Effective Dates: 09/16/2024 - Present Previous | Next

TN 34 (09-24)

GN 00602.140 Permitted Expenditures from Dedicated Accounts

CITATIONS:

Section 1631(a)(2)(F) of the Social Security Act

A. Introduction to the use of dedicated accounts

This section describes how a representative payee (payee), or a 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. Additionally, we will refer to the person managing the dedicated account as a payee; but a recipient in direct payment can manage their own dedicated account.

Effective August 23, 1996, we must pay into a dedicated account certain past-due benefits issued to the payee of a supplemental security income (SSI) recipient who is under age 18. For the policy on which past-due benefits this affects, see SI 02101.010. 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.

This law and its restrictions represent a significant departure from the traditional approach on the use of SSI benefits by 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, 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:

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    Medical treatment,

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    Education, and

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    Job skills training.

If related to the child’s impairment:

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    Personal needs assistance,

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    Special equipment,

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    Housing modification,

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    Therapy,

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    Rehabilitation, or

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    Other items and services related to the impairment.

A payee may not use dedicated account funds for:

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    Items or services not listed in GN 00602.140B.1 in this section;

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    Repayment of SSI overpayments (see GN 00602.140D); and

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    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, of the use of benefits and the activity of funds in the dedicated account. For information on the monitoring of payees with dedicated accounts, see GN 00605.200 through GN 00605.240. See GN 00602.140C.2 for use of dedicated account monitoring procedures.

3. Misapplication of dedicated account funds

Misapplication refers to the use of dedicated account funds for non-permitted expenditures for the recipient. Misapplication occurs when a payee, or an individual who is in direct-payment 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 recipient, while the misapplication of dedicated account funds, though not permitted, can benefit the recipient. For information on the misuse of benefits, see GN 00604.001.

If SSA determines that a payee misapplied funds, we will seek repayment from the payee for the misapplied amount on a dollar-for-dollar basis. For more information on misapplication, see GN 00602.150.

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 GN 00602.150C.

5. Applicability of dedicated account rules

Dedicated account rules continue to apply until the funds become depleted or SSI 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.

When eligibility terminates, treat any funds remaining in the dedicated account as conserved funds and follow GN 00603.055 and GN 00603.100.

C. Procedure for dedicated accounts

Once the payee establishes the dedicated account (see GN 00603.025) and provides the FO with the required information for the account (see SI 01130.601D and SI 02101.010B.3), have the payee or recipient in direct payment sign and date the SSA-552, Dedicated Account Use of Funds Statement. A PDF version of form SSA-552 is available on the inForm Library website to print. An individual who needs to complete an SSA-552 has the option to use the online service to complete the form (e552) in lieu of returning a completed paper form by mail or in person. The technician can send the link to the individual to complete the form online. The link can be sent through the eMailer program.

The SSA-552 provides information on the appropriate use of dedicated account funds along with reporting responsibilities associated with the dedicated account. By signing the form, the payee acknowledges that they understand the dedicated account use restrictions.

The FO should:

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    Give the payee a copy of the signed SSA-552; and

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    Retain a copy of the SSA-552 in eDIB or the Non Disability Repository for Evidentiary Documents (NDRED) using the Evidence Portal (EP), as outlined in GN 00301.322. Once faxed into the file, follow the instructions in GN 00301.322 to destroy the paper SSA-552.

    NOTE: The submitted e552 will be electronically routed to the jurisdictional FO in WorkTrack based on the payee’s (or recipient, if in direct pay) ZIP code. If a payee completes and submits the SSA-552 online, they will have the opportunity to download a copy after submission. This is the only time they will be able to download and retain a completed copy of the form from Adobe Sign.

1. Approving or disapproving dedicated account expenditure requests

Although it is not required for a payee to seek SSA approval before making a purchase, they may want to confirm that a purchase is permitted before making it. If a payee inquires about whether a planned purchase is permitted, FO staff should use their best judgement to decide on a case-by-case basis whether the expenditure relates to, results from, or would improve the child's condition. Remember that the payee has special insight into the needs of the child and 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 has the opportunity to explain the connection between the expenditure and the child’s impairment.

