What Bills Can Social Security Disability Benefits Cover?

Submitted by Shane on Mon, 12/20/2010 - 10:15

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.

Additional Resources

Blog comments

tina (not verified)

Only make 700 can't afford my rent food and bills haven't been able to buy clothes for ten year's have long term disability can only buy toilet paper for two weeks out a the month mentally and physically disabled can't make it to my appointments no money for transportation gonna get evicted and gut no heat can't afford shampoo or soap a lot public don't wanna deal with me can't hardly go out any way physical and mental disabilities have a cat might have to give it up but it's therapeutic need the stuff my friend gets she gets a house keeper a nurse rides to groceries and 1100 a month?? She never worked. I wash clothes when my family feels like helping me once or twice a year they pay it I'm a grand mom I'm ashamed to see my grandkids. I'm starving dirty got no power can live fine by myself if I get all those things my friend gets can't barely get out to get help no tv to even watch news no money for power couldn't buy Christmas presents or cards my oldest grandson is 9 lucky I can text my daughter paid this phone for me and I learned don't kno how to email or nothing this was hard enough tell me where to get help please

Sun, 11/13/2016 - 02:18 Permalink

In reply to by tina (not verified)

Hi Tina,
You may want to contact your state's housing authority, they may be able to help you out with utilities.

Mon, 11/14/2016 - 09:44 Permalink
Nancy (not verified)

We were told we cant spend any social security money on anything other then rent, food or utilities but the person receiving the benefits is not the main source of income just a family member. And we were also told we could not withdraw any money from the account or cash before depositing everything has to be with the debit card is all of this true?

Fri, 12/02/2016 - 12:01 Permalink

In reply to by Nancy (not verified)

Hi Nancy,
I haven't heard that before! You will need to save your receipts, but many SSD recipients can spend money on any needs, such as personal products, transportation, etc.

Fri, 12/02/2016 - 16:54 Permalink
Dennis Robison (not verified)

I am the rep payee for my severely disabled brother. All of his needs are met, food/housing/clothes/recreation, but there is still money left over in his bank account. It has become difficult to keep his funds under $2000 because there is nothing more he needs that he does not already get. I attempt to be creative but wonder if I cross over the line sometimes(?). My brother lives in a group home with other severely disabled individuals and I am aware that one of these individuals is in need of some dental care and does not have the funds and likely will never have the funds to get this dental work completed. Can I make the decision to help with this situation and pay for the dental care from my brother's SSDI bank account. The dental care would cost around $1,000 and my brother can well afford. Unfortunately he is unable to make this decision due to his severe mental retardation so it is up to me to find out if this is legal or not. Thanks.

Mon, 01/16/2017 - 10:09 Permalink
Donna (not verified)

If there are any additional funds left can those be used to purchase burial insurance or pay towards burial expenses at at Funeral Home?

Fri, 01/27/2017 - 19:17 Permalink

In reply to by Donna (not verified)

Hi Donna,
It may depend on what type of benefits the deceased received, you may want to contact the SSA and inquire about those benefits and if they would be available for burial expenses.

Mon, 01/30/2017 - 16:40 Permalink
Lowe (not verified)

My question is I am a representative payer for my son and I was trying to see if I was able to pay light bill or water bill with his disability or not it said housing good clothing ect. So can you please help me get a better understanding of this?

Mon, 03/27/2017 - 20:28 Permalink

In reply to by Lowe (not verified)

Hi Lowe,

According to the SSA, "You should use benefits for current needs (such as food, clothing, shelter, utilities, dental and medical care, and personal comfort items), or for reasonably foreseeable needs." And "You must use benefits in the best interests of the beneficiary, according to your best judgment."

Best Wishes,

Tue, 03/28/2017 - 11:27 Permalink
Debbie (not verified)

I am rep payee for my now severely brain damaged son. He received a SSD lump payment and also receives monthly payments. All of his needs are met at this time as he is at a facility currently being paid for by workman's comp. Can I use the lump sum money and/or some of the monthly money towards his student loan debt?
Thank you.

