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What Can I Use My Social Security Disability Benefits to Pay For?

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If you are disabled and unable to support yourself or your family financially, you may be entitled to Social Security disability benefits. While being unable to work may be stressful and scary, these payments provide you peace of mind and the income needed to take care of yourself and your family.

If you have recently been approved for Social Security benefits, you may be wondering what you can spend your money on and whether there are any spending restrictions. Below, we discuss how you may spend your Social Security disability benefits, including if you are awarded Back Pay, and situations where a Representative Payee may be appointed.

Types of Expenses and How to Spend Benefits

Even though you really have no restrictions when it comes to how you spend your benefits, it’s important that you do so wisely. Before you spend your benefits on anything like luxury items, entertainment, and getaways, you should always be sure that you take care of your bills and necessary monthly expenses before using the money for anything else. This may include:

  • Mortgage or rent
  • Utility, water, or electricity bills
  • Food
  • Everyday living expenses

Additionally, remember that to receive SSDI, you cannot have over $2,000 in assets as a single individual or $3,000 in assets if you are married. If you purchase luxury items with your additional income, it may increase your amount of assets and you could lose your SSDI eligibility. You may also not spend your benefits on anything illegal, such as illegal drugs.

If You Are Awarded Back Pay

Many Social Security disability claims are initially denied or the application process could take an extended period of time to finally result in the claim being approved. For the months or years potentially spent waiting for benefits to begin, many SSDI recipients are entitled to something known as Back Pay. This refers to the benefits you should have received from the beginning of your claim should it have been approved immediately.

Benefits for SSDI begin to accrue from the date that you file your application, and Back Pay will typically be paid in a lump sum once the claim is finally approved. The exact amount you may receive in Back Pay will depend on when the Social Security Administration (SSA) received the application and decides your disability began, also known as the “established onset date.”

You may find this lump sum deposited into your bank account without notice after you are already beginning to receive your monthly benefits, but sometimes Back Pay is given first. In any case, the same concept applies as we mentioned above: you should ensure all your necessary bills living expenses, and necessary home improvements for your disability are paid before purchasing any luxury items.

When a Representative Payee May Be Appointed

There may be instances where the SSA determines that a Social Security disability recipient is unable to handle their own benefits, in which case the agency may appoint a Representative Payee to handle the benefits on behalf of this person. Some situations where a Representative Payee may be appointed include if the recipient:

  • Is a child
  • Is mentally ill
  • Has dementia
  • Is addicted to drugs or alcohol

A Representative Payee does not have nearly as much freedom to spend benefits as would the recipient. For instance, this person is legally required to first spend the benefits on approved expenses for the recipient, which include food, housing, clothing, and other bills.

Leftover money should be given to the recipient for either entertainment purposes or put into their savings account to use in the future. Each year, the Representative Payee will have to report to the SSA on how each dollar was spent to ensure that it was used for its intended purpose.

Helping Your Obtain Fair Social Security Benefits

At Rubin & Badame, Attorneys at Law, P.C., we understand that obtaining the Social Security benefits you deserve can be a complicated, confusing, and stressful process, but you don’t have to go through it alone. Our qualified legal team is here to take this burden off of your shoulders so that you can focus on your health. Get 35+ years of experience in your corner and help you can rely on.

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