For example, you can use the money to pay for:
- better medical care
- insurance premiums
- physical or occupational therapy
- a motorized wheelchair (if not covered by health insurance)
- reconstructive dental care (if not covered by health insurance)
- hearing aids (if not covered by health insurance)
- modifications to a vehicle to accommodate the beneficiary's disability (i.e. hand controls)
- special education or other training programs
Full Answer
How does Social Security back pay work with a representative payee?
If a representative payee helps you manage your Social Security benefits, back pay will go directly to them through direct deposit. Although the funds go directly to them, the money received from SSDI needs to be used on you, the disability benefit recipient. How do I get back pay through my Representative Payee?
What is the purpose of back-pay?
Back pay serves to remedy lost earnings that the victims would have received absent discrimination. OFCCP’s Directive 2013-04, “Calculating Back Pay as a Part of Make-Whole Relief for Victims of Employment Discrimination,” provides additional guidance on calculating back-pay.
What can my payee do with the money I pay?
After paying those expenses, your payee can use the rest of the money to do things like pay any past-due bills you may have or give you spending money. If there’s money left, your payee should save it for you.
How do I get back pay from the Social Security Administration?
Call 855-702-9061. You may be entitled to back pay and retroactive benefits. Back payments are past due benefits. That is, the money the Social Security Administration (SSA) would have started to pay you if they had approved your application immediately after you filed.
What can you spend SSI backpay on?
These funds can only be used to pay for:medical treatment (that is not covered by insurance)education.job training.personal needs assistance, and.other appropriate items or services related directly to the child's disability.
What can a representative payee spend money on?
You can only use money in a dedicated account for the following expenses: Medical treatment and education or job skills training. Personal needs related to the child's qualifying disability — such as therapy and rehabilitation, special equipment, and housing modifications.
What can a representative payee not do?
Limitations on What a Representative Payee Can DoSteal from the beneficiary. Payees are forbidden from mixing his or her personal funds with the beneficiary's funds. ... Misuse funds. ... Act as a legal representative. ... Falsify benefit reports.
Can I spend my SSI on anything?
While you can use your SSI benefits for virtually anything that's legal, you must be wary of using the money in ways that can increase your resources. For example, purchasing luxury items is not prohibited, but it can increase your assets and may push your resources past the limit.
Can a representative payee use a debit card?
It is important to remember that you are not allowed to give the beneficiary direct access to the bank account as the representative payee. That means you cannot just hand over the debit card to your child. However, many companies offer programs that help young people (and adults) manage their money.
Can a representative payee cash a check?
Yes. SHOULD you cash such a check? You will be on notice of a potetnial breach of fiduciary duty and could be liable if Social Security determines that the rep payee misused the funds. The check should be properly deposited into a Rep Payee account.
What are the rules for a representative payee?
Who Needs a Representative Payee? The law requires most minor children and all legally incompetent adults to have payees. We presume an adult is capable to manage his or her own benefits. If it appears this may not be true, we gather evidence to decide if we need to appoint a representative payee.
How often does SSI check your bank accounts?
As we explain in this blog post, SSI can check your bank accounts anywhere from every one year to six years, or when you experience certain life-changing experiences. The 2022 maximum amount of available financial resources for SSI eligibility remains at $2,000 for individuals and $3,000 for couples.
How do I get rid of a representative payee?
When you want to change your rep payee, go to your Social Security Administration field office and request a change of payee. You will be given a form to fill out, and guidance will be provided if necessary.
Can a payee withhold money?
Your Representative Payee Cannot Withhold Funds as Punishment. The funds in a beneficiary's account are to be used for the beneficiary only. Period. The representative payee cannot make decisions about the funds that are not in the best interests of the beneficiary.
Will I lose my SSI if I get a settlement?
One question that we are asked quite often from our clients and their families is how a personal injury settlement will affect their Supplemental Security Income (SSI) benefits. The short answer is “Yes, a personal injury settlement will likely affect your SSI benefits.”
