Dedicated Accounts

As representative payee for a disabled child under age 18 who is eligible for large past-due Supplemental Security Income (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.

About Dedicated Accounts

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 commingled 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.

Monitoring Dedicated Accounts

The Social Security Administration requires you as representative 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 payee should be able to provide us with an explanation of any expenditure and how it relates to the child’s disability.

NOTE: If you no longer serve as payee for a child with a dedicated account, you must complete a final accounting of the funds and return the balance of the account to the Social Security Administration. The amount returned will be transferred to a new dedicated account opened by the new payee.