Understand the Duties, Responsibilities of a Representative Payee

When a loved one begins to lose the ability to manage their finances, family members are often faced with decisions about how to provide assistance while protecting that person’s financial well-being.  Many people assume that having a Durable Power of Attorney automatically gives them the authority to manage Social Security payments.  Unfortunately, that is not the case.

The Social Security Administration (SSA) has its own process for determining who may receive and manage benefits on behalf of another person.  When a beneficiary is unable to manage their own benefits because of age, illness, disability or cognitive impairment, the SSA may appoint a representative payee to receive and administer those payments.

Does Your Family Member Need a Representative Payee?

When an individual has an intellectual disability or develops a condition, such as dementia, Alzheimer’s disease, or a serious mental illness that limits their ability to manage money safely, a representative payee may become necessary.  

The SSA determines whether a beneficiary needs a representative payee based on medical evidence and other information about the person’s ability to manage finances.  The agency’s goal is to ensure the Social Security benefits are used to meet the beneficiary’s needs while protecting them from financial exploitation or misuse.

Many families discover the need for a representative payee when they attempt to change the bank account where Social Security benefits are deposited.  Even if you have a valid Durable Power of Attorney, you cannot change the direct deposit information for someone’s Social Security benefits unless you have been appointed as the beneficiary’s representative payee by the SSA.  

How Do I Become a Representative Payee?

In order to become a Representative Payee, you must apply through the Social Security Administration.  The process includes completing  Form SSA-11 Request to be Selected as Payee, scheduling  an appointment with your local Social Security office, and providing supporting documentation such as your driver’s license and social security card to prove your identity.  The SSA reviews each application to determine whether appointing a representative payee is in the beneficiary’s best interest.

What Are the Responsibilities of a Representative Payee?

Serving as someone’s representative payee is an important fiduciary responsibility.  It is much more than simply receiving a monthly Social Security check.  As fiduciary the representative payee has a legal and ethical obligation to act solely in the best interest of the beneficiary.  Once appointed, you are legally obligated to manage the beneficiary’s Social Security payments and use those funds to meet their needs.  Funds should be used to meet the person’s essential needs, including housing, food, clothing, medical care and other necessary expenses.  

Representative payees are also responsible for maintaining accurate financial records.  The SSA requires periodic reporting to ensure benefits are being used appropriately and in the beneficiary’s best interest.

Representative Payees may not use the funds in the payee’s account to cover their own personal expenses or deplete the funds in a way that would leave the beneficiary unable to meet basic living needs.  Additionally, the beneficiary’s funds should be kept separate from the payee’s personal finances and should not be comingled with anyone else’s funds.  

To obtain more information about what it means to be a Representative Payee, you can review the Social Security Administration’s publication, A Guide for Representative Payee, available on the SSA website.

You may visit our website at www.wrightabshire.com. Nothing contained in this publication should be considered as the rendering of legal advice to any person’s specific case but should be considered general information.