Can you save your disability money?
Yes. If you receive Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) you can have a savings account.
What happens if a representative payee misuse funds?
When a representative payee misuses funds, we may refer the case for criminal prosecution. The penalty upon conviction for a payee's misuse of funds may be a fine of up to $250,000, imprisonment up to 10 years, or both.
How often does SSI check your bank accounts?
As we explain in this blog post, SSI can check your bank accounts anywhere from every one year to six years, or when you experience certain life-changing experiences. The 2022 maximum amount of available financial resources for SSI eligibility remains at $2,000 for individuals and $3,000 for couples.
What can a dedicated account be used for?
WHAT IS A DEDICATED ACCOUNT? A dedicated account is a separate financial institution account that the representative payee of a disabled child under age 18 is required to open, when the child is eligible for large past-due payments (usually any payment covering more than 6 months at the current benefit rate).
What to do with a back payment?
The first thing that you must do with a back payment is to make sure that the beneficiary's current needs are met. Current needs are anything the beneficiary needs right away, such as:
How much money can I have to pay back SSI?
In order to protect an otherwise eligible individual from losing benefits, the SSA gives payees nine months to spend any back payment funds.
What is Supplemental Security Income?
Supplemental Security income is a need-based benefit for disabled people with little or no work history and few assets. If you are a payee for an SSI recipient, you must be particularly careful as to how back payments are spent.
How often do you have to file a report with the SSA?
Record Keeping. Representative payees are required to file a report with the SSA once a year that details how a beneficiary's money was spent. The SSA may, however, ask to look at the records more than once a year. If you misuse benefits you can face criminal charges punishable by fines and incarceration.
What can you do with the money if the beneficiary already owns a home?
Home repair. If the beneficiary already owns a home, you can use the money to make repairs and to improve the beneficiary's access to and enjoyment of the home. Examples of these kinds of improvements are:
What can you use the money left over from a beneficiary?
For example, you can use the money to pay for: better medical care. insurance premiums.
What is personal needs assistance?
Personal needs assistance is any help that is required that relates directly to the child's disability. Here are some examples: a motorized wheelchair (or other special equipment) a wheel chair ramp in the child's home. vehicle modifications needed to transport the child, therapy, and. rehabilitation.
What is back pay?
Back pay should reflect total compensation lost by the victim due to the discriminatory employment action, practice or procedure. Many elements of compensation, in addition to salary or wages, are normally part of a back-pay award ( e.g., overtime and premium pay, incentive pay, raises, bonuses, sales commissions, cost-of-living increases, tips, ...
What is the purpose of back pay?
Back pay serves to remedy lost earnings that the victims would have received absent discrimination. OFCCP’s Directive 2013-04, “Calculating Back Pay as a Part of Make-Whole Relief for Victims of Employment Discrimination,” provides additional guidance on calculating back-pay.
How often does the IRS adjust its interest rate?
2. Rate Adjustments. The IRS may adjust its rate on a quarterly basis. The interest rates applicable to various periods are available on the IRS website at https://apps.irs.gov/app/picklist/list/federalRates.html.
Why do we need tax offsets?
Tax offsets. In individual cases, a tax offset may be needed to restore the economic position of the victim. If a back pay award causes an individual to be pushed into a higher tax bracket or the cash value of tax-deductible benefits is high, it may be appropriate to include in the remedy a tax offset to make the victim whole.
Is fringe benefit taxable?
Benefits. Since employer contributions to most fringe benefits, such as the employer paid portion of health insurance premiums or pension funds, are not taxable (whether retroactive or not), they are not subject to withholding. 5. Tax offsets.
Is unemployment insurance a deduction for a back pay award?
In almost all states, FUTA (unemployment insurance) taxes are an expense paid only by the employer ( i.e., there is no matching employee contribution). Therefore, the employer should not take an offset or deduction for FUTA when computing back pay awards unless the particular state where the affected party was or would have been employed required employers to with hold FUTA taxes from employees’ wages or salaries during the time period for which the employer is calculating a back pay award .
