January 24, 2020

What Can You do if a Custodial Parent Misuses Auxiliary Benefit Funds?

report misuse of rep payee fundsI regularly see comments on this blog and receive emails to my Social Security disability law firm from non-custodial parents who are fuming that the mother of their children appears to be misusing either child support payments or auxiliary payments coming from Social Security based on a disability claim by the NCP.

As far as supposed misuse of child support payment is concerned, that is a matter for your state court or state child support enforcement office – Social Security will not get involved in that.

Social Security will get involved if a representative payee (often a custodial parent) misuses auxiliary benefit funds.   When benefits are due to a minor child, Social Security will designate a representative payee to receive and disburse those funds for the benefit of the child (called the “beneficiary”).

Social Security has set out a number of rules that govern the conduct and decisions of representative payees.  Here is what SSA says about the obligations of a rep payee:

First, you must make sure the beneficiary’s day-to-day needs for food and shelter are met. Then, the money can be used for any of the beneficiary’s medical and dental care that is not covered by health insurance, and for personal needs, such as clothing and recreation. If there is money left after you pay for the beneficiary’s needs, it must be saved, preferably in an interest-bearing account or U.S. Savings Bonds.

Representative payees also have reporting obligations – they  must submit an annual worksheet detailing how the auxiliary benefits were used.   SSA’s guidelines also contain examples of what constitutes an appropriate larger expenditure such as furniture or a car.

Social Security reports that it disburses $20 billion annually to 4 million beneficiaries through the representative payee program.  Misuse is and has been a problem and since 2004, SSA has stepped up enforcement actions against payees.

Anyone can report misuse of funds by a representative payee – you can call 800-772-1213.    You cannot, however, use the “misuse of funds” reporting to harass or seek revenge on a former spouse or partner.  Reporting abuse is similar to reporting a crime – you need to be certain that the abuse is going on and by filing a report you risk adverse consequences if SSA determines that your report was not legitimate.

Thanks to my colleague Tomasz Stasiuk whose blog post Parent Misusing Social Security Benefits inspired this post.

Custodial Parent Uses Auxiliary Benefits and Child Support on Beer and Dancing – What Can I Do?

parent wasting child supportI have received several emails from unhappy non-custodial parents who are paying child support and/or whose children receive auxiliary benefits thanks to the non-custodial parent.   As one such reader wrote:

How can the non-custodial parent control the use of the benefit for the welfare of the child if the custodial parent is a chronic nonworking individual who lives off welfare and the child support I provide already?

Here are my thoughts: there are really two issues here.  The first issue has to do with child support, which is a state court issue.  Generally, when a state court judge awards primary custody and child support, he does so with the belief and expectation that the custodial parent is best equipped to take care of the child or children.  Even when custody is evenly divided, a judge may award child support if he believes that the non-custodial parent needs the financial resources to best care for the child. [Read more…]

What is Disabled Child’s Recourse if Parent/Representative Payee Misuses Disability Funds

argumentMost of the comments and questions I get on this blog come from parents who are trying to get child support or who have child support obligations but no source of income to pay.  This email comes from a teenager who was approved for disability and who contends that her parents are misusing funds that are supposed to be used for her care and welfare:

hi i am 17 i have been on disability since i was twelve i have a few questions. 1 my parents give me no money from it, nor do they allow me to do extra curricular activites with the money, archery, tae kon do art sculpting etc, is this legal of them? 2 they frequently use the money for the truck payement on a truck that is not neccasary nor running, they dont keep track of the money nor do they keep recepts. is that legal? 3 they wont let me work because it cancels the disability yet they give me no money from it, am i entitled to some money also can i turn them in or set up a confrence or court date to stop the ssi income since i am capable of working desire work and get no benefit from the check??? please i ask for your time soon cause i have to pay for damages and court costtts and cannot accuire work nor income fromm ssi to do so and i will be in comptemt thank you very much

Here are my thoughts: Generally when a benefits are awarded to a minor child, those payments are sent to the that child’s parents or legal guardians who serve as the “representative payee” for that minor child.  The funds should be used for the health, education and welfare of the child.

Social Security rules provide that the representative payee may only use the child’s SSI benefits for the following purposes:

  • medical treatment
  • education or job skills training

The following expenses may also be paid from the child’s SSI account if they benefit the child and are related to the child’s impairment:

  • personal needs or assistance (i.e. in-home nursing care)
  • special equipment
  • housing modification
  • therapy or rehabilitation
  • other items that are approved in advance by the local Social Security office

[Read more…]