What Can a Representative Payee Buy for Someone on SSDI?

Being the representative payee for a friend or family member who's receiving Social Security disability benefits is a big responsibility. You'll want to provide the best financial help you can for your disabled friend or family member and use the Social Security disability insurance (SSDI) or Supplemental Security Income (SSI) benefits you receive appropriately.

Social Security doesn't give you a list of items a representative payee can or can't buy with someone else's disability benefits. But you're expected to spend the money in the best interests of that person.

This article will discuss how you must handle the Social Security beneficiary's funds, including details about what a representative payee can spend that money on and what the money can't be used for.

What Can a Social Security Representative Payee Spend Money On?

As a representative payee, your first duty is to pay for the disability beneficiary's living expenses, including:

• food
• housing costs, such as
  
  • rent or mortgage payments
  • utilities
  • home upkeep and repair costs
  • homeowner's or renter's insurance premiums, and
  • real estate taxes (if any).
• medical expenses not covered by insurance, including the cost of:
  
  • medications
  • doctor and hospital visits
  • mobility devices, and
  • service animals (like a guide dog).
• dental expenses
• rehab or therapy expenses, and
• clothing and personal care items.

Once these needs are met, a representative payee can spend the remaining disability money on other things that benefit the disabled person. For instance, you could use some of the money to pay the beneficiary's past-due bills or education expenses.

You can also use some benefit money to pay for personal comfort items and recreation costs, like:

• audiobook or magazine subscriptions
• cable TV subscription
• video games, and
• outings (like movie tickets or a museum visit).

As far as discretionary spending goes, Social Security evaluates what's reasonable spending based on each disability recipient's circumstances.

Are There Any SSI or SSDI Spending Restrictions?

How Social Security disability benefits should (or shouldn't) be spent will be different for different people, depending on the following:

• how the person lives
• what the person's basic needs are, and
• how much Social Security disability the person gets (along with any other income).

This is why Social Security doesn't publish a list of personal comfort or entertainment expenses that aren't allowed. What's reasonable spending for some would be unreasonable for others.

For instance, if you're the payee for a person receiving $700 in SSI benefits per month, you might have trouble just paying for the beneficiary's basic needs. So, spending $300 on a 4K HDTV probably isn't reasonable.

But what if the beneficiary receives $2,000 per month in SSDI benefits? Making the same purchase, in that case, might be reasonable—especially if the person enjoys watching television and isn't able to get out much.

As a representative payee, you have a fair amount of discretion about how best to spend your friend or family member's disability benefits. But there are a few things you can't use that money on, including:

• paying for your own expenses, or
• paying yourself a fee for payee services.

(Generally, only nonprofit organizational payees with written approval from Social Security can charge a fee.)

Should a Representative Payee Give Cash to the Social Security Recipient?

When Social Security assigns a representative payee for someone receiving SSDI or SSI benefits, it's because there's reason to believe that person can't manage their money on their own. Social Security might assign a payee if the beneficiary is one of the following:

• an adult with a cognitive impairment
• an adult suffering from dementia
• an adult who's addicted to drugs or alcohol
• anyone whose condition makes them easy to take advantage of, and
• all minor children.

(Learn more about why Social Security appoints representative payees.)

Once their living expenses are paid, even people who need representative payees have the right to spend some of their own benefit money. But the question of giving the person cash has to be determined on a case-by-case basis. You'll need to use your best judgment.

For example, let's say you're the payee for someone with drug or alcohol abuse issues. You'd probably only give such a beneficiary small amounts of cash and closely monitor how it's spent.

What Else Should a Representative Payee Know About Spending Disability Benefits?

When you accept the role of Social Security representative payee, you agree to always spend the disability benefits in the best interests of the friend or family member you're helping. You also agree to be held accountable for that spending.

Most representative payees will have to file an annual report with Social Security that explains how the money was spent. You'll need to keep accurate records of the following:

• how much money was received
• how, when, and where it was spent, and
• how much was saved.

If there's money left over after meeting the beneficiary's current needs—including discretionary spending—you must save it in a separate bank account (like an ABLE account) for the beneficiary's future needs. That's especially important if the person you're helping receives a large back payment of past-due benefits.

Learn more about your responsibilities as a Social Security representative payee.

_{Updated March 31, 2023}