As a Social Security Disability Lawyer I have handled many cases in which the relatives of the disabled person have asked that a family member be appointed to manage the claimant's funds. This request is usually made because the relatives feel that the claimant's disabling condition prevents him or her from adequately managing their benefits. A person who is appointed to receive and manage the funds of a claimant is called "a representative payee".
Unfortunately, there appears to be no clear cut rule used to appoint a representative payee. For example, there are no effective guidelines used to determine whether a person can manage his or her funds or whether the third party being appointed is trustworthy and knowledgeable enough to do the job properly. Just a few days ago, a study from the Institute of Medicine of the National Academies of Sciences, Engineering and Medicines raised concerns about the manner in which the Social Security Administration is handling the representative payee process. (For a copy of the report click here.)
At present time, approximately 3.5 million of the 16 million adults receiving SSDI benefits have a representative payee. The report found that too few beneficiaries have a representative payee to ensure that funds are used properly. Other problems were also identified, for example the report found that in some cases beneficiaries who receive both SSI and SSDI have a representative for one program but not the other. Consequently, the study recommends that new rules be implemented by the Social Security Administration regarding the representative payee program.