Social Security child benefits for my kids - confused about separate account requirements

I went through this exact situation when I retired in 2023. Here's what you need to know about child's benefits when you're the representative payee: 1. The SSA prefers that you set up separate accounts for the children's benefits - it makes accounting cleaner. They should be dedicated accounts in your name as "representative payee for [child's name]" 2. You DON'T have to document every penny, but you do need to complete the annual Representative Payee Report (Form SSA-623) that basically asks you to categorize how the funds were spent (food, housing, education, etc.) 3. The money must be used for the children's current needs or saved for their future needs if current needs are met 4. You won't have to "pay it all back" unless you misuse the funds for something other than the children's needs Keep basic records of major expenses paid with the funds. Most families use these benefits for the children's share of housing, food, clothing, medical expenses not covered by insurance, school supplies, etc.

When my husband retired in 2024 with our younger kids, we were TOLD by the SSA office that separate accounts were MANDATORY!!!! We had to bring bank statements to our local office TWICE to prove the money was being used for the kids. The SSA worker was VERY clear that if we couldn't document everything, they would make us pay it all back. Maybe it depends on your local office? But I wouldn't risk it. Just open the separate accounts and keep ALL receipts for ANYTHING you buy for the kids using that money. Better safe than sorry!

I've been a representative payee for my grandchildren for 3 years. Here's the actual policy: The Social Security Administration strongly recommends separate accounts, but it's not technically required by law. What IS required is that you keep clear records showing the benefits were used for the children. As a representative payee, you have to file Form SSA-623 annually. This is a simple accounting of how benefits were spent (food, housing, clothing, medical, education, etc.). You don't need to attach receipts when you submit it, but you should keep records in case of an audit. Separate accounts make this accounting much easier. If you commingle the funds with your own money, you'll have a much harder time proving how the benefits were used if you're ever questioned. One more thing - any benefits not needed for current maintenance should be saved in an account that earns interest, preferably an FDIC-insured account.

I've been trying to reach someone at Social Security for WEEKS to ask similar questions about my grandson's benefits. Every time I call, I'm on hold for hours and then get disconnected. The website is no help either - just generic information, nothing specific. I finally used a service called Claimyr (claimyr.com) that got me connected to an actual SSA agent in 20 minutes! They have a video showing how it works: https://youtu.be/Z-BRbJw3puU The agent I spoke with confirmed that you should have dedicated accounts as a representative payee, but the main requirement is proper accounting of how the funds are used. I was also told they rarely request documentation unless they suspect misuse of funds.

i get benefits for my kid and nobody ever said nothing about separate accounts. been getting them for 2 years and just use the money for rent and food and stuff. never had any problems with ss asking for receipts

Something nobody mentioned - you should also check if your kids qualify for larger benefits! My friend's husband passed away and she was getting $850 per child in 2024 on his record. If your benefit is lower, maybe wait til your Full Retirement Age? I don't really understand all the rules but I think kids can get more if you get more.

my daughter gets ss benefits and we just put it in our regular account. been doing it for years no problem. as long as the money goes to the kid who cares what account its in right?

Does anyone know if these child benefits count towards the earnings limit if I'm working part-time? I heard there's a limit of like $22,000 or something before they start reducing benefits?

Thank you everyone for the helpful responses! Based on all your advice, I'm going to: 1. Set up separate accounts for each child's benefits (seems like the safest approach) 2. Keep basic records of how the money is spent on their needs 3. Make sure I understand the annual reporting requirements It sounds like there's some variation in how strictly different SSA offices enforce things, so I'll err on the side of caution. Really appreciate everyone sharing their experiences!

Smart decision on setting up the separate accounts! Just wanted to add one more tip that helped me - when you open those representative payee accounts, make sure the bank understands they're for Social Security benefits. Some banks have special account types or will waive fees for representative payee accounts. Also, I found it helpful to set up automatic transfers for a fixed amount each month to cover the kids' portion of household expenses (like their share of rent, utilities, groceries). This makes the record-keeping much simpler when it's time to fill out that annual form. You can show clear, consistent use of funds for their basic needs. The fact that you're being proactive about this shows you'll do fine as a representative payee. Good luck with your retirement filing next year!

