10 May Can you report a misuse of Social Security funds for children?

Q. My son and his wife divorced and he has since died. My two grandchildren have lived in my home for the last three years. I have them every other week, which was the arrangement ever since the divorce started, and the mother has them in the alternate weeks. The divorce was finalized one year ago with joint custody and no alimony from the father. I advised the mother to contact Social Security for benefits. Social Security says they require the mother to verify benefits every year. Who is verifying she is giving true information? Who has the right to question if the funds are being used properly? In this specific case, the mother has never been able to handle money responsibly, and I am concerned money for the children will be used for her activities and expenses.
— Grandparent

A. We’re sorry to hear about the loss of your son.

Each year, in excess of $2 billion is distributed among more than 4 million children, according to Social Security.

Payments are often made payable to a “representative payee,” like your former daughter-in-law, said Matheu Nunn, co-chair of the family/matrimonial practice at Einhorn Barabito in Denville.

However, due to a change in the law, Social Security no longer requires certain representative payees to file an annual report, he said.

“Among those exempt payees is a biological parent — your daughter-in-law, for example — of a child, if that parent resides in the same household as the child-beneficiary,” Nunn said. “Having said that, although SSA does not require an annual report for certain categories of representative payees, the payees must still keep financial records of any spending/saving on behalf of the child because SSA has the right to request those records even though the annual report may not be required.”

Technically speaking, anyone can “question” the representative payee’s conduct or use of monies, Nunn said.

“The issue becomes whether the `question,’ or more aptly stated, `reporting’ of the representative payee has any impact,” Nunn said.

“Of course, the person with the greatest right is the beneficiary — in this instance, the children,” he said. “The broader question is whether a third-party can report the representative payee’s conduct.”

The answer is yes. This can be done on the Social Security Office of Inspector General website. 

Nunn said the website has several data fields, including a narrative section, in which a person can report suspected fraud or misconduct by a representative payee. He said the website provides a 4,000 character limit to report fraud or abuse and requires biological information about the reporter, the representative payee and, the “victim,” who in this instance would be your grandchildren.

“Like almost any issue involving fraud or misconduct, the investigation turns on evidence and the credibility of the evidence,” he said. “For, example, if the children do not have adequate clothing or appear malnourished, that information is of the type that the SSA would want to know. On the other end of the spectrum, pure supposition-based conclusions will be unlikely to result in any action.”

Email your questions to .

This story was originally published on May 10, 2022.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.