being rep payee does not mean it is the parent's money though although, as I stated previously most states do allow a parent to take any money a child earns and do with it as they will. I simply think that if the parent actually demands the payment as rent, he could end up with some IRS problems if the OP is inclined to cause trouble. The parent would essentially be changing seizable money into taxable income, if I understand the system correctly.
I also have a problem with a child having to pay income tax on money that a parent seizes. Is it not then de facto income to the parent instead of the child? I don't know the tax system like you do. Maybe you can explain it to me so it makes sense.
Children who are receiving SS benefits virtually never have to pay any tax on the benefits. SS benefits have to be reported on your tax return (assuming that you have to file a tax return at all) but they only start to be taxable to a single person if 1/2 of the SS benefits plus all of the rest of their income is more than about 25k...and become taxable to a maximum of 85% of the benefit if that figure reaches about 34k. So if a child had 10k in SS benefits the child could earn almost 20k before ANY of the benefit would be taxable, and could earn almost 29k before a maximum of 8500.00 of it would be taxable.
Very few minor children have income even remotely high enough that they actually have to pay any tax on the SS benefits.
I also know for certain that the rep payee may use the income to provide for the support of the minor child, in the same manner that the parent would use child support. The rep payee is not required to make any of the money available to the child.
Therefore the dad in this case could keep the entire benefit towards the child's support, and not give any of it to the child. The fact that dad is allowing the child to control the spending of a portion of the benefit is quite generous of dad.
