Separate bank account for child's Social Security benefits - necessary or optional?

This is actually really important advice. The SSA recommends separate accounts because your daughter's benefits legally belong to her, even though you're the representative payee. If you're ever audited as a rep payee (which does happen), you need to show exactly how her benefits were spent for her care and support. Having separate accounts makes this accounting MUCH easier. If you commingle the funds in your regular account, you'll need to keep very detailed records tracking exactly which expenses were paid using her benefits. It's not about the benefit calculations - those won't be affected - it's about your responsibilities as her representative payee.

We put our sons benfit in with ours and its been fine for 3 years now. I just keep a spreadsheat of what we spend on him like his part of the mortgage, food, clothes, school stuff, sports fees etc. His benefit is only like $800 so it all goes to him anyway with how expensive kids are lol

When I was receiving benefits for my kids after their dad passed away, I WISH someone had told me to use separate accounts!! I got randomly selected for a representative payee audit and had to piece together 2 years worth of expenses from our joint account. It was a NIGHTMARE trying to document everything after the fact. The SSA gave me these forms where I had to list out every single expense paid with their benefits. The separate account isn't technically required, but trust me - SET IT UP NOW. You'll thank yourself later if you ever get audited. It's so much easier to just print out that one account's statements as proof.

My sisters kid gets SS from her dad and they said something about this too. She just uses her normal account and buys stuff for the kid with it, never had any problems. I think the SSA people just say that stuff to cover themselves honestly.

From personal experience dealing with SSA and their ridiculous bureaucracy for years - set up the separate account! I initially thought it was unnecessary too but then I got selected for a random audit in my second year as my daughter's representative payee. It was almost impossible to prove which expenses in our combined household account were specifically for her vs. for the family generally. After switching to a dedicated account for her benefits, my next audit was SO much simpler. Just printed the statements showing the deposits from SSA and then withdraw/payments for her expenses. Took 30 minutes instead of days of stress. I tried calling SSA multiple times with questions about the audit, but couldn't get through after hours on hold. Finally used Claimyr (claimyr.com) to get a callback from SSA within an hour. They have a video showing how it works at https://youtu.be/Z-BRbJw3puU. Totally worth it to avoid the usual SSA phone nightmare!

DONT MIX THE MONEY!!! My brother got in huge trouble with SSA because he was using his kids benefits for household expenses and couldn't prove what was spent directly on the kid. They made him PAY BACK almost $5000!!! The SSA is super strict about this stuff even though they don't explain it clearly.

Social Security Administration policy clearly states that while you are permitted to use a child's benefits for their food, shelter, clothing, medical care, and education, you must be able to account for how ALL funds were spent. The dedicated bank account recommendation is based on SSA's POMS section GN 00603.010, which outlines representative payee responsibilities. As a representative payee, you'll be required to complete an annual Representative Payee Report (Form SSA-623) documenting how benefits were used. While not technically required to have a separate account, it significantly simplifies your compliance obligations. If your daughter's benefit amount exceeds her direct expenses, you should also know that accumulated funds exceeding $2,000 may need to be placed in a dedicated savings account to avoid potential issues with the resource limit if she ever needs SSI benefits in the future (different from the SSDI child's benefits she's currently receiving).

whats a FRA number? is that different from regular social security?

As someone who recently went through the representative payee setup process myself, I can't stress enough how helpful everyone's advice here has been! I was in the exact same boat - the SSA worker mentioned the separate account but didn't really explain the "why" behind it. After reading through all these responses, especially the horror stories about audits, I'm definitely opening that separate account tomorrow. It sounds like the peace of mind alone is worth the minor inconvenience of managing another account. Plus, it'll make those annual reports so much easier. One question for those who've been through audits - do they give you much advance notice, or is it pretty sudden? Trying to figure out if I should get all my documentation organized right away or if I'll have time to prepare when/if it happens.