If you're a representative payee managing SSI benefits for a child under 18 who receives a large lump-sum back payment, the Social Security Administration (SSA) will require you to open a dedicated account.
This isn't just a regular savings account—it comes with strict rules about how it must be titled, managed, and used.
In this article, we'll cover:
- What a dedicated account is
- When you're required to open one
- Where to open the account
- How to title it correctly
- What to avoid when setting it up
1. What Is a Dedicated Account?
A dedicated account is a special bank account used to hold large, past-due Supplemental Security Income (SSI) payments for a child with a disability.
These funds must be kept separate from the child's regular monthly benefits and can only be used for certain disability-related expenses. The SSA monitors these accounts closely and requires annual reporting.
Allowable expenses from a dedicated account include:
- Medical treatment and related expenses
- Education and job training
- Personal needs assistance
- Special equipment or housing modifications
- Therapy and rehabilitation services
2. When Are You Required to Open One?
You must open a dedicated account if:
- You are the representative payee for a child under 18, and
- The child receives a backpay deposit from SSI that's more than six months of their current monthly benefit
SSA will notify you when a dedicated account is required—and you must open it before receiving the lump-sum payment.
Important: Failing to open a dedicated account when required can result in loss of your representative payee status and potential legal consequences.
3. Where Can You Open a Dedicated Account?
You can open the account at:
- A traditional bank or credit union
- An online bank that supports representative payee accounts
- Any financial institution that offers checking, savings, or money market accounts
Avoid investment accounts (CDs, mutual funds, stocks)—they're not allowed for this purpose.
Pro tip: Choose a bank that allows you to label or track the account separately, so you don't accidentally mix funds.
4. How Should the Account Be Titled?
The account must be titled to reflect:
- That you are the representative payee
- That the money belongs to the child
- That the account is a dedicated account for past-due SSI benefits
A correct example would look like:
"Jamie Johnson by Taylor Smith, Representative Payee – Dedicated Account"
This tells the SSA, the bank, and any auditors that the money is not yours—and that it's subject to special spending rules.
5. What to Avoid When Setting It Up
To stay compliant, make sure you:
- Do NOT mix regular SSI deposits or other funds into the account
- Do NOT use the account for non-disability-related purchases
- Do NOT give the child direct access to the funds
- Do NOT delay opening the account—SSA may revoke your payee status if you wait too long
Also, keep all documentation from the bank and SSA related to the account setup. You'll need it for annual reporting.
6. How Purple Helps You Manage It
Purple is designed to help representative payees manage SSI funds with clarity, compliance, and confidence.
With Purple, you can:
- Open and label dedicated accounts separately from regular checking
- Track spending with categories and receipts
- Store SSA documents and benefit letters in-app
- Prepare for your annual SSA-6233 reporting
- Avoid risky mistakes that could affect the child's benefits
Whether you're managing benefits for one child or several, Purple gives you the tools to stay organized and compliant every step of the way.