Social Security Representative Payees & Related Legal Issues
Some recipients of Social Security disability benefits lack the capacity to manage their finances on their own. In this case, the Social Security Administration may need to appoint someone else to receive and manage the benefits on behalf of the recipient. A representative payee may be an individual or an entity. Often, a family member or friend of the recipient fulfills this role, but the SSA will need to approve any application. A person who already assists a person with a disability as an agent under a power of attorney or another type of authorized representative does not become a representative payee automatically. They still must apply to the SSA for approval.
The Role of a Representative Payee
Once they assess the needs of the recipient, the representative payee should use the benefits to meet their needs. If there are leftover funds, the representative payee should place them in an interest-bearing account or savings bonds so that they can help the recipient meet their future needs. If the recipient receives payments to which they were not entitled, the representative payee should return these funds to the SSA. The representative payee should carefully document payments issued to the recipient and how they were allocated.
In addition, a representative payee may need to communicate with other entities on behalf of the recipient. For example, they should tell the SSA about any changes in the condition of the recipient that could affect their eligibility for these benefits. A representative payee also may need to inform government agencies or health care providers about the benefits issued to the recipient. They may need to assist the recipient with getting treatment for their condition.
Limits on the Power of a Representative Payee
While a representative payee has broad authority in protecting the wellbeing of a recipient, some important limits still apply. A representative payee should not sign legal documents on behalf of a recipient, except for SSA documents. Unless they hold an authorization such as a power of attorney, they do not have the right to manage sources of income other than Social Security benefits on the recipient’s behalf.
A representative payee cannot fail to address the basic needs of a recipient, such as food, housing, and treatment, when they are allocating benefits to various uses. They also cannot use benefits to cover their own expenses. Generally, they cannot place benefits in an account that they own or that anyone other than the recipient owns. A representative payee cannot continue to control or manage payments if they have been removed from this position.
Removing a Representative Payee
If a recipient feels that they can start managing their own benefits, they will need to persuade the SSA that they are mentally and physically capable of handling this task. This might involve providing the SSA with a court order finding that they are competent or with a letter from their doctor explaining that their condition has improved to the point that they can manage their money. However, this process can be tricky because telling the SSA that a recipient’s condition has improved may cause the SSA to consider whether they are no longer eligible for benefits.
