Debit Cards for Minors Receiving SS Direct Deposit

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Question:

I have a customer that opened three accounts, one for each of her children as they receive Social Security direct deposit benefits. The mother is the signer on each account and the individual child was added as an owner only because they are only nine, eleven and seventeen years of age. The mother wants debit cards in the children’s names so she can keep the account straight as to where she is pulling the money from. Can we issue debit cards to a minor and if so, would the mother have the legal right to use them? How would it be handled if the child’s card was used and they wanted to dispute the transaction?

Answer:

I can't recommend issuing cards to the kids, but it would not be inappropriate to issue separate cards to the mother as representative payee. Do you have the ability to issue cards with two name lines embossed? That would allow you to issue them in a format like "Sarah R. Payee/FBO Minor Payee" and she would have the separation of transactions she needs. As Rep. Payee for her kids, the Social Security Administration expects her to spend those funds on their behalf. I see no reason that a debit card could not be issued to assist her in that responsibility, if your bank is willing to do so. Although the funds in these accounts are beneficially owned by the kids, they don't have any right to the accounts themselves and they should not have card access.

First published on BankersOnline.com 9/08/08