Social Security Benefits Payee Rules

by Tom Streissguth

    If someone receiving Social Security retirement, disability or supplemental security income benefits is institutionalized, or unable to handle his money, he may have a representative payee handle payments and expenses for him. Social Security payees must follow the agency's rules and guidelines concerning the handling of benefits, and make regular reports on how the money is used to pay the beneficiary's expenses.

    Application

    The Social Security Administration does not automatically allow legal guardians, or those holding power of attorney, to act as a representative payee. All payees must file an application, known as a Request to be Selected as Payee or Form SSA-11. Along with the SSA-11 you must submit proof of identity and submit to a personal interview by a Social Security representative.

    Requirements

    If you are approved as a representative payee, you must act solely on behalf of the beneficiary. You will handle the monthly benefit payments and use them to meet the beneficiary's expenses, including food, shelter, utilities and medical care. You must keep records of these expenses and make annual reports to the Social Security Administration. If any money remains after paying expenses for the beneficiary, Social Security requires you to save it in an interest-bearing account in the beneficiary's name.

    Restrictions

    Although you are acting on behalf of a beneficiary, a representative payee is not the same as a legal representative. Unless she holds power of attorney or is acting as a court-appointed guardian, she may not sign any legal documents, other than Social Security forms and applications, for the beneficiary. Also, a payee does not have the authority to handle money other than Social Security benefits, and of course may not use the benefits for her own personal expenses or divert them to her own account. Payees may not charge a fee for their services unless Social Security authorizes it.

    Reporting

    Payees must report important events to Social Security. These include the death of the beneficiary, as well as any move to a new address or change in marital status. In the case of disability payments, the payee is responsible for reporting any change in the beneficiary's medical condition. If the beneficiary begins working, leaves the U.S. for more than a month, or is incarcerated or institutionalized, the payee reports it. If the beneficiary improves and becomes able to handle his own benefits, the payee must withdraw. Social Security will terminate a representative payee if the beneficiary can show good cause, such as fraud or the diversion of funds.

    Photo Credits

    • Making a financial plan image by Allen Stoner from Fotolia.com

    About the Author

    Founder/president of the innovative reference publisher The Archive LLC, Tom Streissguth has been a self-employed business owner, independent bookseller and freelance author in the school/library market. Holding a bachelor's degree from Yale, Streissguth has published more than 100 works of history, biography, current affairs and geography for young readers.

    Zacks Investment Research

    is an A+ Rated BBB

    Accredited Business.