What is a Representative Payee?

Arjun Kartha, via Freeimages.comThe Social Security Disability Insurance (SSDI) program offers benefits to qualifying individuals who are unable to work because of an injury, illness, or mental condition. The program provides monthly benefit payments, but some SSDI beneficiaries are not able to manage their financial affairs on their own for a variety of reasons. In such situations, the Social Security Administration (SSA) may appoint a representative payee (RP) to receive the beneficiary’s payments and see to the beneficiary’s basic needs. The SSA will make the determination that a beneficiary should have a representative payee. A disability examiner or administrative law judge (ALJ) might recommend an RP, the beneficiary may request a particular person, or an individual may request appointment as RP.

Who Might Need a Representative Payee?

In general, minor children and “legally incompetent” adults must have an RP. The parent(s) or guardian(s) of a minor beneficiary typically serve in this capacity. The SSA may make benefit payments directly to a minor beneficiary, however, if they “show the ability to manage the benefits,” such as by living independently, serving in the military, or establishing a track record of receiving and managing SSDI benefit payments.

The SSA presumes that an adult beneficiary is competent to manage their benefit payments and finances, but it may decide to appoint an RP based on medical records and other evidence. Conditions that might result in the appointment of an RP for an adult SSDI beneficiary include an intellectual or cognitive disability, an injury causing a mental impairment, dementia, physical injuries or disabilities rendering them particularly vulnerable to abuse or exploitation, or drug or alcohol addiction.

What Is the Representative Payee Program?

An SSDI beneficiary’s RP is their officially designated representative for benefit payments, as authorized by federal law. The RP’s job is to receive SSDI benefit payments on behalf of the beneficiary, and to see that they are used in the beneficiary’s best interest. RPs are required to provide periodic reports to the SSA regarding how they have used the benefit payments, as a means of guarding against exploitation and neglect.

Qualifying as a Representative Payee

Individuals and organizations may request appointment as an RP for a beneficiary. An SSA examiner must interview the RP candidate in person before making a final determination. Financial responsibility and the ability to act in the beneficiary’s best interest are key factors in the decision.

Certain people are ineligible to serve as RPs, such as people with convictions for Social Security fraud and people who previously served as RPs but had their status terminated by the SSA. Certain creditors of a beneficiary are also barred from serving as the RP for that beneficiary.

Duties of a Representative Payee

According to the SSA’s Inspector General, the duties and responsibilities of an RP include:

– Using the benefits in the beneficiary’s best interest;
– “Maintaining a continuing awareness of the beneficiary’s needs and condition,” especially if the RP and the beneficiary do not live in the same residence;
– Applying the benefits towards the beneficiary’s “current and reasonably foreseeable needs,” including food, shelter, clothing, hygiene, utilities, and medical and dental care;
– Providing written reports to the SSA of the receipt and expenditure of benefit payments;
– Returning overpayments and other excess funds to the SSA;
– Notifying the SSA of any changed circumstances that might affect the amount of benefits received by the beneficiary; and
– Notifying the SSA of changed circumstances affecting the RP’s ability to continue in that role.

Limitations on What Representative Payees Can Do

An RP essentially has a fiduciary duty to the beneficiary, meaning that they are obligated to act in the beneficiary’s interest and prohibited from acting in a way that benefits themselves to the beneficiary’s detriment. Use of benefit payments for the RP’s own personal expenses is prohibited, as is using the payments in any way that would leave the beneficiary’s needs unmet. The RP must keep benefit payments in a separate bank account and should not commingle benefit payments with the RP’s or a third party’s funds. Except when authorized by the SSA, an RP may not charge the beneficiary a fee for serving as an RP.

How to Dispense with the Need for a Representative Payee

Should a a claimant believe that circumstances have changed such that they no longer require a representative payee, they may certainly contact their local Social Security office and provide evidence that they are are now capable of managing their own funds.  Ordinarily, such proof would come in the form of a letter from their doctor (such as their primary care physician, their psychologist or psychiatrist) stating that the claimant is now capable of handling their own affairs.

You can get started on your SSDI claim and receive the advice and assistance you need regarding these issues and others by scheduling a free and confidential consultation with the Law Offices of Russell J. Goldsmith. Contact us today at 1-800-773-8622.

Web Resources:

A Guide For Representative Payees (PDF file), Social Security Administration, SSA Publication No. 05-10076, July 2015

More Blog Posts:

Hiring an SSDI Lawyer in Massachusetts and Other States: What to Consider, Social Security Disability Lawyer Blog, August 16, 2015

The Differences between SSI and SSDI in New Hampshire and Nationwide, Social Security Disability Lawyer Blog, August 16, 2015

Capitol Hill Hearings, Proposed Legislation Target Dual Collection of SSDI and Unemployment, Social Security Disability Lawyer Blog, August 2, 2015