20 CFR 404.1604 and 404.1606
A criminal action was brought against A. While this action was pending the court, proceeding under a section of the State penal code, found A insane and committed her to a State mental hospital. A few months later A became entitled to social security disability insurance benefits. H, a relative, was selected as representative payee to receive A's benefits for her use and benefit.
From time to time H has been sending money to A for her personal needs out of the benefit payments. She has deposited the balance in a savings account for A's use when and if A is released from the hospital. There is a balance of $2,500 in the savings account at the present time.
H was requested by the State Department of Mental Hygiene to pay $50 per month for the care and maintenance of A. H contended, however, that the State could not properly charge for A's care and maintenance since she had been confined to the hospital because of criminal insanity.
Under the law of the State the estate of a mentally ill person who has been committed to a State institution pursuant to the applicable section of the State penal code is liable for the care and maintenance of such person.
Under section 205(j) of the Social Security Act, the Secretary may, when it appears that the interest of a beneficiary may be served thereby, certify payment of benefits to a relative or other person for the use and benefit of the beneficiary. The general rule, as stated in § 404.1604 of Regulations No. 4 of the Social Security Administration (20 CFR 404.1604), is that payments shall be considered as having been applied for the use and benefit of the beneficiary when used for the beneficiary's current maintenance, and that where a beneficiary is receiving care in an institution, current maintenance shall include the customary charges made by the institution. Section 404.1606 of Regulations No. 4 (20 CFR 404.1606) provides that where a beneficiary is confined in a Federal, State or private institution because of mental or physical incapacity, the relative or other person to whom payments are certified on behalf of the beneficiary shall give highest priority to expenditure of payments for the current maintenance needs of the beneficiary, including the customary charges made by the institution in providing care and maintenance. However, there are no "customary charges" within the meaning of § 404.1606 if the estate of the beneficiary is not liable for his care and maintenance. On the other hand, if the State law makes the estate liable for the care and maintenance of the beneficiary, it would be proper under the regulation for the representative payee of the beneficiary to use part of the benefits to meet the customary charges made by the institution.
Accordingly, since A's estate is liable for her care and maintenance in the hospital, it is held, that payment of the $50 per month requested by the State Department of Mental Hygiene for the care and maintenance of A would be a proper use of A's benefits under the regulations.
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