Social Security Disability benefits offer an extremely valuable benefit for those with disabilities who can no longer work.

Once most people have their check in hand, they often wonder how they can use their money or benefits most effectively. In most circumstances, the way you spend your payments is up to you, however it is important to prioritize how you use your benefits.

Back Payments

It often takes an extended period of time to be approved by the Social Security Administration (SSA) for disability benefits. For this reason, many individuals who are approved are entitled to SSD back payments.

These back payments are paid in a lump sum and may be a significant portion of your income for some time. As such, it is important to spend this money wisely and avoid the temptation to go on a shopping spree.

When you receive your back payment, you should attempt to pay off any outstanding bills you acquired during the disability application process. Money left over should be put in an interest-bearing savings account for future use.

Spending Your Social Security Disability Benefits

In most situations, the way you spend your disability payments is up to you. However, it is important to use your disability payments toward your regular monthly bills to meet your current needs and save any extra for future needs.

Most will use their benefits for day-to-day needs, such as:

  • Food
  • House payments or rent
  • Medical and dental care
  • Utilities
  • Clothing

Social Security benefits are designed to be used for necessary living expenses, but there is technically no requirement that you use them in a specific way.

If you have paid for all your needs, you are free to use your benefits for recreational purposes, however, it is in your best interest to save that money in an interest-bearing bank account so you have funds for your future.

However, if you receive Supplemental Security Income (SSI), you must make sure your purchases do not make you ineligible for this needs-based benefit. If you purchase luxury items and increase your assets, you could lose your eligibility for SSI benefits.

Representative Payee

If an individual is unable to manage his or her payments on his or her own, the Social Security Administration may appoint a representative payee to manage the funds.

Managing your money when you have a disability can sometimes be difficult, and these payees provide a valuable service for those who are unable to manage their finances. Payees are often family and friends, but they may be volunteers as well.

It is the responsibility of the payee to ensure that the funds are spent in a way that is in the best interest of the disability recipient. This means, all current needs must be paid for, and any remaining funds should be put away in a savings account.

Representative payees are required to keep detailed records of the funds received and how they were spent, which must be provided to the SSA.

If you feel that your disability payments are incorrect, it is important that you contact the SSA as soon as possible to report any discrepancies. Our Social Security Disability lawyers can help you report any errors and potentially file an appeal if you feel you deserve more than you were awarded.

Call 1-800-503-2000 for a free consultation to learn more.