Mon, 04/10/2017 - 17:05 Permalink

In reply to by Debbie (not verified)

Hi Debbie,

You might be able to, but if you are unsure about a payment I would contact the SSA to double check.

Best Wishes,

Tue, 04/11/2017 - 09:32 Permalink
Sherzai (not verified)

In reply to by Eric

Hi I am representative payee my son with disability but I am confused regarding his back pay that approved by Feb 2017 .can I set aside amount of his back pay for myself. that I paid for home rent since Feb 2017? if I can how much per months.

Sat, 08/12/2017 - 14:42 Permalink
Kimberly S. (not verified)

In reply to by Debbie (not verified)

Student loan debt would be discharged if he is permanently disabled. You should not have to pay it.

Fri, 06/02/2017 - 12:41 Permalink
Kelly (not verified)

In reply to by Bryan

This is true however, even if student loans are forgiven due to disability, you still might have to claim the total amount that was forgiven as income on your taxes (1099 c). Be prepared to pay a hefty tax bill just in case!

Wed, 03/28/2018 - 10:22 Permalink
April (not verified)

In reply to by Debbie (not verified)

Check with having those debts written off, some can be due to being disabled now. I can't think what it's called but if you tell the collection department they maybe able to refer you where to apply for the benefit. Check with department of education. It's out there there is a application to do and a Dr. to also sign then you send it back.

Mon, 03/05/2018 - 03:43 Permalink
Sharell (not verified)

If u paying a family car note out your ssi is that a problem and not taken care of yourself would that person get cut off

Fri, 04/14/2017 - 17:12 Permalink
Barbara davis (not verified)

I am a representative for my son,received back ssi payments,when we received them,most of all his medical bills,were paid by me (mom)and dad,can we be reimbursed

Wed, 05/10/2017 - 20:46 Permalink
Charles (not verified)

In reply to by Barbara davis (not verified)

According to the rules no you may not. Back payment funds are different then your monthly payments they must be put in a dedicated account and technically you are supposed to contact SSA before spending any of this money for approval, but the reality of this is there is very little in the way of enforcement of any of this. If you are a little financially creative you can you can justify most things you do with the money, but won't have to because no one is ever likely to ask you. There is a lot of false information on this site. If you are concerned call and ask the case worker if it would be an approved expense.

Fri, 05/19/2017 - 14:38 Permalink

In reply to by Dolores (not verified)

Hi there,
while the SSA does not consider a primary vehicle to be a financial asset, any other vehicles that he owns would be considered a financial asset and would be counted against the financial resources limit for SSI.

Fri, 06/02/2017 - 11:30 Permalink
amyj1293@gmail.com (not verified)

I work for a non-profit that provides 24 hour HCBS services. We have an individual that continually damages or destroys property in the home of his roommates and things supplied by the organization. We have been told that we cannot use his SSI funds to replace these items. Is that correct?

Wed, 06/07/2017 - 12:37 Permalink
Jake (not verified)

I am wondering if income from SSI can be used to pay attorney's fees that are related to obtaining a guardianship. I have not been able to find a clear answer as to whether SSI can be used for these payments.

I thought that it could only be used for needs of the claimant. Should I call SSA to double check?

Tue, 06/13/2017 - 23:20 Permalink

In reply to by Jake (not verified)

Hi Jake,

It's always best to double check with the SSA with any questions you are uncertain of. But generally though, Social Security attorneys are paid on a contingency basis, meaning they only get paid if you win your case and their fee comes out of backpay you are earned.


Wed, 06/14/2017 - 09:40 Permalink
Jorge (not verified)

Ok here is my question, and as with everyone, each situation is different. I became disabled in 2/16. It took a long process but finally was fully approved after appeal hearing and received benefits letter on 7/10. I am I am getting a lump sum payment of over 25k us 7k in SSI back pay but not SSI. I am using a payment representative ( my mother ). The agreement between us was that once I got my lump sum payment I would repay my housing/utilities expenses I accumulated over the past year as they took me in and are in dire financial circumstances themselves and want to give them about $8k. Then I can move out and live independently. How would this happen

Tue, 07/11/2017 - 15:01 Permalink

In reply to by Jorge (not verified)

Hi Jorge,
You may be able to do so by paying them out of your SSDI benefits award. However how you choose to do that is at your discretion.

