A representative payee is a person or an organization appointed by the Social Security Administration (“SSA”) to receive and manage Social Security income or Supplemental Security Income  (“SSI”) payments on behalf of a beneficiary whom the SSA has determined cannot manage their own income or who is susceptible to undue influence. 

Representative payees are appointed by the SSA based on an application.  Usually the representative is the beneficiary’s family member or friend, but it can be an organization.  The SSA gives preference to beneficiary’s nomination.   

The representative payee should someone who is involved with the beneficiary’s current personal needs.  The same person who serves as the beneficiary’s agent  under a power of attorney, or as trustee of the beneficiary’s special needs trust, may also become the representative payee, upon SSA’s certification.  

On its website, the SSA says that, “[a] payee’s main duties are to use the benefits to pay for the current and future needs of the beneficiary, and properly save any benefits not needed to meet current needs. A payee must also keep records of expenses. When we request a report, a payee must provide an accounting to us of how he or she used or saved the benefits.” www.ssa.gov/payee/faqrep.htm

Once appointed, the representative payee should open and manage a joint bank account as representative payee in the beneficiary’s name, meet regularly with the payee to determine all the beneficiary’s current needs are met, pay the beneficiary’s current expenses on a timely and regular basis, and make sure that the account does not exceed the applicable resource limit if the beneficiary receives SSI and/or Medi-Cal.   The SSA’s “A Guide For Representative Payee” is available online.

A representative payee may spend funds “only for the use and benefit of the beneficiary,” after considering what the payee determines to be in, “the [beneficiary’s] best interests.” 20 CFR §404.2035(a); Program Operations Manual System [POMS] GN 00602.001(A)(1).  That includes paying for, “cost[s] incurred in obtaining food, shelter, clothing, medical care, and personal comfort items.” 20 Code of Federal Regulations §404.2040(a); POMS GN 00602.001–GN 00602.140.

The representative payee also has the following administrative/reporting duties, as listed on the SSA’s website:  “Report any changes or events which could affect the beneficiary’s eligibility for payments; Keep records of all payments received and how you spent and saved them; Provide all records of how payments are spent or saved to SSA upon request; Report to SSA any changes that would affect your performance or your continuing as payee; Complete reports accounting for your use of payments, as required.”

The representative payee, excluding spouses and parents who are payees, must report and account annually to the SSA for the use of the funds. 

The SSA acts to deter, detect and handle any abuse of payee funds by a representative payee.   To that end, “[t]he Commissioner of Social Security may require a report at any time from any person receiving payments on behalf of another, if the Commissioner of Social Security has reason to believe that the person receiving such payments is misusing such payments.”  42 USC §405(j)(3)(D). 

The SSA website tells payees that in addition to the annual report, “An SSA approved partner organization may conduct a review to determine if you have performed the following duties: Managed payments so the beneficiary(ies) have no unmet current needs; Accounted for all payments received and spent; Conserved any unspent payments in an appropriate manner; and Complied with representative payee accounting and reporting responsibilities.”

Beneficiaries who are dissatisfied with how much is spent on them are advised by the SSA to, “talk with [the] payee about how he or she spends [the beneficiary’s] money. [The] payee should show [the beneficiary] how much money [he or she] get[s] from Social Security or SSI and how much he or she spends on [the beneficiary’s] needs.” If abuse is suspected, then go to SSA’s website to report the matter to the Office Inspector General (SSA).

Dennis A. Fordham, attorney, is a State Bar-Certified Specialist in estate planning, probate and trust law. His office is at 870 S. Main St., Lakeport, Calif. He can be reached at Dennis@DennisFordhamLaw.com and 707-263-3235.

“Serving Lake and Mendocino Counties for nineteen years, the Law Office of Dennis Fordham focuses on legacy and estate planning, trust and probate administration, and special needs planning. We are here for you. 870 South Main Street Lakeport, California 95453-4801. Phone: 707-263-3235.”