TN 10 (03-12)
GN 00602.140 Permitted Expenditures from Dedicated Accounts
Citations:
Section 1631(a)(2)(F) of the Social Security Act
A. Introduction to dedicated accounts
This section describes the rules for dedicated accounts and how a representative payee, or recipient in direct payment, may use the funds in a dedicated account. The instructions refer to “payees” unless specific instructions refer to individuals who attain age 18.
Effective August 23, 1996, we must pay into a dedicated account certain past-due benefits issued to the representative payee of a supplemental security income (SSI) recipient who is under age 18. We call this account a dedicated account because the law prohibits the deposit of these funds into the same account as regular monthly SSI payments and limits the expenditures from this account. For information on past-due benefits payable to an individual under age 18, see SI 02101.010.
This law and its restrictions represent a significant departure from the traditional approach on the use of SSI benefits by representative payees. These restrictions limit a payee's discretion on the use of funds in a dedicated account and require the payee to use the funds in a dedicated account only for medical treatment, education, job skills training, or expenditures related in some other way to a consequence of the child’s impairment.
The law requires that we exclude dedicated account funds from resources when determining eligibility for SSI payments. For information on excluding dedicated accounts from countable resources, see SI 01130.601. This exclusion gives a payee the use of the funds over a longer period without jeopardizing the child's eligibility to receive SSI payments.
B. Policy for using dedicated accounts
1. Use of funds in a dedicated account
A payee must use dedicated account funds for the benefit of the child and only for any of the following expenses:
Medical treatment,
Education, and
Job skills training.
If related to the child’s impairment:
NOTE: While we do not require payees to obtain our approval before making expenditures in the “other” category, you should encourage them to do so. The payee should explain how or why the “other items and services” relate to the child’s impairment. Field office (FO) staff should approve or deny requests promptly because many families depend on a quick response to a request to use funds. For examples, see GN 00602.140D. in this section.
A payee may not use dedicated account funds for:
Items or services not listed in GN 00602.140B.1 in this section;
Repayment of SSI overpayments; and
Basic maintenance costs (food, housing, clothing, and personal items) not related to the child’s impairment.
EMERGENCY EXCEPTION: SSA determines that in emergency situations, where the unavailability of dedicated account funds for basic living expenses may result in the child becoming homeless or malnourished, a payee may use dedicated account funds to prevent the child from becoming homeless or malnourished, if otherwise appropriate.
2. Monitoring the use of dedicated account funds
We must monitor a payee’s use of funds from the dedicated account. Therefore, we require a payee to keep records and receipts of all deposits to, and expenditures from, the dedicated account. In addition, the payee must submit an annual accounting report, SSA-6233, Representative Payee Report of Benefits and Dedicated Account, for the use of benefits and the activity of funds in the dedicated account. For information on the monitoring of representative payees with dedicated accounts, see GN 00605.200 through GN 00605.240. For information on procedures for monitoring the use of dedicated account funds, see GN 00602.140C.2 in this section.
3. Misapplication of dedicated account funds
Misapplication refers to the use of dedicated account funds for non-permitted expenditures for the beneficiary. Misapplication of benefits occurs when a payee or an individual who is in direct-payment knowingly uses dedicated account funds for non-permitted expenditures, or basic maintenance costs (unless the emergency exception in GN 00602.140B.1 in this section applies).
Misapplication differs from misuse in that misuse occurs when a payee uses funds for a purpose other than for the use and benefit of the beneficiary while the misapplication of dedicated account funds, though not permitted, can benefit the beneficiary. For information on the misuse of benefits, see GN 00604.001.
If SSA determines that a payee knowingly misapplied funds, we will seek repayment from the payee for the misapplied amount on a dollar-for-dollar basis. For more information on repayment of misapplied funds, see SI 02220.060. For guidance on misapplication procedures see GN 00602.140C.3. in this section.
If SSA determines that an individual recipient, who is in direct-payment misapplied funds from his or her dedicated account, we will reduce future SSI benefits payable to the individual (or spouse) in an amount equal to the misapplied amount.
Misapplication of dedicated account funds is not an overpayment because we correctly paid the funds into the dedicated account. Waiver rules do not apply to the requirement to return misapplied funds because misapplication is not an overpayment.
Returned misapplied funds go back into the general revenues of the Treasury Department.
4. Appeals
Approvals and denials of expenditure requests, as well as misapplication determinations for dedicated account funds, are initial determinations with appeal rights. For information on the procedures for misapplication appeals, see SI 02220.060
5. Applicability of dedicated account rules
Dedicated account rules continue to apply until the depletion of funds or benefit eligibility terminates. This includes situations where an individual recipient attains age 18, continues to be eligible and goes into direct pay, or when a new payee is appointed.
