Disabled children under the age of 18 may be eligible for both regular Social Security benefit payments and back pay. The rules about back pay, who oversees it, and how it may be used are very strict. The Social Security Administration (SSA) takes the health and well-being of children very seriously, and these rules are meant to protect children from adults who might take advantage of their financial benefits. Read on to learn more about back pay and your child's Social Security benefits.
What Is Back Pay?
It can be several months from the time your child becomes eligible for benefits to when they are paid. This results in a gap of several months of missed benefits. Once your child is approved, the SSA pays the missing benefits in one large lump sum payment known as back pay.
How Can Back Pay Be Used?
The SSA expects parents and others in charge of the child's financial issues (known as representative payees) to keep careful records about the use of the back pay. Only certain things can be bought with back pay, and they must all be for the benefit of the child only, such as:
- Medical expenses
- Job training
- Rehabilitation or therapy
- Personal caregivers
- Special needs equipment like home modifications, computers, and other assistive technology and devices.
- Basic living needs (food, shelter, etc) but only in certain emergency situations (you must get approval from the SSA before using the back pay for this need).
SSA Dedicated Accounts
Not only does the SSA require you to use the back pay for certain items only, but you must also provide a special dedicated bank account to keep the funds. The money goes automatically into the account once the back pay is approved. If the amount of back pay is less than a certain amount, the money can be deposited into the same account used to hold the child's regular benefit payments. The SSA will inform you when you must open a separate account. The dedicated account should not be used for anything else but the back pay and can be closed once the back pay is spent in an authorized manner.
Record-keeping for the Back Pay
The SSA requires parents (or the representative payee) to keep up with all uses of the dedicated account. In addition to noting when back pay is used and what it is used for, keep all receipts as proof of the use. If you are challenged by the SSA, it's helpful to be able to view the record, and the more information you note about the use, the easier it will be to remember it.
When you are unable to obtain benefits for your child when you apply, you are entitled to an appeal. Speak to a social security disability law firm to learn more about helping you get the benefits your child needs and deserves.