Rep Payee Accounts vs Dedicated Accounts: Which One Do You Need?
- Purple
- Aug 26
- 3 min read
If you’re a representative payee managing benefits for someone else—especially a child receiving backpay from SSI—you’ve likely heard of both Rep Payee Accounts and Dedicated Accounts. But what’s the difference between them? And when does Social Security require one over the other?
In this post, we’ll break down:
What a Representative Payee Account is
What a Dedicated Account is
When each is required by SSA
How the rules differ
Which one applies to your situation
1. What Is a Representative Payee Account?
A Representative Payee Account is a bank account set up by someone who has been appointed by the SSA to manage benefits on behalf of another person—often a child or adult with a disability who can’t manage their own money.
The rep payee is responsible for:
Using the funds only for the beneficiary’s needs
Keeping records of spending and saving
Reporting changes to SSA
These accounts must be titled to reflect that the funds belong to the beneficiary, not the payee. Example titling might be:
“[Beneficiary’s Name] by [Payee’s Name], representative payee”
2. What Is a Dedicated Account?
A Dedicated Account is a special type of representative payee account that’s required only when the beneficiary is under age 18 and receives a large backpay lump sum (usually more than 6 months’ worth of SSI payments).
This account must be:
Separate from the regular rep payee account
Interest-bearing
Used only for approved expenses like medical needs, education, or therapy—not food, shelter, or typical monthly expenses
SSA calls these “dedicated” because the funds are dedicated to specific uses that support the child’s development or disability-related needs.
3. When Does SSA Require Each?
Representative Payee Account: Required any time someone is managing another person’s monthly SSI or SSDI payments.
Dedicated Account: Required in addition to a rep payee account if:
The beneficiary is under 18, and
They receive more than 6 months of SSI payments as a lump sum
You cannot combine the two. Monthly checks go into the rep payee account. Backpay (if eligible) must go into a separate, dedicated account.
4. What Are the Rules for Each?
Rep Payee Account:
Used for regular expenses like food, shelter, clothing, transportation, etc.
Can retain up to $2,000 in savings for SSI recipients (unless using an ABLE account or trust)
Must submit annual reports to SSA in many cases
Dedicated Account:
Can only be used for approved categories (not rent or groceries)
Cannot be mixed with other funds
Remains in place until the child turns 18—even if monthly benefits stop
Violating the rules of a dedicated account can lead to penalties, repayment demands, or even legal consequences.
5. Which One Do You Need?
Here’s a simple way to figure it out:
If you manage ongoing monthly SSI payments for someone else:
→ You need a Representative Payee Account
If the person is under 18 and receives a large backpay check:
→ You’ll also need a Dedicated Account to hold that money separately
How Purple Helps Rep Payees Stay Compliant
Purple makes it easier to manage multiple SSA-compliant accounts—including:
Rep Payee Checking with proper titling
Dedicated Backpay Accounts
Spending limits and category tools
Document Vault to store SSA notices and receipts
Early direct deposit up to 4 days early for SSI or SSDI¹
Whether you’re managing benefits for one person or a whole family, Purple helps you stay organized—and stay on SSA’s good side.
Purple is a financial technology company, not a bank. Banking services are provided by OMB Bank, Member FDIC. The Purple Mastercard® Debit Card is issued by OMB Bank, Member FDIC, pursuant to license from Mastercard.
¹ Early access is not guaranteed and depends on payer timing. We generally make funds available on the day we receive the payment file, which may be up to 4 days early for government benefits like SSI or SSDI, and up to 2 days early for other deposits. Early access is available at no additional cost.