What Can a Payee Spend a Child's Social Security Money On?

What Can a Payee Spend a Child's Social Security Money On?
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It is not uncommon for children to receive Social Security Income (SSI). According to Social Security.gov, a relative, friend or other party will be appointed to take on the role of “representative payee.” Once you have satisfied a careful investigation and agree to be a representative payee, Social Security pays you the benefits to use on the child's behalf. As the payee, you will have to manage these benefits to make sure that the child’s needs are met.

The Basic Necessities Have Priority

As a representative payee, you must allocate the child’s income to prioritized resources. Food and housing expenses must take priority over all other expenses. For example, clean water, healthy food, rent, mortgage, electric, gas and adequate clothing are the necessities you must provide before such things as a video game or mp3 player.

Medical and Recreational Needs

After the basic necessities are met, use leftover money for any medical needs that are not covered by the child’s health insurance, such as the insurance deductible and co-insurance. In addition, the child may need a motorized wheelchair, bathroom support equipment or braces.

Still Have Money Left Over?

Consider using the extra funds for home repairs that will make a house or apartment safer and more accessible for the child. Perhaps the beneficiary could use a television -- which can be used by other family members, according to Social Security.gov. Or the child could benefit from his or her own car. Funds may be used to purchase a car as long as it is used for and owned by the beneficiary. Perhaps you would like to use the extra funds for education or a special trade school for the child. All of these are legal and are beneficial for the child.


Open a savings account for the child. The beneficiary must own the funds in a savings account, but the representative payee can be listed as the fiduciary (financial agent) with no access to the funds. The financial institution that holds the saving account will be able to assist you with this. US Savings bonds is another safe way to save.

Tips and Warnings

Always keep a separate record for the beneficiary's income and expenses along with receipts. Do not mix the beneficiary's financial records with the family's financial records. Every year, Social Security will ask you to fill out a form showing how the monies were spent.

Never take a fee for managing the beneficiary's funds unless you are a legal guardian with express permission from Social Security or the court. Otherwise, you may be fined or imprisoned.