A former payee must return conserved dedicated account funds to SSA for reissue to a new payee or to the recipient in direct payment. The new payee or recipient must establish a new dedicated account before SSA reissues the conserved dedicated account funds.
C. Procedure for dedicated accounts
Once the payee or recipient in direct payment establishes the dedicated account, and provides the FO with the required information for the account, have the payee or recipient in direct payment sign and date the SSA-552, Dedicated Account Use of Funds Statement. The SSA-552 is available electronically on the inForm website. For a locally reproducible form, see SI 02101.200.
The SSA-552 describes how to and not to use dedicated account funds, and the reporting and accounting responsibilities relevant to dedicated accounts. By signing the form, the payee or the recipient in direct payment acknowledges that he or she understands the dedicated account use restrictions.
The FO should:
Give the payee a copy of the signed SSA-552; and
Retain a copy of the document in eDIB or the Non Disability Repository for Evidentiary Documents (NDRED), as outlined in GN 00301.322. Once faxed into the file, follow the instructions in GN 00301.322 to destroy the paper SSA-552.
1. Approving or disapproving dedicated account expenditure requests
The payee, usually a parent, may have a special insight into the needs of the child and bears the responsibility to explain why or how an item or service, other than medical treatment, education, or job skills training, relates to the child’s impairment.
Because each expenditure request is unique, FO staff should consider all requests carefully, and ensure that the payee had the opportunity to explain the connection between the expenditure and the child’s impairment.
FO staff should use their best judgment to decide on a case-by-case basis whether the expenditure relates to, results from, or would improve the child’s condition.
The FO should take the following steps during the determination process:
Use the remarks segment of the supplemental security record (SSR), Report of Contact (DROC) screen, or other mechanism to document the determination.
Remind the payee of record-keeping responsibilities, which includes keeping all records and receipts for all dedicated account deposits and expenditures.
Inform the payee of annual accounting requirements.
Provide the payee with notice of the determination and appeal rights.
2. Monitoring the use of dedicated account funds
Payees must report expenditures from, and deposits to, dedicated accounts on an annual basis. On occasion, FO staff will review dedicated accounts separately from the annual accounting, due to allegations of misapplication or misuse. If you receive an allegation of misapplication or misuse, take the following steps:
Review records and receipts and determine if the expenditures are permitted according to GN 00602.140B.1. in this section. If the payee did not keep receipts, obtain a signed statement from the payee that explains the expenditures.
If the payee did not obtain SSA pre-approval before using the dedicated account funds, follow GN 00602.140B.1. and GN 00602.140C.1. in this section, to determine if we permit the expenditure.
3. Misapplication determination
If your review of the dedicated account reveals that the payee knowingly misapplied funds for items or services not permitted, prepare an SSA-553, Special Determination, see OS 15010.170. Your determination must include all relevant information to explain your determination (e.g., names, SSNs, facts of the misapplication, and basis of your determination).
NOTE: A signed SSA-552 (see SI 02101.200) or other statement from a representative payee certifying that the payee understood the dedicated account restrictions can support a finding that a payee knowingly misapplied funds. However, the certification does not automatically establish misapplication of funds. FO staff must consider any other relevant evidence, such as the nature and amount of the expenditure, and the payee's explanation of why he or she believed the expenditure was justified.
REMINDER: Misapplication is not the same as misuse.
If your review of the dedicated account indicates that the payee or individual recipient in direct payment may have actually misused benefits, fully investigate for misuse following GN 00604.020 through GN 00604.030.
If you determine that misuse occurred, take appropriate actions regarding misuse and possible restitution. For information on misuse, see GN 00604.045 and GN 00604.050. While a finding of misuse does not preclude a finding of misapplication, SSA will, in the beneficiary’s interest, pursue the finding of misuse, in which case any recovered funds go back into the dedicated account.
D. Approved expenditure examples
The following are examples of approved requests for expenditures from dedicated accounts.
1. Personal aids to facilitate living and learning
The payee requests approval to pay for computer software that enables a blind child to hear the keyed text. The software allows the child to use the computer and to keep up with the other children in his or her class.
Rationale for approval: The expenditure relates to the child’s blindness.
2. Special food for children with dietary needs
The payee requests approval for purchases of large quantities of gluten-free products for a child with celiac disease. Other residents in the group home do not commonly eat these foods.
Rationale for approval: The child could not eat a regular diet due to the impairment.
3. Attorney fees
The payee requests approval to pay for attorney fees incurred in pursuit of the child’s supplemental security income (SSI) disability claim. We paid past-due benefits directly into the dedicated account; we did not pay the attorney prior to release.
Rationale for approval: Pursuit of the child’s disability claim incurred the attorney fees.
4. Care-giver expenses
A parent payee requests approval from dedicated account funds for respite care expenses to enable him or her to shop and take care of personal business, and to provide a short break from care-giving responsibilities.
