The regulations covering dedicated accounts is 20 CFR ss 416.0640 and is available at the following link on the SSA website.
http://www.socialsecurity.gov/OP_Home/cfr20/416/416-0640.htm
This includes an exact description of the ways funds from a dedicated account can be used.
According to 20 CFR ss 416-0640.e.5 the limitations on use of the funds terminates when the child's eligibility for benefits terminates unless the conditions described in 416-0640 e.5.i,ii, or iii apply.
The exception most likely to apply would be that the child turns 18 - in which case the rules still apply.
Regarding the use of the dedicated account funds (should you find that you must continue to follow the SSA rules):
Note that you can always apply to SSA for approval of a specific expense if you are uncertain about it or if it doesn't clearly fit these guidelines but is something that would benefit the child and is not for the purpose of month to month expenses.
And it appears that this rule would not apply to using the money for special needs assistance, therapy, monthly expenses related to buying or maintaining medical equipment or to provide educational and/or job training. So you could use the money for a tutor or private music lessons for example. Purchasing a musical instrument is likely to be allowed but you may want to get prior approval for this.
The knowing misapplication of dedicated account funds will make the payee obligated to repay the amount. But if the payee used the fund inappropriately but SSA determines they did not do it deliberately then you are off the hook for repayment.
We have a court-supervised special needs trust for our disabled difficult child 1. We are not his payee but the kind of special needs trust we have is covered by pretty much the same rules as apply to a dedicated account. Our attorney has told us that as long as we can show that 1)we spent the money in a way that benefited our son 2) that was related to or required due to his disability 3)we did not blatantly use the money for his monthly expenses - things his SSI check is specifically required to cover like food, clothing, housing - then we are OK.
We have spent money on a rental car to take him to visit relatives because we can't take his wheelchair in our personal vehicle. We have spent money to take him and his friends and other family members out to eat or to the movies - justifying this as entertainment that he would not be able to afford on his SSI. We have spent money for personal care items and services that are not specifically prohibited by SSI and are not covered by Medicare like hair cuts, dental care, bath chairs, back up manual wheelchair, replacement medication that was stolen, cleaning supplies for his apartment, toiletry articles like toe nail clippers and shampoo, kitchen ware to stock his new apartments kitchen - all with the blessing of our attorney. She says that the main thing the court is going to want us to prove is that it was for our son's benefit - not OURS.
We are also ultimately accountable to SSA and Medicare but since it is a court supervised trust our expenditures are actually scrutinized at a level you are unlikely to get from SSA on a regular basis. We must provide a detailed list of expenditures, income, balance etc every two years and submit it for court approval.
I can't guarantee that SSA will apply the exact same standard but I think you could make a case for them to do so given similar uses of the dedicated account funds.
You can always call SSA at 1-800-772-1213 between 7 am and 7 pm EST or you can submit your question online at the SSA website.
