20 CFR 404.1603 and 404.1606
Section 205(j) of the Social Security Act provides that, when the interest of an entitled individual is served thereby, his social security benefits may be paid to a relative or some other person for his use and benefit. Pursuant to this provision of the law, the R County Home and Chronic Hospital was designated as representative payee to receive the monthly social security benefits payable to 13 of the parties in the House.
The Home has adopted the policy of setting aside $2 per month from each beneficiary's check for his personal use. This amount is for the purchase of newspapers, candy, soft drinks, etc. The balance is applied to the cost of maintenance which in each case exceeds the amount of the benefit payable to the particular beneficiary.
A question aries as to whether the policy of the Home of allocating the benefits it receives as representative payee in this manner serves the best interests of each individual beneficiary.
Regulations No. 4, §§ 404.1603 and 404.1606 provide as follows:
As reflected by the above quoted sections of the regulations, it is the policy of the Social Security Administration that the representative payee shall apply the payments certified to him on behalf of a beneficiary in the manner and for the purposes determined by him to be in the beneficiary's best interest. Further, where the beneficiary is confined in a Federal, State, or private institution because of a mental or physical incapacity, it is considered in the best interest of the beneficiary for the representative payee to allocate expenditure of the payments so certified in a manner which will facilitate the beneficiary's earliest possible rehabilitation or release from the institution or which will help him live as normal a life as practicable in the institutional environment.
The Home's practice of allocating the payments in the same manner for all beneficiaries does not appear to be a proper exercise of the Home's responsibility as representative payee. It is well known that patients vary considerably in their ability to utilize personal spending funds. Although it may be in the best interests of a particular patient to set aside $2 for his personal use, it may well be to the best interest of another patient to allocate to him a larger amount for personal spending for a wider variety of personal needs. It may also be in a particular beneficiary's best interest to allocate a portion of the funds for some purpose which will contribute to his rehabilitation or early release, such as training or recreation, or to provide a fund for his use when he is released.
For the above reasons, it is held that the policy of the R County Home and Chronic Hospital, which allocates benefits it receives as representative payee in a way that does not take into consideration differences in individual needs and interests of beneficiaries, is not a policy that serves the best interests of individual beneficiaries. Accordingly, the Home was advised that it should evaluate the needs and interests of each beneficiary patient and attempt to use his benefit payments in a manner which will serve his particular interests to the fullest extent practicable.
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