Is interim pay deductible?
Interim Earnings. If a victim earned money from employment elsewhere during the interim, this amount is deductible from total back pay. Not all financial compensation received by the victim during the back pay period, however, constitutes “interim earnings.”.
What happens if a payee misuses benefits?
10. Remember, the law requires representative payees to use the benefits properly. If a payee misuses benefits, they must repay the misused funds. A payee who’s convicted of misusing funds may be fined and imprisoned.
What does it mean to be a representative payee?
If you agree to serve as a representative payee, you’ve taken on an important responsibility that can make a positive difference in the beneficiary’s life.
How much money do you need to continue receiving SSI?
To continue receiving SSI, a beneficiary must not have resources worth more than $2,000 ($3,000 for couples). We don’t count all resources; however, some items you buy could cause the beneficiary to lose their SSI benefits. Any money you don’t spend could also count as a resource. Check with us before making major purchases for an SSI beneficiary.
What is the best way to save money for a beneficiary?
The preferred ways of saving is U.S. Savings Bonds or an interest-paying bank account that’s insured under either federal or state law. Interest earned belongs to the beneficiary.
What can you spend the money on for a beneficiary?
You may also spend some of the money for the beneficiary’s recreation, such as movies, concerts, or magazine subscriptions.
What do you do with a beneficiary's money?
First, you must take care of the beneficiary’s day-to- day needs for food and shelter. Then, you must use the money for the beneficiary’s medical and dental care that’s not covered by health insurance. You can also pay for the beneficiary’s personal needs, such as clothing and recreation. You must save any money left after you pay for the beneficiary’s needs, preferably in U.S. Savings Bonds or an interest-paying bank account, insured under either federal or state law.
Where to save money after a 401(k)?
over, you must save it, preferably in U.S. Savings Bonds or an interest-paying bank account, insured under either federal or state law.
How long does it take to complete a spend down?
Note that the individual does not have a period of a month or 30 days to complete the spend down. If a lump sum is received on the 20th of August for example, the spend down must be completed in 11 days to bring resources below the applicable limit before September 1.
When to provide documentation of bank balance?
Have the bank provide documentation of the bank balance on the first day of the next month to verify the spend down was successfully completed.
How to maintain public benefit eligibility after lump sum?
There are legal strategies that can help an individual maintain public benefit eligibility after receiving a lump sum. Transferring excess funds to a properly drafted and administered special needs trust is a common strategy. In several instances, however, a spend down might be a better choice. If the amount of the excess resources is relatively small, it might make more sense to spend the money rather than to incur the set-up and ongoing administration costs associated with a special needs trust. A spend down could also be a strong option is in the situation where the beneficiary has current need for high-ticket items such as a home, a handicap-modified vehicle, or even to pay off debt. Spending for these items would not be possible if the beneficiary were to rely solely on public benefits.
When to spend down SSI?
It is wise to have a spending plan in place prior to receipt of the lump sum. In order to minimize the loss of SSI and Medicaid, goods and services must be purchased in the same calendar month in which the lump sum is received. Note that the individual does not have a period of a month or 30 days to complete the spend down. If a lump sum is received on the 20th of August for example, the spend down must be completed in 11 days to bring resources below the applicable limit before September 1.
When do you report spend down to Social Security?
The spend down must be reported to Social Security by the 10th day of the month following the month in which the lump sum was received. State Medicaid agencies have similar or even earlier reporting requirements. Here are some guidelines to follow in order to properly prepare for the reporting:
What happens if you receive a sum in excess of the resource limit?
Upon the receipt of sums in excess of the resource limits, the individual can opt to discontinue benefits, shelter the excess amounts in certain types of special needs trusts, or attempt to re-qualify for benefits through a process known as a “spend down.”.