Wed, 07/12/2017 - 09:40 Permalink
Mia Penz (not verified)

Hi, I became disabled after a tramatic domestic violence relationship.My son is now 10 .I am a single mom ,my income from SSI and SSD is aproxomitly $789.00 a month. I am not getting child support as it would endanger myself and my son...I don't understand how I am supose to pay for a place to live... Long list lines and unsafe public housing shouldn't be the only options I have..We have had to move a lot. I just would like a safe,clean and decent place for me and my son...Freinds Hv been great letting us live w them ... Then iî feel like a burden,depressed longing for my health before this . thank you for any suggestions ,resources I may not no about. Mia

Tue, 07/25/2017 - 17:15 Permalink
Savanna (not verified)

My mother just passed away. She was on SSDI and I was wondering if the insurance would cover any of her funeral expenses.

Wed, 07/26/2017 - 11:11 Permalink

In reply to by Savanna (not verified)

Hi Savanna,
I'm sorry to hear about that! Please accept my condolences.
You may be eligible for survivor's benefits, however the SSA may not provide funds for funerals.

Wed, 07/26/2017 - 11:25 Permalink
AnneMarie Ansel (not verified)

My daughter receives an SSDI check of $1178.00 that puts her into a spend down category for Medicaid for $333 every month. I've been advised to set up a Special Needs Pool Trust and deposit her 'excess' income into every month and then use this money to pay her rent. But from information I've been reading, people receiving SSI cannot use this trust money to pay for rent. Are there different guidelines for SSDI and SSI?

Wed, 08/23/2017 - 11:07 Permalink

In reply to by AnneMarie Ansel (not verified)

Hi AnneMarie,
Yes, the rules are a little different for each program, and SSDI has a bit more leeway regarding how to spend benefits. If your child receives those benefits based on income, she would be on SSI benefits.

Wed, 08/23/2017 - 12:25 Permalink
Wanda (not verified)

As of last year of August my daughter was approved for her back pay which I had to open her up a dedicated account,but my question is will I be able to ask for permission to buy a car,cause our only transportation clock out ,which is her ride to school and doctors appt

Mon, 09/11/2017 - 22:30 Permalink

In reply to by Wanda (not verified)

Hi Wanda,
You may want to contact your local SSA office about buying a car for transporting your daughter, and if your daughter is eligible for Medicaid, you may be able to arrange transportation to the doctor's office with your state's Medicaid office.

Tue, 09/12/2017 - 08:39 Permalink
Babygirl (not verified)

I am my son's representative payee and he with his money the ss office said he can pay a portion of the rent, utilites, and food. Do I write a receipt out each month for proof for social security??

Mon, 10/02/2017 - 13:48 Permalink
Karen (not verified)

I was the payee for my daughters SSDI checks so my name was on her account with her to help her manage HER money to use for college. Now DSS is using this account against me which puts me over the 2K allowable resources to be eligible for medicaid. Legal Aid says I don't have a case but SSA has strict rules that say I cant use the money on myself. Legal aid won't help. What do I do?

Fri, 10/20/2017 - 17:39 Permalink

In reply to by Karen (not verified)

Hi Karen,
I'm sorry to hear about that! It may be regarded as an asset as you had control of it, you may want to look into a trust as that may make that money exempt from Medicaid's resource limit.

Mon, 10/23/2017 - 16:56 Permalink
Shayla (not verified)

I just received my disability & SSI I have no transportation & a small child We both have appointments Can I ask to receive sum of my back pay to purchase a reliable car insurance tickets & licenses to get us around Is there a certain amount or do I have to put a down pay or get a old car

Thu, 11/16/2017 - 11:46 Permalink

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