As someone who's been through this process, I can confirm that credit unions are often more helpful with representative payee accounts! They typically have lower fees and the staff tends to be more knowledgeable about Social Security requirements. When I set up accounts for my nephew's benefits, my local credit union actually had a specific "representative payee" account type that came with no monthly fees and better interest rates. For the automatic transfers, yes - I set up a monthly transfer that covers the basic living expenses (housing, food, utilities). Then I keep the remainder in the account for other needs like clothing, medical copays, school expenses, and activities. This way I have a clear paper trail showing regular support for basic needs, plus the flexibility to handle other expenses as they come up. One more tip: save any unused benefits in a separate savings account for the child's future. The SSA actually likes to see this because it shows you're thinking about their long-term needs. When my nephew turns 18, he'll have a nice nest egg for college or getting started in life. You're definitely on the right track with your planning!

I just want to echo what others have said about credit unions being a great option for representative payee accounts. When I was researching this for my own situation, I found that many credit unions not only waive fees for these accounts but also provide better customer service when you need to explain the Social Security requirements. One thing I'd add is to ask the credit union or bank to put a note in your file that these are representative payee accounts for Social Security benefits. This can save you time later if you need to provide documentation to SSA or if there are ever any questions about the account purpose. Also, don't stress too much about the record-keeping. The annual form (SSA-623) is really straightforward - it just asks you to check boxes for general categories like "food," "housing," "clothing," etc. You're not itemizing every grocery receipt. As long as you're using the money appropriately for the children's needs (which it sounds like you absolutely will), you'll be fine. It's clear you're approaching this responsibly, and your daughters are fortunate to have a parent who's taking the time to understand all the requirements properly!

As someone who just went through setting up representative payee accounts last month, I wanted to share a few practical tips that might help: 1. When you call around to banks/credit unions, specifically ask for someone who handles "Social Security representative payee accounts" - not all staff know about these, but most institutions have someone who specializes in them. 2. Bring your Social Security award letter when you open the accounts. It makes the process much smoother and helps them set up the accounts properly. 3. Consider getting a simple checkbook register or using a basic budgeting app to track the major categories of spending. You don't need anything fancy, but having some kind of system from the start makes that annual form much easier. The learning curve isn't as steep as it initially seems, and it sounds like you're already thinking about all the right things. Your proactive approach will serve you well throughout this process!

For simple expense tracking apps, I've had good luck with Mint (it's free) and YNAB (You Need A Budget), though YNAB has a subscription fee. Mint lets you categorize transactions automatically once you connect your bank accounts, which makes the monthly tracking pretty effortless. If you prefer something even simpler, even just using the Notes app on your phone to jot down major expenses by category works well. I know someone who just keeps a running note with sections like "Housing: $X", "Food: $X", "Medical: $X" etc. and updates it monthly. The key thing I learned is that you really don't need to overcomplicate it. The SSA form is looking for reasonable accounting, not forensic bookkeeping. As long as you can show the benefits went toward the children's legitimate needs, you're in good shape. One last thing - once you get the accounts set up and the direct deposit going, the whole system kind of runs itself. The hardest part is really just the initial setup and getting into a routine with tracking. After a few months it becomes second nature!

I'm glad to see so many people sharing their experiences here! As a newcomer to this community, I wanted to add that if you're still feeling overwhelmed by all the representative payee requirements, you might want to consider reaching out to your local Area Agency on Aging or a SHINE (Serving the Health Information Needs of Everyone) counselor. These are free services that can help walk you through the Social Security process and representative payee responsibilities. Many people don't know these resources exist, but they can be incredibly helpful for understanding not just the rules, but also how they're typically enforced in your specific area. Since some folks mentioned that different SSA offices seem to have different standards, having a local expert who knows your regional office's preferences could be really valuable. Also, don't forget that as a representative payee, you have the right to contact SSA with questions about your responsibilities. While phone wait times can be long, getting official guidance directly from them can give you peace of mind that you're following the correct procedures for your specific situation.

Welcome to the community! I'm also new here but have been researching Social Security benefits extensively as I approach retirement age. Your question about representative payee accounts really resonates with me - it's one of those areas where the SSA website gives you the basics but doesn't explain the real-world practical aspects that everyone here has been so helpful in sharing. I wanted to add one thing I learned from my research: if you're concerned about the administrative burden of being a representative payee, you should know that you can actually designate someone else to be the representative payee for your children's benefits instead of doing it yourself. This could be a trusted family member, for example. The benefits would go directly to them, and they would handle all the reporting requirements. Of course, most parents prefer to maintain control over their children's benefits, but it's worth knowing you have options if the paperwork and account management feel like too much to handle alongside your own retirement transition. The advice everyone has given about separate accounts and simple record-keeping is spot on. It really does seem like the SSA is looking for reasonable accountability, not perfection. Your proactive approach to understanding the requirements before you even file shows you'll handle this responsibility well!