Guide for Organizational Representative Payees

Managing and conserving funds

We recommend that you hold the beneficiary’s funds for current and foreseeable needs in an interest bearing checking or savings account. A checking account is better in some ways, because you will have cancelled checks and/or statements that show how the funds are spent.

We encourage you to have funds directly deposited to an interest-bearing account that minimizes fees and enables you to keep clear records. Any interest earned by the account must be credited to the beneficiary.

The bank account must be titled so that it is clear that the money in the account belongs to the beneficiary and that the representative payee acts only in a fiduciary capacity. Neither the representative payee nor any other party can have ownership interest in the account. Most importantly, the beneficiary must never have direct access to the account.

Funds not needed for the beneficiary’s current maintenance should be conserved or invested on behalf of the beneficiary in an account that is insured under federal or state law. Any account must show that the payee holds the property in trust for the beneficiary and that the payee has only a fiduciary interest in the funds.

We require representative payees to complete written reports accounting for how the beneficiary’s funds were used.

In the event that a payee ceases to serve as a beneficiary’s payee, any conserved funds must be returned to SSA so that we can transfer the conserved funds to a new payee or to the beneficiary moving into direct pay status.

To facilitate accounting reports and transferring conserved funds, beneficiary funds should be held in a separate account. A payee should not commingle personal or organizational operating funds in accounts containing beneficiary funds.

Bank Accounts

Based on the number of beneficiaries served, an organizational payee may choose to maintain individual accounts for each beneficiary or request payment into a collective bank account to serve many beneficiaries.

Individual Accounts

Any account title authorized or approved under State law that shows beneficiary ownership and the payee’s organization as fiduciary is acceptable. Do not use joint accounts. If possible, do not use the name of an individual staff person the bank account; use your organization’s name.

Examples of Individual Account Titles

• Matthew W. Bene by Sunnyside Nursing Home, representative payee; or

• Sunnyside Nursing Home, representative payee for Caroline Q. Public

Collective Accounts

Organizations or individuals who serve a large number of beneficiaries may wish to place beneficiary funds in a single checking or savings account. This is called a “collective account”. SSA must approve your request to use a collective account. Organizations find collective accounts more efficient for the following reasons:

• Centralizes the individual accounts;

• May earn larger amounts of interest to allocate to the beneficiaries; and

• May avoid checking account service charges.

Usually, SSA will approve your request to use a collective account provided:

• The account title shows that the funds belong to the beneficiary and not the payee.

• The account is separate from the organization’s operating account.

• Any interest earned belongs to the beneficiary.

• There are clear and current records showing the amount of each beneficiary’s share and proper procedures for documenting credits and debits.

• The account and supporting records are made available, upon request, to Social Security.

 Examples of Collective Account Titles:

• “Sunnydale Nursing Home, representative payee for Social Security beneficiaries”

• “Sunnydale patients’ fund for Social Security beneficiaries”

If you have any questions or wish to set up a collective account, contact your local Social Security office.

Disposing of conserved funds after you stop being the payee

If you will no longer be the payee, you must notify Social Security immediately. This is important because a new payee will have to be selected as soon as possible.

When you are no longer responsible for the beneficiary, you must return any funds, including interest and cash on hand to SSA. We will then reissue the funds to the beneficiary or to a new payee.

What to do with conserved funds when a beneficiary dies

When a person who receives Social Security payments dies, no payment is due for the month of death, even if he or she dies on the last day of the month. Any payment received for the month of death or later must be returned.

An SSI payment, however, is payable for the month of death. But, you must return any SSI payments for any months after the month of death.

Any conserved funds you have belonging to the beneficiary are the property of his or her estate. They must be given to the legal representative of the beneficiary’s estate or otherwise handled according to state law. If you need information about state law, contact the probate court or an attorney.