If you are caring for an elderly parent who is no longer able to handle his or her finances or you are handling Social Security funds for your minor child who is entitled to benefits because of disability, the death of your spouse, or your reaching full retirement age or otherwise becoming eligible for Social Security, you may come into contact with Social Security Administration requirements for “representative payee,” often shortened to the term “rep payee.”
Representative payee status can be confusing. Often adult children believe that representative payee is the same as power of attorney. It is not. The Social Security Administration does not accept a mere power of attorney but requires a separate process. An agent under power of attorney still needs to act in the best interest of the person who gave it to her and spend the funds for that person’s benefit but a representative payee is something more.
Here are some commonly asked questions. For greater detail, you may also consult the Social Security Administration website at www.ssa.gov/payee/.
What is a Representative Payee? The term refers to an individual or an organization that receives Social Security and/or Supplemental Security Income (SSI) payments on behalf of someone else who cannot manage or handle his or her own funds either due to incapacity or because he or she is a minor.
You can apply to be a representative payee by contacting your local Social Security office and submitting an application, Form SSA-11-BK. You may need to participate in a face to face interview to be approved.
What are the responsibilities? Required duties include the following.
How Can the Benefits Be Used? You cannot be paid for your duties as Representative Payee or use a beneficiary’s money for your personal expenses. You cannot put a beneficiary’s Social Security or SSI funds in your or another’s account. However, you can be reimbursed for out-of-pocket expenses that you advance for the beneficiary. If you do this, you should keep records of the expense.
The Social Security Administration recommends that the funds be used for current needs of the person you are representing such as food, clothing, shelter and medical needs or conserved or invested in interest bearing accounts or in savings bonds.
If the beneficiary is receiving care in a facility and is not on Medicaid or is not in a Medicaid certified facility, then the SSA states that the highest priority should be given to the beneficiary’s current maintenance including not just institutional charges but payment for items that will aid in recovery or release from the facility or improving the beneficiary’s condition while there. This could include temporarily maintaining the beneficiary’s residence and, in some cases, assistance with dependent spouse or children.
Where Medicaid is or may become involved, matters can become more complicated. The Medicaid certified institution might become representative payee or, if you continue to handle the accounts, you need to coordinate with Medicaid income and asset requirements. SSI recipients are limited regarding the amount permitted to remain in their account, generally $2,000 for individuals, $3,000 for couples. If you have questions regarding use of the funds, check with the Social Security Administration. As Representative Payee you are acting in a trusted position. You are a fiduciary. Funds improperly paid or handled could be ordered returned or there could be civil or criminal liability.
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.