Understanding Social Security Representative Payees
By Mark B Jones
Imagine being faced with one of the most difficult moments in life where a loved one can no longer care for themselves. Upon an already growing list is dealing with Social Security Benefits. After waiting anxiously for hours in line or on the phone with torturous hold music, you are finally able to reach a representative. Immediately, complications arise as you are told Powers of Attorney are not accepted to discuss or deal with benefits. Instead, you must appoint a Representative Payee.
What is a representative payee?
A Representative Payee is a person, agency, organization, or institution that is selected to manage one’s benefits with the Social Security Administration in the event they are unable to manage those benefits themselves. According to the Social Security Administration1, there are three instances when a Representative Payee is needed, specifically:
- Children under the age of 18
- Legally Incompetent Adults
- Anyone determined to be incapable of managing their benefits directly
How do you choose a representative payee?
In most situations, I believe it would be best to choose a loved one or someone you know who is vested in their wellbeing. So, if you have a loved one or older parent where this may be appropriate, I believe you should review this planning strategy sooner rather than later. A Representative Payee could include a parent, spouse, close relative, guardian, or friend. Additionally, one could appoint a nursing home or health care provider, certain public agencies, or a Social Security approved non-profit agency to fill the role of Representative Payee2.
To establish a representative payee all you need is the SSA-11 form - this can be found on the SSA.gov website - and a type of identification (i.e., driver’s license, passport, etc). Simply, bring both items to your nearest social security office. There they will process the form and set up the representative payee.
What is the role of a representative payee?
The primary role of a Representative Payee3 is to know the current needs of the benefit holder and properly use those benefits in their best interests. They will use these benefits to first cover expenses relating to food, housing, clothing, medical care, and personal comfort items. Any additional benefits remaining must be saved for the benefit holder, preferably in an interest-bearing bank account4. In all reality, the payee’s duties are somewhat simple, but a critical role to fill.
On an annual basis, a Representative Payee is required to submit an accounting summary - known as the Payee Report5 - detailing how the benefits were spent and saved throughout the year. Additionally, a Representative Payee has the ability to respond on one’s behalf to any requests or inquiries from the Social Security Administration. At the same time, any material changes to a benefit holder that may affect their benefits, should be reported to the Social Security Administration by the Representative Payee.
What can a representative payee not do?
It is important to note that a Representative Payee agreement only pertains to matters between the benefit holder and the Social Security Administration. While a Power of Attorney is not accepted by the Social Security Administration, a Representative Payee agreement has no authority to enter into binding contracts on one’s behalf. Furthermore, the Representative Payee agreement can be changed or terminated at any time, by way of request of either the benefit holder or Representative Payee6.
If you currently find yourself in this situation, or you foresee it in the near future for yourself or a loved one, reach out and we can discuss further. I believe this is one area that will benefit all to be prepared well in advance.