What is a Social Security Representative Payee?
Social security benefits can be a lot to manage for some. The application process takes time and quite a bit of effort, particularly if you try to do it alone, and maintaining your benefits can be challenging as well. The fact is this: not everyone can do it on their own. Some people need extra help with managing their social security benefits, which is why you might consider a representative payee.
What is a Representative Payee?
A representative payee is an individual or organization that manages the funds of a beneficiary who might be unable to do so on their own. For example, maybe the beneficiary is a disabled minor that cannot legally handle their own benefits. Or, maybe the beneficiary suffers from dementia or another mental impairment. It could also be that the beneficiary is physically unable to manage their money.
Who is a Representative Payee?
A representative payee is usually a relative or close friend of the beneficiary. The representative payee needs to be someone who knows the needs of the beneficiary, which is why the Social Security Administration (SSA) prefers to appoint people close to the beneficiary. Typically, parents, legal guardians, relatives, or close friends are likely to know what the beneficiary needs in their day-to-day life. However, sometimes, the SSA will appoint an institution or organization (such as a nursing home) as the representative payee. Regardless of who is responsible for the beneficiary’s funds, all representative payees have the same responsibilities.
The Responsibilities and Restrictions
Being a representative payee is no easy task. There are several rules and responsibilities that go with the role. First and foremost, how a representative payee handles the money for a beneficiary is based on their essential needs, such as:
· Medical/dental expenses
· Quality of life items (e.g. an electric wheelchair)
· Personal care items
If there is leftover money, the representative payee may use it to pay for rehabilitation expenses, overdue bills, education, or entertainment. If there is leftover money after that, it must be saved, and a representative payee can never use a beneficiary’s funds for personal gain.
Managing the Funds as a Representative Payee
A representative payee is authorized to handle only social security funds for the beneficiary; other non-social security funds cannot be handled by a representative payee unless granted separate authorization, such as a power of attorney. Additionally, social security doesn’t recognize a power of attorney as an acceptable way to handle social security funds. Only a representative payee may handle social security funds for a beneficiary. Representative payees must hold and save the beneficiaries’ funds in a specific manner, and store funds in a separate bank account owned by the beneficiary. A representative payee cannot mix their own funds with those of the beneficiary, and the beneficiary cannot have access to the account, even though they own it and the funds it contains.
In addition to holding funds a specific way, representative payees must keep records of all purchases. The SSA requires annual reports on how representative payees spent the funds, and if representative payees don’t keep accurate records, they could face penalties.
· All representative payees must maintain records of how funds are spent, although not everyone has to provide annual reports, such as:
· Parents (natural or adoptive) of a minor child beneficiary who primarily live in the same residence as the child;
· Legal guardians of a minor child beneficiary who primarily live in the same residence as the child;
· Parents (natural or adoptive) of a disabled adult beneficiary who primarily live in the same residence as the beneficiary;
· Spouse of a beneficiary; and
· State mental institutions participating in the SSA’s onsite review program.
Finally, representative payees cannot, under most circumstances, charge a fee for their services, and must report to the SSA whenever certain changes occur that could affect benefits, such as:
· Change of residence
· The beneficiary gains or loses a roommate (even if that roommate is a child)
· The beneficiary no longer needs a payee or dies
· Custody of a child beneficiary changes/a child is adopted
· The beneficiary enters a marriage
· The beneficiary starts or stops working
· Parents of a stepchild beneficiary divorce
· The beneficiary is imprisoned for a crime with a sentence of more than one month
· The beneficiary becomes institutionalized by a court order because of mental impairment
· Additional government benefits are received by the beneficiary, or the benefit amount changes
· Medical improvement occurs for the beneficiary
· The beneficiary leaves the United States for a period of no less than 30 days
· You move/change residences
· You become no longer responsible for the beneficiary
· An outstanding warrant for a felony or for a crime that is punishable by death or no less than one year in prison in the state where you/the beneficiary live is issued to you
· Violation of a condition of your parole or probation
· You are convicted of a felony
· You wish to stop representing the beneficiary
For beneficiaries receiving SSI, representative payees must also disclose the following:
· A married beneficiary separates, or if a beneficiary starts living with their spouse again after a separation
· The beneficiary begins staying at or moves out of a hospital, nursing home, correctional facility, or other institution
· Someone begins living in or moves out of the beneficiary’s residence
· The beneficiary or their spouse sees a change in their income/resources
· Countable resources are worth or are expected to become worth over $2,000 ($3,000 for couples)
Failure to report any of the above events could mean that the SSA would send a greater amount of benefits than is usual. If this happens, the funds must be paid back to the SSA as soon as possible.
If the representative payee intentionally withholds information to continue receiving benefits, they could face criminal prosecution. Fines/imprisonment await those who lie to or withhold information from the SSA. Additionally, if representative payees misuse their beneficiaries’ funds, they could face equally devastating consequences.
Representative Payee Restrictions
· There are plenty of things representative payees cannot do, such as:
· Sign legal documents not related to social security benefits on behalf of the beneficiary
· Have legal authority over income not from social security benefits
· Use beneficiary’s funds for personal expenses
· Spend funds that would leave the beneficiary without basic necessities
· Keep leftover/saved funds after ceasing to be the representative payee
How to Become a Representative Payee
Becoming a representative payee usually requires an in-person interview at your local social security office. You must show proof of identification and present your social security number. Furthermore, you’ll be asked questions about the beneficiary’s needs and why you think you are a qualified, responsible individual capable of handling all the duties associated with being a representative payee.
Additionally, you’ll have to explain why the beneficiary cannot handle their money on their own. If you’re up to the task, the SSA requires that you fill out form SSA 11-BK. If you become the payee, you’ll receive the beneficiary’s funds instead of them, and you will be responsible for the beneficiary from that point forward.
Need More Representative Payee Information?
If you have additional questions or have been denied social security benefits and need representation, contact Renda Law in Tacoma today! We’re available for a FREE consultation, and remember, there are never an upfront fees!