Most people think of Social Security as a program for retirees, but children are eligible for benefits in certain circumstances. When minor children are entitled to benefits, the Social Security Administration names a person called the representative payee to receive and manage the benefits on their behalf. The role of representative payee comes with responsibilities that the person must follow, including accounting for the use of the money on an annual basis.
When children can get Social Security benefits
Children are entitled to Social Security benefits in several cases. First, when a retiree takes retirement benefits, any child of that retiree who is under age 18, in high school and no older than 19, or disabled can receive children's benefits. In addition, if a parent dies, then the same children are entitled to receive survivor benefits.
Those benefits are typically 50% of the retiree's benefit if the retiree is still living or 75% of the parent's benefit for surviving children after the parent's death. However, benefits can be reduced if they would exceed a total maximum family benefit, which takes into account all benefits paid to a worker, the worker's spouse, and the worker's children.
In addition, Supplemental Security Income is available to children in low-income families who are under 18 or in school and under 22. Benefits depend on the income and financial resources of the parents.
How payments to children work
Social Security will name a representative payee to handle money when the recipient can't do so without help. Typically, children will have a parent named as representative payee unless it's in the best interest of the child to have someone else fill the role.
Representative payees must take care of needs for food and shelter, healthcare, and personal needs. Any remaining money can be saved on behalf of the child for future needs. When a large back-payment of benefits comes in all at once, spending to improve daily living conditions is permitted, such as purchasing furniture for the child.
Annually, representative payees must complete a Representative Payee Report on Form SSA-6230. The form requires you to report the total benefits paid, amounts spent on the children's behalf, and any savings that you were able to set aside for the child. In addition, if you kept a savings account or other financial account to hold saved benefits, you must give information about the account.
The representative payee's job is an important one, and the reporting requirements aren't onerous. They're just intended to make sure that the best interests of the child are protected.
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