The law requires that payees for disabled/blind SSI recipients under age 18 establish and maintain an account in a financial institution for certain past-due benefit payments made on or after August 23, 1996. This account must be a separate account from any other account into which regular monthly SSI payments are deposited. No other funds are allowed to be deposited in the separate account except certain subsequent SSI underpayments and past-due benefits. The law also restricts the items and services that the payee is permitted to purchase with funds in the separate account.

Because this account must be separately maintained and may only be used for certain specified expenditures, we use the term “dedicated account.”

A dedicated account may be a savings account, a checking account, or a money market account established in a financial institution. Although not specified in the law, it is preferred that the account be interest-bearing.

NOTE: Collective “dedicated” savings and checking accounts are permitted, provided they meet the conditions of GN 00603.020 -- Collective Savings and Checking Accounts and the requirements for dedicated accounts in GN 00603.025B.1. -- Dedicated Accounts.

Certificates of deposit, mutual funds, stocks, bonds, and trusts are not permitted because generally they are not considered an account in a financial institution. Direct Express accounts are not an acceptable type of account because the bank cannot recognize and establish a separate bank account for dedicated account funds.

The same policy as shown in GN 00603.010B.1. -- Account Titling applies to dedicated accounts. That is, the title must show that the child beneficiary owns the funds (including interest), but only the payee can access the funds on the child's behalf.