What Happens When A Beneficiary Can’t Manage Their Social Security Benefits?

Social Security Representative Payee

Social Security or SSI (Supplemental Security Income) benefits help many senior citizens and persons with disabilities pay their bills and manage their own care. But if the person receiving those benefits (the “beneficiary”) is a minor, becomes incapacitated, or is otherwise unable to manage their own payments, the benefits can be disrupted.

The Social Security Administration has strict rules about who can manage Social Security and SSI payments. Even a Durable Power of Attorney executed by the beneficiary is not sufficient to allow a friend or loved one to receive and manage Social Security and SSI payments. If the beneficiary is unable to manage his or her own payments, the government requires that a Representative Payee be appointed to receive and manage the benefits.

What Is a Representative Payee?

A Representative Payee can be an individual or an organization appointed by the Social Security Administration to receive and manage Social Security or SSI benefits on behalf of another person. A Representative Payee’s duties include using the benefits for the current and future needs of the beneficiary, managing and saving funds not currently needed for future use, keeping a record of expenses, and providing reports to the Social Security Administration detailing the expenses and payments made on behalf of the beneficiary as requested.

Individuals acting as Representative Payees cannot get paid to serve in that capacity. However, organizations that qualify can apply to collect a fee to act as Representative Payees in certain circumstances.

Applying to be a Representative Payee

To apply to be a Representative Payee for a friend or loved one, you must contact your local Social Security office and complete a request to be selected as Payee form (SSA-11), and appear at the Social Security office for an in-person meeting with Social Security officials to verify your identity and complete an application to be appointed as a Representative Payee.

Responsibilities of a Representative Payee

As the Representative Payee, you are responsible for all aspects of the management of benefit payments. These payments should be used to pay the beneficiary’s necessary expenses, including food, housing costs, utilities, and medical and dental expenses. Any funds not needed for these payments should be saved or invested for the benefit of the beneficiary. 

If the beneficiary is in a hospital or nursing home, some of the benefits received should be reserved to pay the usual expenses charged by those facilities.

All benefits payments must be used for the beneficiary; they are not permitted to be used to pay expenses of the Representative Payee or others. However, if the beneficiary’s current expenses and needs are being met, any additional funds may, in some circumstances, be used to support the beneficiary’s legal dependents. Guidance should be sought from the local Social Security Office before using funds for anyone other than the beneficiary.

Being appointed as a Representative Payee does not, by itself, grant the right to sign other legal documents or manage other forms of income or investments for the beneficiary. It is important to have a Durable Power of Attorney in place to handle these additional matters.

If you have questions about Social Security Benefits, who is entitled to them, who is allowed to manage them, and any other legal issue related to Social Security, use our site to find a qualified Estate Planning or Social Security lawyer in your area.

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Posted - 03/30/2018