What Is a Dedicated Account for SSI?

Supplemental Security Income (SSI) is a federal program providing financial assistance to individuals with limited income and resources, including those aged 65 or older, blind, or disabled. SSI eligibility depends on financial criteria, with countable resource limits typically $2,000 for an individual and $3,000 for a couple. When an SSI recipient receives a significant lump sum payment, such as a large retroactive SSI payment, an inheritance, or a legal settlement, these funds can push resources above allowable limits. Exceeding these limits can reduce or eliminate SSI benefits. To address this, the Social Security Administration (SSA) established a “dedicated account.” This account holds specific funds so they do not count against an individual’s SSI resource limit, preserving their eligibility for ongoing benefits.

What Qualifies for a Dedicated Account

A dedicated account holds particular types of funds that would otherwise jeopardize SSI eligibility by exceeding resource limits. The most common scenario involves large past-due Supplemental Security Income payments, known as retroactive benefits, for a child with a disability. These payments cover the period from when the SSI application was filed until monthly benefits begin, and can be substantial, especially after a lengthy appeal process. A dedicated account is typically required when these past-due SSI benefits exceed six times the federal benefit rate. For instance, in 2025, with a federal benefit rate of $967 per month, this threshold is $5,802.

While large past-due SSI benefits for children are the primary funds that must be placed into a dedicated account, other specific lump sum payments received by a minor child or an incompetent adult who has a representative payee may also be placed into such an account. These can include proceeds from court settlements, inheritances, or other non-SSI lump sums, particularly if related to the individual’s impairment. With limited exceptions for certain past-due SSI benefits, other funds cannot be commingled with dedicated account funds.

Allowable Expenditures from a Dedicated Account

Funds held within a dedicated account are subject to rules ensuring they are spent for the “sole benefit” of the SSI recipient and relate to their impairment. The Social Security Administration specifies acceptable expenses. These commonly include medical treatment, such as doctor visits, prescriptions, or specialized therapies. Education and job skills training are also permissible expenditures.

Approved uses also encompass personal needs assistance, like caregiver costs, and housing modifications for accessibility, such as installing ramps or making bathrooms more accommodating. Special equipment related to the impairment, and therapy or rehabilitation services, are permitted. While a home or vehicle purchase may be allowed if for the beneficiary’s primary use and SSA-approved, funds from a dedicated account generally cannot be used for basic living expenses that regular SSI benefits are intended to cover, such as food, clothing, or shelter.

Establishing and Managing a Dedicated Account

Establishing a dedicated account is a key step for the SSI recipient’s representative payee, who is typically responsible for managing the beneficiary’s funds. The account must be opened at a financial institution, such as a bank, credit union, or savings and loan association, and can be a checking, savings, or money market account. The account’s title must clearly indicate that the funds belong to the SSI beneficiary, even though the representative payee maintains control over transactions.

Ongoing management of a dedicated account requires thorough record-keeping. The representative payee must maintain detailed records of all deposits into the account and all expenditures from it, including receipts and bank statements. The SSA monitors these accounts to ensure proper use of funds, and representative payees are required to provide an annual accounting to the SSA. The funds within a properly managed dedicated account are excluded from countable resources, ensuring that the beneficiary’s eligibility for SSI benefits remains intact.