If you or someone you care for receives a large past-due SSI payment, Social Security may require you to put those funds into a dedicated account. This isn't optional—it's a federal requirement with strict rules about how the money can be used.
In this article, we'll cover:
- What a dedicated account is
- When a dedicated account is required
- What dedicated account funds can be used for
- What you cannot spend the money on
- How to stay compliant with SSA rules
1. What a Dedicated Account Is
A dedicated account is a separate financial account used exclusively for past-due SSI payments made to a representative payee on behalf of a child under 18 (or an adult beneficiary in certain cases).
The account must be:
- Kept separate from other funds
- Used only for specific SSA-approved expenses
- A checking or savings account at a financial institution (not a prepaid card or cash)
- Titled to show it's a dedicated account for the beneficiary
The SSA requires this separate account to ensure large back payments are used for the beneficiary's long-term needs rather than spent quickly on non-essential items.
2. When a Dedicated Account Is Required
A dedicated account is required when a representative payee receives past-due SSI benefits that exceed the lesser of:
- 6 times the monthly SSI benefit amount, or
- The total amount owed
For example, if the current SSI benefit is $967/month, six times that amount is $5,802. If back payments exceed this threshold, a dedicated account is mandatory.
Important: This requirement applies to representative payees receiving funds on behalf of a beneficiary. It does not apply to adult SSI recipients managing their own benefits.
The SSA will notify you if a dedicated account is required. You typically have a short window—often 30 days—to open the account and provide the information to Social Security.
3. What Dedicated Account Funds Can Be Used For
The SSA limits dedicated account spending to expenses related to the beneficiary's disability. Allowed uses include:
Medical treatment and related expenses
- Medical care not covered by insurance or Medicaid
- Therapy and rehabilitation services
- Medical equipment and supplies
- Prescription medications
Education and job training
- Special education services
- Tutoring related to the disability
- Vocational training
- Assistive technology for school
Personal needs assistance
- In-home care services
- Personal attendant care
- Specialized childcare related to the disability
Assistive technology and equipment
- Wheelchairs, walkers, and mobility aids
- Communication devices
- Computer equipment for disability-related needs
Housing modifications
- Wheelchair ramps
- Accessible bathroom modifications
- Widened doorways
- Other disability-related home improvements
4. What You Cannot Spend the Money On
Dedicated account funds cannot be used for routine living expenses that would be covered by regular monthly SSI payments, including:
- Rent or mortgage payments
- Groceries and food
- Clothing (unless specifically related to the disability)
- Utility bills
- Entertainment or recreation
- Gifts for others
- Savings or investments
Important: Misusing dedicated account funds can result in serious consequences, including being removed as representative payee and being required to repay the misused funds.
5. How to Stay Compliant with SSA Rules
Managing a dedicated account requires careful documentation:
Keep detailed records Save receipts for every purchase made with dedicated account funds. Note the date, amount, vendor, and how the expense relates to the beneficiary's disability.
Don't mix funds Never deposit regular SSI payments or other money into the dedicated account. Keep it completely separate.
Report spending on the annual accounting When you complete the Representative Payee Report (Form SSA-6230), you'll need to account for dedicated account spending separately.
Save statements Keep bank statements showing the account balance and all transactions. The SSA may request this documentation.
When in doubt, don't spend If you're unsure whether an expense qualifies, contact the SSA before making the purchase. It's better to ask than to face repayment requirements later.
6. How Purple Helps You Manage Dedicated Accounts
Purple understands the unique requirements of dedicated accounts and offers features to help you stay compliant:
Proper account setup Open a dedicated account that meets SSA requirements, with correct titling from the start.
Separate from other funds Keep the dedicated account completely separate from regular SSI funds or personal accounts.
Transaction tracking See a complete history of all dedicated account spending, organized and easy to review.
Export records Download transaction history for SSA reporting or your own records.
Balance monitoring Always know exactly how much remains in the dedicated account.