The FO should take the following steps during the determination process:

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    Use the remarks segment of the Supplemental Security Record (SSR), Report of Contact page, or other mechanism to document the determination.

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    Remind the payee of record-keeping responsibilities, which include keeping all records and receipts for all dedicated account deposits and expenditures.

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    Inform the payee of annual accounting requirements.

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    Provide the payee with notice of the determination and appeal rights. See GN 00602.140H.

2. Monitoring the use of dedicated account funds

On an annual basis, payees must report expenditures from, and deposits to, dedicated accounts, see GN 00605.200 and GN 00605.215. If you receive an allegation of misapplication or misuse, take the following steps:

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    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.

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    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.

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    If there is an allegation of misuse of dedicated account funds, follow the procedures in GN 00604.020.

3. Misapplication determination

If your review of the dedicated account reveals that the payee misapplied funds for items or services not permitted, follow the instructions in GN 00602.150.

REMINDER: Misapplication is not the same as misuse.

D. Policy- Use of dedicated account funds to repay an SSI overpayment

While the individual remains eligible for SSI, dedicated account funds cannot be used to repay an SSI overpayment.

Past-due payments that are or must be paid into a dedicated account cannot be used to repay an SSI overpayment that occurred after the individual was determined to be eligible for such past-due benefits. For example, a large past-due award must be paid in installments. Between the payment of the first and second installment an overpayment is detected. The overpayment cannot be netted with nor offset from the second installment. Remember netting is the computation process used to determine whether there is an overpayment/underpayment. (See SI 02201.015).

E. 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 their 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 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. Caregiver expenses

A parent payee requests approval from dedicated account funds for respite care expenses to enable them to shop and take care of personal business, and to provide a short break from caregiving responsibilities.

Rationale for partial 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 caregiver), 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

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    A parent payee requests approval to pay for closing costs and down payment on a used trailer and lot from dedicated account funds. The child’s previous home has a contaminated water supply and lead-based paint throughout the house. The local health department requires that the family leave the house as soon as possible.

Rationale for approval: Without the expenditure approval, the child and their 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.

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    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.

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    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.

F. Other approved examples

Following are examples of other approved requests for expenditures from dedicated accounts.

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    Special clothes, such as orthopedic shoes, or adult-size pants with snap-crotch for older, incontinent children.

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    Increased electrical bills, resulting from needed mechanical devices that must frequently run.

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    Specialized day care and therapeutic recreation, such as special summer camps or Special Olympics.

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    Food and veterinary care for a guide dog or other assistive animal.

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    Repair of walls, carpets or furnishings damaged or worn by a disabled child.

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    Counseling, crisis intervention services, respite care, and therapeutic foster care, if not covered by health insurance or public service program.

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    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.

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    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.

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    Special play and recreation equipment related to the impairment.

G. 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 partial denial: The first part of this request 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.

H. 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).

I. References

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    GN 00301.322 Retention of Paper Material After Faxing into Either the eDIB Folder or Claims Folder using NDRed

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    GN 00602.030 Payment of Beneficiary's Past Due Debts - Claims of Creditors

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    GN 00602.150 Misapplication of Funds in a Dedicated Account

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    GN 00603.025 Dedicated Accounts for Disabled/Blind SSI Recipients Under Age 18

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    GN 00604.001 Overview — Misuse of Benefits

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    GN 00604.030 Preparing a Misuse Determination

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    GN 00605.200 Overview of Monitoring Representative Payees with Dedicated Accounts

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    SI 01130.601 Dedicated Accounts for Past-Due Benefits Due to Individuals Under 18 Who Have a Representative Payee

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    SI 02101.010 Past-Due Benefits Payable - Individual Alive Under Age 18 with Representative Payee - Dedicated Account Required

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J. Exhibit

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    Form SSA-552 (Dedicated Account Use of Funds Statement)

To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0200602140
GN 00602.140 - Permitted Expenditures from Dedicated Accounts - 09/16/2024
Batch run: 10/21/2024
Rev:09/16/2024