Managing Benefits on Behalf of a Child

By Jonathan Peterson

Copyright © 2018 by AARP. All rights reserved.

When it comes to Social Security, children depend on others to make sure that they get what they qualify for and to make sure that the cash is handled properly after it arrives. The SSA appoints a type of helper, called a representative payee, to handle this responsibility.

Representative payees may be parents or other relatives. Institutions or foster care sometimes fills the role. Under certain circumstances, the SSA approves fees, as well as reimbursement for expenses, but most often the job is done for free by a relative. Overall, almost 6 million people (of all ages) who get Social Security rely on such helpers, and more than half of these beneficiaries are children.

If you’re in that helping role, you have extremely important responsibilities. You have broad license to assess a child’s needs and to make the right decisions about how to spend the benefits in the child’s best interest. The money must pay for the child’s current and foreseeable needs. Current needs include the necessities of life, such as food, clothing, and healthcare. Cash left over should be saved for the child, but savings aren’t appropriate if the child has current unmet needs. You’re required to fill out an annual form that documents how you allocated the money.

Payees also have reporting responsibilities. You’re supposed to report to the SSA any developments that could affect benefit payments, such as a change in custody of the child, adoption of the child, or divorce of the child’s parents.