A representative payee is a surrogate or fiduciary appointed, upon application and following investigation, by the Social Security Administration (SSA) to administer the Social Security (SS) or Supplemental Security Income (SSI) benefits payable to a financially incapable beneficiary, a recipient of SS or SSI benefits whom the SSA has determined to be financially incapable, that is to say, incapable of managing his or her SS or SSI benefits.
A surrogate is a person who is appointed to act for another; a surrogate also may be and frequently is a successor or substitute for another. A fiduciary is a person to whom property is entrusted for the benefit of another. The fiduciary relationship is a relationship comprising three roles: (1) the initiator, (2) the fiduciary, and (3) the beneficiary. The fiduciary relationship is a legal relationship in which the law requires the fiduciary to act in good faith and with trust and candor for the benefit of the beneficiary in all matters within the scope of the relationship.
What is a Representative Payee?
A representative payee is an individual or organization that receives Social Security and/or Supplemental Security Income (SSI) payments for a beneficiary who cannot manage or direct the management of his or her money. Representative payees should use the funds for the current and foreseeable needs of the beneficiary and save any remaining funds for the beneficiary’s future use.
What is a Beneficiary?
A beneficiary is a person who receives Social Security and/or Supplemental Security Income (SSI) payments. Social Security and SSI are two different programs; both programs are administered by the Social Security Administration (SSA).
Who Needs a Representative Payee?
The law requires minor children and legally incompetent adults to have payees. In all other situations, adult beneficiaries are presumed to be capable of managing benefits. If there is evidence to the contrary, however, SSA may appoint a representative payee.
How Do I Apply to be a Representative Payee?
You should contact the SSA office nearest you to apply to be a payee. You must then submit an application, form SSA-11-BK (Request to be selected as payee) and documents to prove your identity. SSA requires that the payee application must be completed in a face-to-face interview (with certain exceptions).
What Are the Duties of a Representative Payee?
A payee acts on behalf of the beneficiary. A payee is responsible for everything related to benefits that a capable beneficiary would do for himself or herself. SSA encourages payees to go beyond just managing finances and to be actively involved in the beneficiary’s life. The following list enumerates the required duties of a payee.
Required Duties of Representative Payee:
- Determine the beneficiary’s needs and use his or her payments to meet those needs;
- Save any money left after meeting the beneficiary’s current needs in an interest bearing account or savings bonds for the beneficiary’s future needs;
- Report any changes or events which could affect the beneficiary’s eligibility for benefits or payment amount;
- Keep records of all payments received and how they are spent and/or saved;
- Provide benefit information to social service agencies or medical facilities that serve the beneficiary;
- Help the beneficiary get medical treatment when necessary;
- Notify SSA of any changes in your (the payee’s) circumstances that would affect your performance or continuing as payee;
- Complete written reports accounting for the use of funds; and
- Return any payments to which the beneficiary is not entitled to SSA.
What About a
Power of Attorney?
A power of attorney is a legal process where one individual grants a third party the authority to transact certain business for that individual. It does not diminish the rights of the individual and does not usually grant the third party the right to manage the individual’s assets. It typically makes no finding about the individual’s capability or competence and is not recognized by the Treasury Department for the purposes of negotiating federal payments, including Social Security or SSI checks.
Therefore, if you are an agent or attorney-in-fact under a power of attorney for a beneficiary who is incapable of managing his or her benefits, then you must still file an application with the SSA to be designated and to serve as the representative payee for that beneficiary.
Can I Collect a Fee for Serving as a Representative Payee?
No, unless you are a qualified organizational payee who has applied and been approved in writing by SSA to collect a fee.
SSA never authorizes an individual payee to charge a fee for their payee services. SSA can authorize certain types of organizations to collect a fee from a beneficiary’s monthly payment for providing representative payee services if they are qualified to do so under the law, have applied and have been approved in writing by SSA. To qualify as a fee for service payee, the organization must be:
- A community based, nonprofit social service organization, that is bonded and licensed in the state in which it serves as payee, or
- A state or local government agency with responsibility for income maintenance, social service, health care, or fiduciary duties, and
- Regularly serving as a representative payee for at least five beneficiaries, not be a creditor of the beneficiary (some exceptions apply), and
- Submit a SSA-445 application to collect a fee to SSA and be authorized in writing by SSA to collect a fee.
Can I be Reimbursed From the Beneficiary’s Funds if I incur an Expense On Behalf of the Beneficiary?
