SSA andRepresentative Payment:
The Rules and Policies that Apply
NDRN Annual Conference
June 5, 2014
Linda Landry
Disability Law Center
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Representative Payee Policy
• Every beneficiary has the right to manage
his/her own benefits.
• Unless s/he is a minor or has been adjudicated
legally incompetent.
• However, SSA may determine that a
beneficiary’s interests are better served with a
rep. payee.
• 20 C.F.R. 404.2001, 416.601, GN 00502.010
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Representative Payee Responsibilities
• Use benefits on behalf of beneficiary only.
• Determine payment manner and purposes, under
SSA guidelines.
• Properly receive & account for benefits &
expenditures.
• Notify SSA of any change affecting benefits.
• Submit accounting at SSA request.
• Notify SSA of any change affecting performance.
• 20 CFR 404.2035, 416.635, POMS GN 00600.000
et seq.
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Other Ways a Representative
Payee Can Help
• Help beneficiary establish a budget and make
financial decisions.
• Explain Social Security or SSI benefits.
• Ensure beneficiary is aware of current and
retroactive payments.
• Help beneficiary find other services.
• Negotiate with creditors and landlords.
• Recommend another if/when can no longer serve.
• POMS GN 00502.114B.
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Representative Policy
Beneficiary Under Age 18
• Beneficiary under age 18 must receive benefits through a
rep. payee, unless s/he is:
– Within 7 months of turning age 18 and is initially filing;
– Receiving SSDI on own wage record;
– Serving in the military;
– Living alone & supporting self;
– Parenting & experienced handling own finances; or
– Capable and no qualified payee is available.
• 20 CFR 404.2010(b), 416.610(b)
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Representative Payee Policy
Beneficiaries Over Age 18
• Beneficiaries determined legally incompetent
must receive benefits through a rep. payee.
– SSA may appoint the guardian or another person.
– 20 CFR 404.2010(a), 416.910(a)
– To be sure this applies, check extent of guardianship
• SSA may determine that others are physically or
mentally incapable of managing their benefits.
– 20 CFR 404.2010(b), 416.910(b)
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Representative Payee Policy
Determining the Need for a Payee
• Court determination of legal incompetancy
• Medical evidence
– From medical professional based on recent
examination of present condition
– POMS GN 00502.025
• Other evidence must also be sought
– Statements of relatives, friends and others
– In a position to know and observe the beneficiary
– POMS GN 00502.030, GN 00502.050
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Representative Payee Policy
Selection Process
• File SSA-11 – SSA takes online application
• Face-to-face interview, unless impracticable
• Advance notice to beneficiary of determination of need for
payee and name of payee
• Appeal within 10 days to stay the decision pending appeal
• Provide evidence of ability to manage own benefits
• Can provide evidence to dispute payee choice
• Rep payee applicant cannot appeal denial of application
• Beneficiary can apply to be own payee at any time
• 20 CFR 404.2024, 404.2030, GN 00502.007, GN 00503.100 ,
GN 00503.110A.2.
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Representative Payee Policy
Considerations in Selection
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Relationship to the beneficiary
Interest shown in the beneficiary
Legal authority over the beneficiary
Custody of the beneficiary
Whether the potential payee is in a position to
know of and look after the needs of the
beneficiary.
• 20 CFR 404.2020. 416.620, POMS GN
00502.130
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Order of Preference
Beneficiaries Under Age 18
• Natural/adoptive parent
– with custody, or a guardian
– w/out custody, contributing to support &
demonstrating strong concern
– w/out custody, not contributing but demonstrating
strong concern
• Relatives or friends contributing or
demonstrating concern
• Social agency or custodial institution
• 20 CFR 404.2021(c), 416.621(c), POMS GN
00502.105
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Order of Preference
Beneficiaries Age 18 and Older
• Legal guardian, spouse w/custody or
demonstrating strong concern
• Friend w/custody or demonstrating strong
concern for beneficiary’s welfare
• Public/nonprofit agency/institution w/custody
• For profit institution w/custody
• Others qualified & willing to serve as payee
• 20 CFR 404.2021(a), 416.621(a), POMS GN
00502.105
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Order of Preference
Drug Addition or Alcoholism
• Community-based nonprofit service agency
• Government agency w/social service or health
care mission
• Government agency w/fiduciary responsibility
• Designee of an agency described above
(except federal agencies)
• Family member
• 20 CFR 404.2021(b), 416.621(b), POMS GN
00502.105
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Who is Barred from Serving as
Representative Payee?
• Individual convicted of violation under §§208,
811, 1632 of the Social Security Act
– These §§, codified at 42 USC §§408, 1011, 1383a,
all involve fraud or similar fault
• Individual receiving benefits with a
representative payee.
