Your SSI or SSDI benefits are meant to help you cover your basic needs. But many people wonder exactly what they can—and can't—spend their benefits on. Here's what you need to know about using your disability benefits.
In this article, we'll cover:
- What SSI and SSDI can pay for
- Rules for each benefit type
- Special rules for representative payees
- How to budget your benefits
1. What Your Benefits Can Pay For
The good news: For most people, there are no restrictions on what you can spend your SSI or SSDI benefits on. Once the money is yours, you can use it for any legal expense.
Common expenses benefits cover:
Housing:
- Rent or mortgage payments
- Property taxes
- Homeowner's or renter's insurance
- Security deposits
Utilities:
- Electric and gas
- Water and sewer
- Trash collection
- Phone and internet
Food:
- Groceries
- Household supplies
- Restaurant meals
Transportation:
- Car payments
- Auto insurance
- Gas and maintenance
- Public transit
- Rideshare services
Healthcare:
- Medical copays and deductibles
- Prescriptions
- Medical equipment
- Dental and vision care
Personal needs:
- Clothing
- Personal hygiene items
- Entertainment
- Education expenses
2. SSI vs. SSDI: Different Rules
SSDI (Social Security Disability Insurance)
Spending rules:
- No restrictions on how you spend benefits
- Money is yours to use as you see fit
- No reporting of spending required
- No asset limits to worry about
Why?
- SSDI is based on your work history
- You earned these benefits through payroll taxes
- It's similar to retirement benefits
- Your spending doesn't affect your eligibility
SSI (Supplemental Security Income)
Spending considerations:
- No restrictions on spending categories
- BUT you have a $2,000 resource limit
- Saving too much can affect benefits
- Some purchases can help you stay under the limit
Strategic spending for SSI:
- Pay bills on time to keep balance low
- Buy needed items before saving
- Purchase exempt resources (home, car, household goods)
- Don't let money accumulate
Exempt resources (don't count toward $2,000 limit):
- Your home
- One vehicle
- Household goods and personal effects
- Life insurance with face value under $1,500
- Burial plots and certain burial funds
3. Special Rules for Representative Payees
If someone else manages your benefits as a representative payee, there ARE rules about spending.
Payee spending priorities:
First priority: Current maintenance
- Food and housing
- Clothing
- Medical care
- Personal comfort items
- Recreation
Second priority: Unpaid bills
- Past due rent or mortgage
- Utility arrears
- Medical bills
Third priority: Saving
- For future needs
- Emergency fund
- Must be kept in dedicated account
What payees CANNOT do:
- Spend money on themselves
- Mix beneficiary funds with their own
- Make risky investments
- Give money away as gifts
- Pay themselves (unless authorized organization)
Payee record keeping:
- Must track all spending
- Save receipts
- Complete annual accounting form
- Show spending was for beneficiary
4. Dedicated Account Rules (Child SSI)
Children receiving SSI back pay over $1,000 must have a dedicated account with strict spending rules.
Dedicated accounts CAN pay for:
- Education and job training
- Special equipment related to disability
- Therapy and rehabilitation
- Medical treatment not covered by insurance
- Personal needs assistance
Dedicated accounts CANNOT pay for:
- Basic living expenses
- Food and clothing
- Regular monthly bills
- Entertainment
5. How to Budget Your Benefits
Calculate your monthly income:
- SSI: Up to $967/month (2025 federal rate)
- SSDI: Based on your work history (average ~$1,500)
- Some states add to SSI
Prioritize essential expenses:
| Priority | Expense | Typical % | |----------|---------|-----------| | 1 | Housing | 30-40% | | 2 | Food | 15-20% | | 3 | Utilities | 10-15% | | 4 | Transportation | 10-15% | | 5 | Healthcare | 5-10% | | 6 | Personal | 5-10% |
Tips for making benefits stretch:
- Apply for SNAP (food stamps)
- Get Lifeline phone/internet discount
- Apply for LIHEAP utility assistance
- Look for Section 8 housing
- Use Medicaid/Medicare for healthcare
6. What If Benefits Aren't Enough?
Additional assistance programs:
- SNAP (food stamps)
- Medicaid (healthcare)
- Section 8 (housing)
- LIHEAP (utilities)
- Lifeline (phone/internet)
State and local help:
- Emergency assistance programs
- Food banks
- Utility assistance
- Prescription assistance programs
Work incentives:
- Trial Work Period (SSDI)
- Earned income exclusions (SSI)
- PASS plans
- Ticket to Work
7. Spending Red Flags to Avoid
For SSI recipients:
- Don't save more than $2,000 (or $3,000 for couples)
- Don't give money away to reduce resources
- Don't buy things for others with your benefits
- Don't hide assets or accounts
For everyone:
- Avoid payday loans and high-interest debt
- Don't fall for scams targeting benefit recipients
- Be cautious of "too good to be true" offers
- Don't share your benefit information
8. Common Questions
Can I buy a car with SSI? Yes! And one vehicle is exempt from the resource limit.
Can I go on vacation with my benefits? Yes, though SSI has rules about being outside the US.
Can I give money to family? For SSDI, yes. For SSI, giving away money to reduce resources is not allowed and can cause problems.
Can I buy lottery tickets? Legally yes, but it's not a wise use of limited income. And if you win, it could affect SSI.
Can I invest my SSDI? Yes, SSDI has no resource limits so you can invest freely.
How Purple Helps
Purple makes managing your benefits easier:
- See exactly where your money goes
- Track spending by category
- Get early access to benefits up to 4 days sooner
- No hidden fees eating into your benefits
- Tools designed for people on fixed incomes
With Purple, you can make sure every dollar of your benefits goes where you need it most.