an adult to join the military, and thus the youngest person that can file a claim for VA disability is 18 years old. So when I started writing about Social Security Disability, I started noticing that we represented minors.

For the most part, there are a lot of similarities between a Social Security claim for adults and kids. However, one of the big differences is what happens when these individuals get approved. This was something that really made sense to me when I thought about what would happen if you gave a child several thousand dollars and let them be on their way.

It probably wouldn’t be a good idea. Because children should not be held responsible for their Supplemental Security Income (SSI) benefits or Social Security Direct Deposit payments, the SSA has something called “Dedicated Accounts.”

Understanding Dedicated Accounts

As a representative Social Security Payee for a disabled child under age 18 who is eligible for large past-due SSI payments (usually any payment covering more than six months of the current benefit rate), you are required to open a separate account at a financial institution, which is referred to as a “dedicated account.”

The past-due payments will be deposited directly into that dedicated account. These funds can only be used for expenses directly related to the child’s disability.

The requirements of a dedicated account are:

• It must be separate from the account used for the regular monthly benefit payment and can only be a checking, savings, or money market account.
• Other funds, except for certain past-due SSI benefits, cannot be combined with the funds in the dedicated account.
• It cannot be in the form of certificates of deposit, mutual funds, stocks, bonds, or trusts.
• The title on the dedicated account must show that the child owns the funds, including interest.

Dedicated account funds can be used for the following expenses:

• Medical treatment; and Education or job skills training.

The Social Security Administration will allow the following expenses if they benefit the child and are related to the child’s disability:

• Personal needs or assistance (e.g., in-home nursing care); special equipment; housing modification; therapy or rehabilitation; or other items or services approved by your local Social Security office, like legal fees incurred by the child in establishing a claim for disabled child’s benefits.

Dedicated accounts may not be used for basic monthly maintenance costs such as food, clothing, or shelter. The regular monthly benefit received for the child should be used for all monthly maintenance costs.

The Social Security Administration requires you as representative Social Security Payee to complete a yearly report on the use of the dedicated account funds as well as the regular monthly benefits received on the child’s behalf.

It is important to keep receipts, bank statements, and maintain an expense record for at least two years as verification of expenditures. You, as representative Social Security Payee, should be able to provide SSA with an explanation of any expenditure and how it relates to the child’s disability.

If you’d like to know more about this subject, or if you’d like a free consultation from our Social Security Disability attorneys , call us today. Fill out this form, and we will call you as soon as possible.