When a person receiving Social Security or Supplemental Security Income (SSI) is not able to manage his or her money, a representative payee can help. Currently, more than seven million children and adults who receive monthly checks get help from representative payees.
Representative payees help people (beneficiaries) by making sure their needs are met. Some of these needs include making sure the housing and utilities are paid on time, food is available, medical and dental needs are met, clothing is purchased and personal care items are provided.
If your client needs to help another individual in managing their money, there are several things that they need to know:
- The first is determining how to apply to be a representative payee.
- The second is learning about the reporting responsibilities.
- The third is understanding how the individual will be expected to account for the money they receive on behalf of the beneficiary.
- Finally, when a person becomes a representative payee, they will need to know what to do when they can no longer serve as representative payee.
Applying to be Representative Payee:
To apply to be a payee for a beneficiary, the individual should contact the Social Security office closest to them. They will be asked to fill out an application. They will also be asked to prove their identity. In almost all cases, Social Security requires that the application be submitted along with a face-to-face interview. Several factors are considered before making a payee determination. We consider how long the applicant and the beneficiary have known each other. We try to determine if the applicant is the best person to serve as representative payee for the beneficiary. We consider their relationship to each other. We also consider criminal history of the person applying to be the representative payee. We consider if the payee has other types of income or if the beneficiary owes the payee money. Selecting the right representative payee for an individual that needs assistance is very important to us.
Representative Payee Responsibilities:
Once SSA selects the applicant to be a representative payee, the payee must make sure the beneficiary’s day-to-day needs are met. As a payee continues helping, they will be asked to report any changes that could affect the amount of money the beneficiary is due. This list includes some examples of things that may affect the benefit amount. They should report when the beneficiary:
- Starts or stops working
- Has a medical condition that improves
- Starts receiving another benefit type or the amount changes
- Goes to jail for a crime that carries a sentence of more than one month
- Is a child and custody changes or an adoption takes place
- Is a stepchild and the parents divorce
- Gets married
- No longer needs a payee
Your client must also tell us if they are no longer responsible for the beneficiary, they move, they no longer want to be payee, they are convicted of a felony, or if they have violated a condition of their probation or parole.
Responsibilities Of Reporting:
In addition to the requirements listed above, there are special reporting requirements for payees of beneficiaries getting SSI benefits. They should report when the beneficiary:
- Moves to or from a hospital, nursing home, or correctional facility or other institution.
- If married, when the couple separates or resumes living together.
- Has a change in income or resources
- Someone moves into or out of the beneficiary’s house
If the representative payee fails to report any of the actions described above to Social Security, the beneficiary may be paid too much money. In that case, the payee may have to return the money the beneficiary was not due and payments may stop. If Social Security determines the representative payee intentionally withheld information in order to continue receiving payments, the representative payee may be criminally prosecuted. Criminal penalties may include fines and imprisonment.
Representative payees for SSI recipients should be aware that savings and other resources are limited to $2,000 ($3,000 for a couple) under the SSI program. Keep in mind that interest on savings counts toward that limit.
Representative payees are responsible for keeping records and reporting how they spent their beneficiary’s benefits by completing a Representative Payee Report (Form SSA-623, SSA-6230, or SSA-6233). The appropriate form will be mailed to the representative payee about once a year. It may be helpful to obtain a copy of Social Security’s publication number 05-10076, “A Guide for Representative Payees”, because it contains a worksheet of income and expenses that will be useful when completing the Representative Payee Report. This report is also available online at www.socialsecurity.gov/payee/ .
When a Representative Payee Stops Being a Payee:
If the representative payee wishes to stop being a payee, they must notify Social Security immediately. This is important because a new payee will have to be selected as soon as possible. When the representative payee is no longer responsible for the beneficiary’s funds, they must return any benefits, including interest and cash on hand, to Social Security. The funds will be re-issued to the beneficiary or to a new payee.
When Your Client Wants to be Their Own Payee:
Your client has the right to receive their own Social Security check unless SSA has reason to believe they may spend their money in a way that might hurt them.
If your client has a representative payee because of a physical or a mental disability, in order to become their own payee, they must show SSA that they are now mentally and physically able to handle their money themselves. You can help your client provide:
- A doctor's statement that there has been a change in their condition and that the doctor believes they are able to care for themselves; or
- An official copy of a court order saying that the court believes that they can take care of themselves; or
- Other evidence that shows their ability to take care of themselves.
Note: Be advised that if SSA believes their condition has improved to the point that they no longer need a payee, we may reevaluate their eligibility for benefits.
Should you discover a situation where the payee has only been changed on one program (such as SSI), but your client receives benefits from both SSI and Social Security, you will need to contact your local field office to make the correction on the other check.
Q and A
Q. What are the duties of a Representative Payee?
A. A payee acts for the beneficiary. A payee is responsible for everything related to benefits that a capable beneficiary would do for themselves. SSA encourages payees to go beyond just managing finances and to be actively involved in the beneficiary’s life.
Q. Is “Power of Attorney” the same as being the Representative Payee?
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 money, bank accounts, property or possessions. The court does not usually make any decision about the Individual’s capability or competency when granting “Power of Attorney”. Power of Attorney is not recognized by the Treasury Department for the Purpose of negotiating federal payments such as Social Security or SSI Checks.
If an individual has a power of attorney, they would still have to file an application to be the representative payee for beneficiaries’ Social Security or SSI checks.
Q. Can my client’s representative payee charge a fee for serving as their Payee?
A. Only a qualified organizational payee, who has applied with and been approved in writing by SSA, can collect a fee for being a payee.
Q. What kind of bank account should be set up for the beneficiary?
A. A checking account will provide cancelled checks that have been written for the beneficiary that show how the funds were spent. If the payee pays the bills through the mail, a checking account is better because cashier’s checks and money orders have costs. SSA requires an account be used that minimizes fees and allows the payee to
keep good records. The account must be titled so that it is clear to whom the money belongs.
Q. Are there activities that Payees must avoid?
A. A representative payee cannot:
- Sign legal documents, other than Social Security documents, on behalf of the 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 money in a way that would leave the beneficiary without necessary items or services such as housing, food or medical care.
- Put a beneficiary’s Social Security or SSI funds in their own or another person’s account.
- Use funds from a dedicated account for daily living expenses.
- Keep any of the beneficiary’s funds once they are no longer the payee.
- Charge the beneficiary for services unless SSA tells them to do so.