You may be reimbursed for reasonable actual out-of-pocket expenses you incurred on behalf of the beneficiary. For example the cost of transporting the beneficiary to a doctor’s appointment (such as cab fare, mileage and tolls); postage to pay the beneficiary’s bills, and fees for money orders is considered out-of-pocket expenses. The amount of reimbursement must correspond with the actual expense you incurred for the beneficiary. You must keep records of your out-of-pocket expenses.
Note: If you are a fee for service payee, the cost of postage is not reimbursable.
Payees are not permitted to be reimbursed from the beneficiary’s funds for any expenses that are considered overhead. For example, the costs associated with utilities, rent, office equipment and supplies cannot be collected from beneficiaries.
What Type of Bank Account Should I Set Up for the Beneficiary?
A checking account is better in some ways, because you will have canceled checks and/or statements that show how the funds are spent. In making the decision to use a checking account, you should consider the fact that some beneficiaries cannot maintain high enough balances to avoid service charges. But if you must pay bills through the mail, a checking account would still be cost effective because cashier’s checks and money orders have charges associated with them, as well. You should set up an account that minimizes fees and enables you to keep clear records. SSA encourages interest-bearing accounts. The bank account must be titled so that it is clear that the money in the account belongs to the beneficiary.
What Is the Proper Use of Benefits?
Benefits should be used for current needs such as food, clothing, shelter, utilities, dental and medical care and personal comfort items, or reasonably foreseeable needs. If not needed for these purposes, the benefits must be conserved or invested on behalf of the beneficiary. Where the beneficiary has unmet current maintenance needs, saving benefits serves little purpose and would not be in the beneficiary’s best interests.
A representative payee must use benefits in the best interests of the beneficiary, according to the payee’s best judgment.
What Are Some Examples of What Payees Cannot Do?
A payee cannot:
- Sign legal documents, other than Social Security documents, on behalf of a beneficiary.
- Have legal authority over earned income, pensions, or any income from sources other than Social Security or SSI.
- Use a beneficiary’s money for the payee’s personal expenses, or spend funds in a way that would leave the beneficiary without necessary items or services (housing, food, medical care).
- Put a beneficiary’s Social Security or SSI funds in your or another person’s account.
- Use a child beneficiary’s
dedicated accountfunds for basic living expenses. This only applies to disabled/blind SSI beneficiaries under age 18.
- Keep conserved funds once you are no longer the payee.
- Charge the beneficiary for services unless authorized by SSA to do so.
The Beneficiary Wants to Spend Money on Things That Do Not Meet My Approval. What Is My Responsibility?
Your main obligation is to ensure that the current needs of the beneficiary are met. Once that has been done, the beneficiary has the right to have some discretionary spending money, even if you do not approve of all of his or her choices. In the case of drug or alcohol abuse, you may want to give the beneficiary only small amounts of spending money, or purchase food to give to the beneficiary, rather than giving him or her cash. If you think the beneficiary is spending his or her money on illegal or dangerous items and activities then you should seek help from a social service agency. You can request guidance from your local SSA office or by calling 1-800-772-1213.
How Should Benefits Be Used If A Beneficiary Is Institutionalized?
When a beneficiary resides in an institution, you should allot a reasonable share of benefits for the institution’s customary charges. An institution’s customary charges and the beneficiary’s other current needs should be taken into account. You should not pay an amount for current maintenance in excess of the legal maximum charge established by the State.
If a beneficiary is receiving care in a State, Federal, or private institution not receiving Medicaid funds on behalf of the beneficiary, you should give highest priority to the beneficiary’s current maintenance. Current maintenance is not limited to the usual institutional charges but includes expenditures for items that will aid in the beneficiary’s recovery or release from the institution or improve the beneficiary’s condition while in the institution. Any benefits remaining should be conserved or invested except as they may be otherwise properly used. This includes temporarily maintaining the beneficiary’s residence outside the institution unless a physician certifies the beneficiary is unlikely to return home.
If an SSI beneficiary enters a facility report the admission to SSA. If he/she receives substantial Medicaid payments for the cost of care and receives the $30 personal needs allowance, the benefit may not be used for current maintenance.
If the beneficiary has a dependent spouse, child or parent living at home, and if the current needs of the beneficiary are met, you may be able to use part of the benefit to support the legal dependents. If you think this situation may apply, contact your local Social Security office for guidance.
How Much Money Should Be Set Aside for the Personal Needs of a Beneficiary Who Is In An Institution or Nursing Home?
