What Is a Dedicated Account — and When Is It Required?
- Purple
- Aug 21
- 3 min read
If you’re acting as a representative payee for a disabled child under 18 who receives SSI and is set to receive a large lump‑sum of past‑due payments, you’ll need to use something called a dedicated account. But what exactly does that mean—and how do you manage it correctly?
In this article, we’ll explore:
What a dedicated account is
When it’s required
How to set one up
What the funds can—and can’t—be used for
How to stay compliant
What Purple does to help
Let’s dive in.
1. What Is a Dedicated Account?
A dedicated account is a separate bank account—either checking, savings, or money market—that a representative payee must open when a disabled child under age 18 becomes eligible for a large payment of past‑due SSI benefits. This happens when the lump sum exceeds six months of the current monthly SSI rate .
It’s designed to keep those past‑due funds separate from regular monthly benefits and to restrict their use to disability‑related needs. The SSA does not count the money (or accrued interest) in that account as part of the child’s SSI resource limit—so long as the funds follow the rules.
2. When Is a Dedicated Account Required?
As soon as the SSA notifies you that the back payment is large enough (exceeding six times the current monthly benefit), you must open the dedicated account. If you don’t open it within 30 days, the SSA may appoint a different payee .
3. How to Set Up a Dedicated Account
Open a checking, savings, or money market account—no CDs, stocks, bonds, mutual funds, or trusts allowed .
It must be separate from any other accounts you use for regular SSI benefits. Other funds—besides certain past‑due SSI deposits—cannot be commingled .
The account should clearly show in its title that the child owns the funds; for example: ”(Child’s Name) by (Your Name), Representative Payee”, including earned interest.
4. What Can You Use the Funds For?
Only very specific, disability‑related expenses are allowed:
Medical treatment
Education or job skills training
If tied to the child’s impairment:
Personal needs assistance (e.g., in‑home nursing)
Special equipment
Housing modifications
Therapy or rehabilitation
Legal fees related to establishing the SSI claim
These funds cannot be used for basic living costs—like food, clothing, or shelter—that should come from regular monthly benefits . However, in emergencies where lack of funds might cause homelessness or malnutrition, the SSA may allow exceptions .
5. How to Stay Compliant
Compliance is key:
Keep detailed receipts, bank statements, and records for at least two years
Submit the annual SSA‑6233 Representative Payee Report covering both the dedicated and regular benefit accounts
If you are replaced as payee, complete a final accounting and return the remaining funds to SSA for transfer to the new dedicated account or to the individual
Misapplication of funds (using them for non‑allowed items) can result in repayment obligations
6. How Purple Can Help
Dedicated accounts may be niche—but managing them doesn’t have to be. Purple is built to support rep payees managing complex benefit flows:
Organize and separate dedicated account funds with strict categorization
Attach receipts, notes, and records to each transaction—making annual SSA reporting smoother
Track updates across multiple types of benefits and accounts in one app
Receive reminders and guidance around recordkeeping best practices
Managing a dedicated account can feel daunting—but Purple makes it clearer, safer, and more transparent.