Guide for Organizational Representative Payees

Payment for representative payee services

SSA can authorize certain types of organizations to collect a fee from a beneficiary's monthly payment for providing representative payee services. We refer to these organizations as "fee for service" (FFS) representative payees.

To qualify as a FFS organization, your organization must:

• be a community based, nonprofit social service agency that is bonded and licensed (providing licensing is available) in the state in which you serve as a payee; or

• be a state or local government agency with responsibility for income maintenance, social service, health care, or fiduciary duties.

In addition, an FFS organization must:

• regularly serve as a payee for at least five beneficiaries; and

• not a creditor of the beneficiary; and

• formally apply and be authorized by SSA to collect a fee.

An exception to the creditor restriction may be granted when:

• The goods or services that create the creditor relationship meet the current needs of the beneficiary. To meet this condition, these items must be for the immediate needs of the beneficiary, such as food, clothing and housing. Creditor relationships that are established to discharge past debts do not meet this requirement ; and

• The cost(s) of goods and services provided by the organization are equitable. This means that the amount the beneficiary is charged for the organization's services is consistent with rates charged other individuals and is reasonable for the services provided. The organization may have a policy that considers the beneficiary’s ability to pay when determining the amount to be charged for the goods and services it provides.

Important: A creditor organization's authorization to collect a fee for serving as a payee for one beneficiary does not extend to subsequent applications for other beneficiaries. Authorizations must be made on a case-by-case basis, and SSA will advise you of their decision.

FFS payees are required to submit yearly proof of bonding and licensing (if available in the state) and copies of available independent audits that were performed since the last review by SSA.

Fee Amounts

Effective December 2007, the monthly fee for payee services is the lesser of 10% of the combined Social Security and SSI monthly payment or $35.00. For individuals with a DAA condition, the monthly fee is the lesser of 10% of the monthly payment or $68.00. SSA must authorize the higher fee. The dollar limit on the fee a qualified organization can collect may be increased in December by the same percentage as the Cost-of-Living Adjustment (COLA). An increased fee may first be collected from the check paid in January.

A fee may not be collected if any of the following apply:

• The beneficiary doesn't’t receive a payment in the month;

• Your organization receives compensation, including guardianship fees, for performing representative payee services from another source;

• Your organization did not provide payee services for the month;

• We have determined that you have misused a beneficiary’s funds; or

• You serve less than five beneficiaries.

Current payments may not be used to collect fees for past months. In addition, a beneficiary's conserved funds (checking/saving account, bonds, etc.) or an institutionalized beneficiary's personal needs funds cannot be used to pay fees for payee services.

Note: One exception allows an organization to collect a fee from payment of retroactive amounts. The exception applies when a retroactive payment is made for a prior period of nonpayment or incorrect payment and the organization:

• is approved to collect a fee for the months for which the payment is made;

• did not collect a fee or collected a reduced fee;

• provided representative payee services for the month for which payment is made; and

• is the representative payee of record when the retroactive payment is received.

Example: A county mental association was an FFS payee for a beneficiary whose disability includes a DAA condition and these payments were terminated effective January 2004. Members of the association staff assisted the individual in processing an appeal of the termination. They also visited him at least monthly to ensure that his county assistance payments were being used for basic needs. In March 2004, the individual was reinstated and received retroactive payments for January through March. The payments were issued to the association, which continued providing payee services. The association can charge the individual $64 for each month covered in the retroactive payments.