saved SSA benefits

What is the name of your state? NY

In order to protect what money I had from the financial and legal problems my late husband left, I saved some of my children's ssa benefits in custodial accounts. After these issues were resolved, I continued to deposit their money in their accounts, drawing what was needed for their expenses as SSA is for their support. I have now heard many people in similar situations say their kids' money goes directly into their personal checking account and is totally spent. None of it gets saved in the child's name. Have I made a tremendous mistake?

Now that my son has turned 18, I thought I would have to relinquish control of his money to him, but SSA wants it back. I am assuming they will redistribute it to him, but what if I have given him some already, and he will need more very soon for car, college (NO financial aid because of this money), etc.? Does the SSA ever go along with me just giving the money to him? Will they expect some detailed accounting of this? I thought I was doing something good for my kids and it seems it's a big headache now.

SS is asking for any monies left over? SS can be used as child support can to help pay monthly bills. The difference is that SS can come and have you show how you spent the money. My sd's money is being saved in an account to be saved for college or life expenses. However I also wonder if this is SSI or SSD and if it makes a difference.

I believe SSI is different in that you really can't save any of it. I think I read the child can't have more than $2,000 in assets or something to that effect.

SSA does ask yearly how much you spend and how much you saved & how it is saved, and thus far, nothing much more. It seems, though, that everyone tends to spend it rather than saving it. I haven't heard that parents are often questioned about how it is spent.

Well, I'm curious for the answer then because my sd gets SSD benefits through my husband as do my children now too but most of sd's has been saved. There's no sense in having it in an account and saving it if they are just going to want it back. There are plenty of things we could buy for her instead.

I do believe they intend to take the money from me and give it to him. I don't understand why that is necessary in the case of a parent when custodial accounts are already the property of the child. I'm not even sure how I would take the money out. I'm not sure how to approach the whole thing which is why I'm asking here first.

Depending on your situation, whether your children would apply for financial aid, etc. (My son gets no federal aid because of this money), you might at least check into what else you can or should do with the money.

marvelanne said:

I do believe they intend to take the money from me and give it to him. I don't understand why that is necessary in the case of a parent when custodial accounts are already the property of the child. I'm not even sure how I would take the money out. I'm not sure how to approach the whole thing which is why I'm asking here first.

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What exactly have they said to you about the return of the money and the reasons?

The letter says, "while you were X's payee, you may have saved some money for him. If you have, you should return it to us unless you have already made other plans with us for handling it."

It almost sounds as if they would be agreeable to allowing me to transfer funds, but it sounds mysterious and vague to me. I wanted to do some research before I contact them (not because I feel I've done anything wrong, but because I have 'fear of authorities' left over from my husband's problems) and that's what I'm doing now. But it seems there is not a lot of info about it out there. And not too many people know about this.

In a search of this site I came across a reply to an old post "can an independent 16 year old file for SS"

"Also, in a case just decided in the area I live, the SSA sued a young person (now 19 and in college) and her guardian for repayment of monies paid. The persons parents were killed when the she was 9 and her aunt collected the SS benefits for the child till she turned 18. About a year ago a story in a local newspaper made liight of this and how wonderful the aunt was because she saved every penny received from SS over the years for the childs education. It was one of those heart warming do good stories, poor family saves up so disadvantaged child can attend major U.S. university. The SSA sued claiming that the survivor benefits were for day to day expensed in raising the child, not to be put away for later. The SSA won in court and took back over $30,000 from the recipient. If you want to save the money for later, don't tell anyone."

This is scary!

That is scary. Dh is calling SS and finding out if that only qualifies for SSI or SSD also which is what his daughter gets. I see a new bedroom suite and other things she could benefit from that money could of been used for but we were saving it.

I just went to the SS admin website and asked this question through e-mail. I will post when I get an answer.

Thanks for your help. I really appreciate it. I came across this website from the SSA:

http://www.ssa.gov/pubs/10076.html#how

It sure appears to me that ss benefits can be saved and belong to the beneficiary. I don't know what these other people are talking about or why SSA would sue for the return of saved money. Now I still wonder if they would let me transfer the money to my son rather than return it to them. I don't see why they would object unless I'm missing something. But it does look like I should have deposited it in my account first instead of custodial accounts.

Thought I would update everyone. A good friend called SSA (I was too scared) and found out that survivors' benefits can be saved and are kept by the beneficiary. When a child becomes 18, any saved benefits can either be turned over to him directly or they would be sent back to SSA and they would send it to him. All I have to do is send them a letter stating I have transferred the funds to my child and provide them with an account number they can verify.

It appears many people confuse other SS benefits with SSI benefits, which are need-based (welfare). SSI recipients cannot accumulate more than $2,000 and if any assets are discovered, benefits would have to be paid back.

So aside from the financial aid detriment and the issue of an 18-year-old having access to a large sum of money, saving survivors' benefits are OK and will not be taken back. Now I can relax!

That's what I was thinking, the difference between SSI and SSD or survivor benefits. The only other case I had heard about was when my ex FIL died his wife got benefits for all the kids. At one point one of the boys weren't living with her and was living in a home yet the mom kept the benefits. Years later when the boy was an adult he was informed that HE was supposed to pay back the benefits from those months. I guess I can relax too although DH and I talked and sd would be decked to the nines if SS wanted that money back. I do have to wonder though what the deal was with the case you showed earlier where the girl went to college and SS sued and won.

That had to be SSI. It's the only explanation unless some kind of fraud was involved. But of course it's just a story on a website. I have no way of knowing how factual it was.

It appears that with SSI, the interests of the government are a priority while survivors' benefits rules seem to try to protect the beneficiary even if it means coming down on parents. While we may not like it, I guess most of us can understand that unfortunately, there are some parents who would use up their own child's money for themselves and not properly take care of the child.

In any case I would recommend that if people might seek financial aid, they use the SS benefits of the child for the child's expenses and save money in their own name. The child's assets are counted much more heavily than parents. You also don't have to turn over the money to the child when they're 18--what if the child is not as responsible as you would hope.