Monday, July 15, 2013

SSDI/SSI Representative Payees: Rules to Remember

I often get phone calls from individuals, particularly parents, who serve as "Representative Payees" for Social Security Disability beneficiaries.  They ask me to give them information regarding their duties and responsibilities when they serve in this role.  I will use this blog to provide some basic information regarding the role of Representative Payees in the Social Security Disability Process.
A Representative Payee is an individual or organization appointed by SSA to receive Social Security and/or SSI benefits for someone who cannot manage his or her money. 
It is very important that a Representative Payee keep records of all the expenses incurred on behalf of the Social Security Disability beneficiary, even when the beneficiary is the child of the Representative Payee.  When the SSA requests a report, a payee must provide an accounting to the SSA of how the benefits were used or saved.
It is important to note that having a power of attorney, being an authorized representative or having a joint bank account with the beneficiary is not the same thing as being a Representative Payee.  These arrangements do not give legal authority to negotiate and manage a beneficiary's Social Security Disability and/or SSI payments.  Only persons or organizations that have applied and have been appointed by the Social Security Administration can act as Representative Payees.
As part of his or her duties, the payee should set up a separate bank account.  A checking account is probably best because this way the payee will be able to obtain cancelled checks and/or statements that show how the funds are spent.  When someone is a payee for a child, the Social Security Administration notifies the payee that the funds have to be placed in a dedicated account.  It is probably a good idea to ask the SSA how much money must be set up in this dedicated account.
It is extremely important for Representative Payee's to be aware that the Social Security Administration will send by mail a "Representative Payee Report" once  a year  and that it is important to accurately report all financial information to the Agency.  When the report is received, the Payee should either fill it out promptly and mail it back.  You can also complete the report online if you wish to.  However, you must keep a copy of for your records and have back up documentation showing how the money was spent throughout the year.