Rationale for approval: The expense provides care for the disabled child. Limit the expense approval to the actual cost of childcare (i.e., hourly wage of a nurse, skilled care-giver), and not the expenses associated with shopping.
5. Transportation expenses
A parent payee requests approval to pay an expense from dedicated account funds for a specially equipped van, to accommodate the child’s wheelchair. The payee uses the van to transport the child to therapy sessions several times a week. In addition to providing proof of the treatment history, the payee must provide a letter from the child’s doctor indicating that the treatments will continue indefinitely.
Rationale for approval: These expenses enable the child to attend impairment related therapy sessions.
6. Medical expenses
The payee requests reimbursement to sources that paid for the child’s medical expenses while the child’s SSI application was pending. The payee submits evidence of the expenses.
Rationale for approval: The repayment of debts for medical treatment, education, or job skills trainings, or other expenses that relate to the impairment is an appropriate expenditure.
7. Housing expenses
Following are examples of approved housing expenses.
Rationale for approval: Without the expenditure approval, the child and his or her family are most likely to become homeless. In addition, the substandard housing conditions could adversely affect the child’s health as it relates to the impairment.
A parent payee requests approval for moving expenses from an apartment to a rented home. The payee explains that the child has frequent, noisy outbursts and as a result, the apartment manager is going to terminate the lease.
Rationale for approval: The termination of the lease is due to the autistic child’s outbursts.
A parent payee requests approval to pay for three months of past-due rent and utility bills. The payee is behind in their bills due to the child’s hospitalization and as a result, the payee missed work. The period of past-due rent and utilities corresponds with the period of hospitalization. The landlord and utility company are now demanding payment.
Rationale for approval: The past-due debts relate directly to the child’s impairment related hospitalization. For information regarding paying debts and obtaining pre-approval, see GN 00602.030.
E. Other approved examples
Following are examples of other approved requests for expenditures from dedicated accounts.
Special clothes, such as orthopedic shoes, or adult-size pants with snap-crotch for older, incontinent children.
Increased electrical bills, resulting from needed mechanical devices that must frequently run.
Specialized day care and therapeutic recreation, such as special summer camps or Special Olympics.
Food and veterinary care for a guide dog or other assistive animal.
Repair of walls, carpets or furnishings that damaged or worn by a disabled child.
Counseling, crisis intervention services, respite care, and therapeutic foster care, if not covered by health insurance or public service program.
Household furnishings, appliances, and changes in utility services, related to the child's disability, such as air conditioning for an asthmatic child, a washing machine for an incontinent child, or installation and maintenance of a phone line to ensure ready access for a needed service.
Household renovations, where the current conditions adversely affect the child's health, such as insulating a home for a child with a respiratory or cardiovascular condition aggravated by extremes of cold or heat, or a separate bedroom for a child with emotional disabilities that require a structured setting.
Special play and recreation equipment related to the impairment.
F. Denied expenditure examples
The following are examples of denied requests for expenditures from dedicated accounts.
1. Clothing expenses
The payee requests approval to buy a new pair of shoes for the disabled child.
Rationale for denial: The shoes are not impairment related. The payee could receive approval if the child’s impairment requires orthopedic modifications. The payee needs to get verification from the vendor that the disabled child needs regular shoes as a base shoe for performing the required modifications.
2. Medical expenses
A foster care agency payee asks for approval to repay the foster care parents for regular expenses, and for psychiatric treatment related to the child’s impairment.
Rationale for denial: The expense does not relate to the child’s impairment. However, the psychiatric treatment is reimbursable due its impairment relationship.
3. Overpayment
The disabled child has a Social Security overpayment due to a parent’s wages. The payee requests approval to pay the overpayment from the child’s dedicated account funds.
Rationale for denial: The overpayment does not relate to the child’s impairment.
G. Notices
Generally, we automate the required dedicated account notices. Prepare a manual notice to approve or deny a payee’s request to spend dedicated account funds. Manual notices are available in the Document Processing System (DPS).
H. References
GN 00301.322 Retention of Paper Material After Faxing into Either the eDIB Folder or Claims Folder using NDRed
GN 00602.030 Payment of Beneficiary's Past Due Debts - Claims of Creditors
GN 00604.001 Overview — Misuse of Benefits
GN 00604.030 Preparing a Misuse Determination
GN 00605.200 Overview of Monitoring Representative Payees with Dedicated Accounts
SI 01130.601 Dedicated Accounts for Past-Due Benefits Due to Individuals Under 18 Who Have a Representative Payee
SI 02101.010 Past-Due Benefits Payable - Individual Alive Under Age 18 with Representative Payee - Dedicated Account Required
SI 02101.200 Exhibit - SSA-552 - Dedicated Account Use of Funds Statement
SI 02220.060 Misapplication of Funds in a Dedicated Account