Individuals who suffer from severe disabilities often face serious financial hardship. While going through the Social Security Disability application process, the bills can begin to pile up, and once the approval of benefits is in hand, these individuals finally see a light at the end of the tunnel. At that point, the question that most Social Security Disability beneficiaries find themselves asking is exactly what bills they can pay with their benefits and how they are allowed to spend their money. If you have been approved for Social Security Disability benefits and you are wondering what you can use your benefit payments for, the following information can help you understand how your Social Security Disability benefits should be spent.
The Thrill of a Social Security Disability Back Payment
Many of the individuals who are approved for Social Security Disability benefits are entitled to back payments. These Social Security back payments are paid in a lump sum and can sometimes amount to $20,000 or more. It is important to remember that a back payment is not a license to go on an extravagant shopping spree. You should be frugal with this payment and spend it wisely.
When you receive your Social Security Disability back payment, focus on paying off bills that were incurred during the Social Security Disability application process. If there is money left over after outstanding debts have been paid, put some money in an interest-bearing savings account to provide for future unexpected expenses.
Spending Your Social Security Disability Benefits
Once your monthly Social Security Disability payments begin, you will be in charge of handling your own Social Security Disability benefits if you do not have a Social Security Representative Payee. Technically, there are no restrictions as to what you can do with your Social Security Disability payments. It is, however, your responsibility to make sure that your living expenses are paid for before you spend any of your Social Security Disability benefits on entertainment or luxury purchases.
If your Social Security Disability payments are the only household income you have to live on, the bulk of your payments should be put towards your housing, utilities, food and other living expenses. If you have a spouse who earns a substantial income or you live with a family member and you do not have to pay for your living expenses, then your Social Security Disability benefits can be spent any way you see fit.
The Responsibilities of a Social Security Disability Representative Payee
If, for some reason, the Social Security Administration has decided that you are unable to handle your own Social Security Disability benefits, they will assign you a Social Security Disability Representative Payee to handle your benefits for you. This representative payee must handle your Social Security Disability benefits in a way that is much different than you would handle benefits for yourself.
If your Representative Payee is handling your disability benefits on your behalf, he or she must use those benefits to cover the costs of your basic living expenses before doing anything else with the money you receive from Social Security. Approved expenses include housing, food, clothing and other necessary bills. If there is any money left over after these bills have been paid, the Representative Payee may provide you with money for entertainment purposes. Any remaining funds from your Social Security Disability payments must be put into a savings account for your future use.
Each year your Social Security Disability Representative Payee will be responsible for providing the Social Security Administration with a detailed report explaining how your benefits were spent. Each dollar will need to be accounted for and the Social Security Administration will ensure that your funds are being spent properly.
If a Social Security Disability Representative Payee does not use your disability payments for their intended purpose, you should report this fact to the Social Security Administration. The Social Security Administration will review any potential misuse of your Social Security Disability payments and, if necessary, will reclaim any misused funds for you.
Spending Social Security Disability Benefits Wisely
In most cases, Social Security Disability payments are not substantial enough to afford for an affluent lifestyle. Because of this, you should always spend your benefits wisely. Be frugal and do not make lavish purchases that you cannot afford. There is no guarantee that your Social Security Disability benefits will last forever. Because of this, you should try to save money whenever possible. If you have money left over at the end of the month after your living expenses have been paid, consider putting a portion of your Social Security Disability payments into an interest-bearing savings account. By putting away money now you can protect yourself from unforeseen financial emergencies in the future.