What are the most common public benefits?
Some of the most common public benefits include Supplemental Security Income (SSI), administered by the Social Security Administration, and Medicaid, administered separately in each state.
What can a representative payee spend disability money on?
Answer: After paying for the disabled person's food, shelter, clothing, medical and dental costs, and any rehab expenses, the representative payee can spend disability benefit money on personal comfort items and recreation costs (such as outings, movie tickets, or magazine subscriptions).
How to pay a representative payee?
Here are a few more details for representative payees: 1 A representative payee can use benefit money to pay past-due bills for the beneficiary (the person who is eligible for Social Security benefits) -- if the beneficiary's current needs are paid for. 2 If there is money leftover after meeting the beneficiary's current needs and some discretionary spending, it must be saved for the beneficiary in a separate bank account. 3 The payee is not allowed to take a fee for payee services from the monthly benefit (unless the payee is a nonprofit organizational payee with written approval from Social Security to charge a fee). 4 Each year, the payee will have to fill out a form accounting for how the benefits were spent. Social Security will send the form to the representative payee each year.
Can a disabled person spend their disability benefits on themselves?
After paying for the disabled person's food, shelter, clothing, medical and dental costs, and any rehab expenses, the representative payee can spend disability benefit money on personal comfort items and recreation costs (such as outings, movie tickets, or magazine subscriptions). The disabled person does have the right to spend some discretionary money himself or herself, once the payee has made sure the person's needs are met. (However, if there are drug or alcohol abuse issues, spending money should be given in small amounts and monitored as much as possible.)
Where is money saved for a beneficiary?
If there is money leftover after meeting the beneficiary's current needs and some discretionary spending, it must be saved for the beneficiary in a separate bank account.
Can a representative payee use Social Security benefits?
A representative payee can use benefit money to pay past-due bills for the beneficiary (the person who is eligible for Social Security benefits) -- if the beneficiary's current needs are paid for.
Does Social Security allow discretionary spending?
As far as discretionary spending goes, Social Security evaluates what's reasonable spending on a case-by-case basis. The payee really needs to know how the individual is living and what his or her needs are. This is why Social Security doesn't publish a list of personal comfort, recreation, or entertainment expenses that are and are not allowed.
Current Needs
Improving Living Conditions
- If, once the beneficiary's current needs are met, there are funds left over, you can use this to help make the beneficiary's living conditions better. For example, you can use the money to pay for: 1. better medical care 2. insurance premiums 3. physical or occupational therapy 4. a motorized wheelchair(if not covered by health insurance) 5. recons...
Special Purchases
- In some cases, there may be enough money left over to make significant major purchases that would greatly improve the beneficiary's life. Here are some examples. Home.You can use the funds to make a down payment on the purchase of a home for the beneficiary or to pay his or her mortgage. Home repair.If the beneficiary already owns a home, you can use the money to make …
Maintaining SSI Eligibility
- Supplemental Security income is a need-based benefit for disabled people with little or no work history and few assets. If you are a payee for an SSI recipient, you must be particularly careful as to how back payments are spent. This is because if an SSI recipient has more than $2,000 in countable assets (for couples, this amount is $3,000), he or she will no longer be eligible for SSI…
Blind Or Disabled Children on SSI
- Backpay benefits for disabled or blind children who receive SSI must be handled differently than those of adult recipients.
Leftover Funds
- If money remains from the disability backpay after the above expenses are paid, the money must be saved. Although the SSA does not dictate how the money should be saved, it recommends that the funds be placed in a state or federally insured interest-bearing bank account or be used to purchase U.S. Savings Bonds. Keep in mind that an individual SSI recipient cannot have more th…
Record Keeping
- Representative payees are required to file a report with the SSA once a year that details how a beneficiary's money was spent. The SSA may, however, ask to look at the records more than once a year. If you misuse benefits you can face criminal charges punishable by fines and incarceration. For more information, see our article on representative payee accounting.