• 20 CFR 404.2022, 416.622, POMS GN
00502.132 - .135
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Who is Barred from Serving as
Payee, Unless the Bar is Waived?
• Convicted of an offense resulting in
imprisonment for 1 year plus. Waived if no risk
to beneficiary & appt is in best interest.
• Previously misused benefits as payee. Waived
on case by case basis, if in best interest.
• Creditors, where no substantial conflict, risk.
• 20 CFR 404.2022, 416.622, POMS GN
00502.132 - .135
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Conditional Payee Appointments
• SSA may appoint a payee conditionally if SSA
has doubts about the intentions of an
otherwise qualified payee applicant.
• SSA reviews the conditional payees
performance in 3 month increments.
• Depending on the result of the review(s) SSA
may appoint the payee or develop for a
different payee.
• POMS GN 00502.183B.2.
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Use of benefits
• Beneficiary’s current maintenance first:
shelter, food, clothing, medical, comfort items
• TANF household – OK to make benefits
available to assistance unit
• Support of legal dependents- if beneficiary’s
current maintenance needs met
• 20 CFR 404.2040, 416.640, POMS GN
00602.000 et seq.
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Use of Benefits
• Creditor claims – payment not required if debt
arose prior to payee appt. Can pay only if
current & reasonably foreseeable needs met.
• Institutional care – if beneficiary in
government or private institution, customary
charges for care can be paid, as well costs for
recovery and personal needs.
• 20 CFR 404.2040, 416.640, POMS GN 00602.000 et
seq., GN 00603.000 (Conservation).
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Improper Use of Benefits
• Improper use is an expenditure on the
beneficiary that is unwise, not in best interests
• SSA should discuss the rules with the payee
and better expenditures
• If payee agrees to change, follow up in 3
months
• If no change, develop for successor payee
• POMS GN 00602.130
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Misuse of Benefits
• Misuse = misappropriation of benefits by the
payee – when benefits are neither spent on
nor conserved for the beneficiary
• Report misuse/other failure in payee duties to
SSA. Anyone can make the report.
• SSA should investigate & stop benefit payment
to the payee if substantiated
• 42 USC 405(j)
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Liability for Misused Benefits
• The general rule - SSA is required to repay
misused benefits only where SSA was
negligent in appointing the payee, failing to
respond to complaints of misuse, or
monitoring.
• 20 CFR 404.2041(a),(c), 416.641(a),(c)
• Negligence, but not misuse, determinations
may be appealed.
• 20 CFR 404.902(x), 416.1402(o),POMS GN
00503.110
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Liability for Misused Benefits
• The Social Security Protection Act of 2004
expanded SSA’s obligation to repay benefits
misused by organizational payees and
individual payees serving 15 or more.
• Benefits must be reissued where these payees
converted benefits for use by other than the
beneficiary.
• 20 CFR 404.2041(b), 416.641(b),POMS GN
00604.065, GN 00604.070
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Suspension of Benefits Pending
Payee Appointment
• When no suitable payee is available, SSA must
pay monthly (only) benefits to the beneficiary
directly while the payee search continues.
• Unless SSA determines that direct payment
would result in substantial harm.
• Even then, SSA can suspend for only 30 days,
unless the recipient has a DAA condition, is a
minor, or has been adjudicated incompetent.
• 20 CFR 404.2011, 416.611, POMS GN
00504.105.
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Qualifying to Receive Benefits
Without a Payee
• A beneficiary whom SSA has determined
incapable and in need of a payee can request
to have his/her capability redetermined.
• SSA will interview the beneficiary face to face
and will contact the current payee
• The beneficary should present medical, other
professional and/or lay evidence of ability to
manage benefits in his/her best interests.
• POMS GN 00502.025, .030, .050.
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Other Rep. Payee Topics
• Conservation and investment of benefits. 20
CFR 404.2045, 416.645.
• Transfer of conserved/invested benefits when
payee changes. 20 CFR 404.2060, 416.660.
• Representative Payee accounting. 20 CFR
404.2065, 416.665.
• Compensation for qualified orgs serving as
rep. payees. 20 CFR 404.2040a, 416.640a.
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Resources
• Statute: 42 USC 405(j), 1383(a)(2)(3)
• Regulations: 20 CFR 404.2001 et seq., 416.601 et seq.
• POMS: GN 00500.000 et seq., Payee Selection, GN
00600.000 et seq., Use of Benefits
• SSA’s Website, Representative Section,
http://www.socialsecurity.gov/payee/index.htm
– Info for beneficiaries
– Info for individual payees
– Training, guide & best practices for organizational payees
– Guide for managing someone else’s money
– Online payee accounting
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