What Is the Purpose of a Social Security Payee?
- When a representative payee receives payment for a Social Security or Supplemental Security Income recipient, he must use the benefits received to pay for the recipient's current and future needs. In addition, the representative payee should establish a method to save and protect any unused benefit funds. The representative payee must also have the capability of preparing and maintaining appropriate records for the beneficiary and the SSA.
- A representative payee must use benefit funds to pay for food and shelter. The representative payee may use any money left over after these basic needs are met for dental or medical care not covered by insurance, or for recreation and clothing for the beneficiary. According to the SSA, the payee must save leftover benefits. Additionally, the SSA suggests that the payee hold extra funds in an interest-bearing account or by investing in U.S. Savings Bonds. The representative payee must make a yearly accounting of all funds paid out on behalf of the beneficiary. The SSA sends a form that the payee must complete and return. As an alternative, the payee may fill out the form online at the SSA website.
- As a representative payee, you must report certain changes of circumstances that may affect the recipient's Social Security or SSI monthly benefit amount. Some of the things you must report as payee include: a beneficiary's change of address; medical condition improvements for a beneficiary who collects disability payments; child custody changes or an adoption; imprisonment of a beneficiary, if the crime involves a sentence of more than one month; or if the beneficiary dies. Special circumstances apply to SSI benefits, including a move involving the beneficiary that includes a hospital, nursing home or correctional facility; the marital status of the beneficiary; movement of a person in or out of the beneficiary's home; or a change in income or resources for either the beneficiary or her spouse. If the representative payee fails to report these incidents, and other occurrences required by the SSA, the representative payee becomes responsible for repayment of the benefits overpaid.
- Generally, the SSA appoints a relative, friend or other interested party as representative payee. In most cases, the SSA does not compensate the representative payee for services rendered. Exceptions to the rule include: SSA authorization for collection of fees, or if the payee is recognized by the court as the beneficiary's legal guardian and the court authorizes a fee for services. A power of attorney does not authorize managing of a recipient's benefits. A representative payee handles only Social Security benefits; he does not have authority to handle other personal affairs of the beneficiary. Set up a separate account to receive and dispense benefits. Do not commingle personal funds and the benefit funds.
