M E M O R A N D U M

IM-88  07/23/98  Dedicated Accounts For SSI Recipients under Age 18


SUBJECT:
Dedicated Accounts For SSI Recipients under Age 18
 
DISCUSSION:
The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) established a new requirement for handling some payments of past due amounts to SSI recipients under age 18 who have representative payees.

Section 213 of PRWORA requires that if a past due payment is a payment of monthly benefits greater than six times the current SSI maximum for one person, then the representative payee must deposit the payment into a dedicated account.  The requirement applies to all such payments made after August 22, 1996.  The Social Security Administration (SSA) will not pay past due monthly benefits until a dedicated account has been established.  SSA will direct deposit these payments into the dedicated account.

A dedicated account may be a saving's account, a checking account, or a money market account established in a financial institution.  It may not be a certificate of deposit, a mutual fund, stocks, or bonds.  The title of the account must show that the child owns the funds (including interest), but only the payee can access the funds on the child's behalf.  The account must have the sole purpose of receiving and maintaining SSI past due benefits.  Other payments (regular SSI payments, OASDI payments, and other 
income) may not be deposited into the dedicated account.  Interest earned by the account may be deposited into the account.

Once a dedicated account is established, other past due amounts that exceed six times the SSI maximum for one person must be deposited into it.  Past due amounts which are at least equal to the SSI maximum for one person and are less than or equal to six times the SSI maximum for one person may be deposited into the account, but is not a requirement.

The dedicated account is to be used only for the benefit of the child and only for certain expenses:

  • medical treatment and education or job skills training;

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  • if related to the child's impairment(s), personal needs assistance, special equipment, housing modification, and therapy or rehabilitation;

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  • other items and services related to the child's impairment(s) which are determined appropriate by the SSA. 
If a child is under age 18, an SSI recipient with a representative payee and has an account, determine if it is a dedicated account.  Examine the type of account, the title of the account, the types of funds deposited into the account and the activity within the account.  If it conforms to the information in this memorandum, consider it an SSI dedicated account.

EFFECT ON ELIGIBILITY 

Resources -- Any funds in an SSI dedicated account are exempt as available resources for Food Stamps, Temporary Assistance, and all Medicaid programs.  The exclusion of a  dedicated account continues until the account is depleted or eligibility for SSI terminates, whichever comes first.  If SSI eligibility ends, any balance remaining in the dedicated account must be considered an available resource to the former SSI recipient.

The exclusion continues to apply in any of the following situations:

  • a child attains age 18, continues to be eligible for SSI and receives payments directly; 

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  • a new representative payee is appointed; or

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  • during a period of SSI suspension or a period of SSI eligibility for which no payment is due.
Income--Do not consider any funds deposited into the account, disbursed from the account, or interest earned by the account as income for Temporary Assistance or Medicaid.

For Food Stamps exempt any funds deposited in the account from countable income. Exclude as income any disbursements of these funds from the account.  The payments are considered non-
recurring lump sum payments.  Count as income interest earned from the account.
 
NECESSARY ACTION:
  • Review this memorandum with all appropriate staff.

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  • Do not count amounts in a dedicated account as available resources.

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  • Do not count funds deposited in a dedicated account as income.

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  • Do not count interest earned on dedicated accounts as income for Temporary Assistance or Medicaid programs.

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  • Do count interest earned on dedicated accounts as income for Food Stamps.
ET/AM
Distribution #6

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