You should set aside a minimum of $30 each month to be used for the beneficiary’s personal needs or saved on the beneficiary’s behalf.
How Do I Handle Large Sums of Money ( for example, if a beneficiary receives a large retroactive payment covering several months, or even years, of benefits)?
The main thing to keep in mind is that the money must be used in the best interests of the beneficiary. The payee’s first priority is to ensure that the beneficiary’s current needs are met, this includes food, shelter, medical care and other items for the beneficiary’s comfort. If money is left over after providing for those needs, the payee could spend that money on things that would improve the beneficiary’s daily living conditions or provide better medical care. The payee may also use left-over money to satisfy the beneficiary’s debts. However, SSA approval is required when the payee is also a creditor.
If the beneficiary receives SSI, he or she cannot have more than $2,000 in cash and property (other than a home and car). The back payment must be spent within 9 months so that the beneficiary’s total resources are below $2,000. If you don’t spend the money within 9 months, an overpayment may occur and benefits may stop.
What If I as the Payee for a Child Receiving SSI Receive a Large Sum of Money?
Certain large past-due SSI payments to blind or disabled children that cover more than six months of benefits must be paid directly into a separate account in a financial institution. The SSA calls this separate account a
dedicated account because funds in this account may be used only for certain expenses, primarily related to the child’s disability.
The money in the
dedicated account and the interest that it earns are not countable as an SSI resource.
How Do I Spend
Dedicated Account Funds?
Money in the
dedicated account must be used for the following allowable expenses:
- Medical treatment and education or job skills training;
- If related to the child’s disability, personal needs assistance; special equipment; housing modification; and therapy or rehabilitation; or
- Any other item or service related to the child’s disability.
If you are not certain whether or not an item or service is allowable, first request guidance from your local Social Security office.
What Happens If I Spend
Dedicated Account Funds for Things Other Than Allowable Dedicated Account Items?
If you use
dedicated account” funds for anything other than the allowable
dedicated account fund expenses, you must repay SSA, from your own funds, an amount equal to what you spent.
What Changes or Events Do I Need to Report to SSA?
You must report the following events as soon as possible, by calling SSA at 1-800-772-1213, or contacting your local SSA office. Note that there are additional reporting requirements for SSI beneficiaries at the end of the list.
- The beneficiary dies;
- The beneficiary moves;
- The beneficiary marries;
- The beneficiary starts or stops working, even if the earnings are small;
- A disabled beneficiary’s condition improves;
- The beneficiary starts receiving another government benefit, or the amount of that benefit changes;
- The beneficiary plans to leave the U.S. for 30 days or more;
- The beneficiary is imprisoned for a crime that carries a sentence of over one month;
- The beneficiary is committed to an institution by court order for a crime committed because of mental impairment;
- Custody of a child beneficiary changes or a child is adopted;
- The beneficiary is a child (including a stepchild), and the parents divorce;
- You can no longer be payee; or
- The beneficiary no longer needs a payee.
Additional events that a payee must report regarding SSI beneficiaries are:
- The beneficiary moves to or from a hospital, nursing home, or other institution;
- A married beneficiary separates from his or her spouse, or they begin living together after a separation;
- Somebody moves into or out of the beneficiary’s household;
- The beneficiary has any change in income or resources (i.e., a child’s SSI benefit check may change if there are any changes in the family income or resources); or
- Resources that exceed $2000.
How Often Do I Need to Report to SSA on How Benefits Have Been Used?
Usually SSA will send the payee a
Representative Payee Report once a year. Fill it out promptly and send it back. The report is simple to complete if you, the payee, keep clear records of how the money is either spent or saved on the beneficiary’s behalf throughout the year.
I Lost the Annual Report Form That I Received in the Mail From the SSA. What Should I Do?
You may either call SSA at 1-800-772-1213 between 7 a.m. and 7 p.m. on business days, or you may contact your local SSA office to obtain another report form.
Whom Do I Contact If I Have Problems or Questions?
You may call SSA at 1-800-772-1213 between 7 a.m. and 7 p.m. on business days, or contact your local SSA office between 9 a.m. and 4 p.m. on business days.
People who are are deaf or hearing impaired may call our toll-free
TTY number, 1-800-325-0778, between 7 a.m. and 7 p.m. on business days.
NOTE: To obtain additional information and to view or download the SSA’s
Guide for Representative Payees, please see the following link: A Guide For Representative Payees.