Not an expert on SS, but my son did receive benefits while he was in high school 6-9 years ago. I was required to open a bank account in his name so the check could be directly deposited. The money had to be used for his expense so–food, clothing, etc. When we talked to the SS when my h was retiring, my son’s benefits were a surprise to us. I mentioned that I thought we would put the money into an account for his education and was told that that was not an allowable use of his money. Each year that he received benefits, I had to sign a statement telling how the money was used and that no money was left at the end of the year. I am not sure how this is enforceable but I didn’t want to mess with SS, so we used his money for food, etc., and set up his education account from “other” money.
My son did not qualify for financial aid so I don’t know how the benefit is reported on FASFA. I would think that the payments would have to be recorded whether you physically still hold the money or not.