What Can You Spend Social Security Child Survivor Benefits On?

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All Social Security survivor benefits must be spent for the child's well-being. (Image: Jupiterimages/Stockbyte/Getty Images)

When a parent of a minor child dies and has had Social Security taxes long enough, the child is entitled to survivor benefits until he is 18 or 19 if he is still in high school. If you are receiving the Social Security benefits on behalf of a child, you are required to use them for the child's care and well-being.

Your Responsibility

As a representative payee, you have three basic responsibilities. The first is to know the needs of the child so that the benefits are spent for his care and well-being. Second, each year the SSA will send out a spending form that you must complete and return. Third, any changes that affect the child's eligibility for benefits must be reported to the SSA.

Use of Benefits

Benefits should first be applied to day-to-day needs, such as food and shelter. If the child needs medical or dental care that is not covered by insurance, the benefits should be used to meet those needs. Benefits can also be used for personal needs, such as clothing or recreation. If you have unused funds after meeting the child's financial needs, they must be put in a savings account.

Handling Past Benefits

Payment of the first benefit often lags behind the date of eligibility. This means the first payment can be a rather large sum. After the first payment has been used to meet day-to-day expenses, you can use what's left to improve the child's daily living conditions, such as moving to a home closer to school or other family members. The primary goal is to spend the funds for the child's benefit.

How Funds are Held

The child's benefits must never be mixed with your funds or those belonging to anyone else. The only exception is a checking ac count used for common family needs. But the child's portion that is not spent must be put in a separate savings account.

Record Keeping

You must keep records of the benefits you receive for the child and how they are spent. The best approach is to keep a log of money spent in two categories. One category is food and housing, and the other is personal needs, such as medical, dental, clothing and recreation. The SSA provides a worksheet for this purpose that must be filled out and returned every year.

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