Being a representative payee is a great way to provide for a close loved one, and while getting the position is not a highly complicated process, there are several challenges associated with being a representative payee that people should be prepared for.
What is a Social Security Representative Payee?
A social security representative payee is a person who has been appointed to administer the benefits provided by the Social Security Administration (SSa), Supplemental Security Income (SSI) payments, or Veteran’s Affairs (VA) when the recipient or recipients are not able to manage the assets themselves (usually due to illness, youth or disability). Representatives payees are generally family members or close friends, but qualified organizations can also assume responsibility for the role.
Learn more about being a social security representative payee at the SSA website.
These are the challenges of being a representative payee.
Understanding the Role
As a representative payee, you have a specific duty to fulfill, and there will be specific things that will be expected of you once you have taken the role. It’s important to understand the position, what will be expected of you and the limitations of your power in the position.
For example, some representative payees are required to fill out an annual Representative Payee Report. You will also need to keep detailed records of how the payments are being spent or saved. These records must be kept up to date and made available should they be requested by the SSA.
If you are uncertain as to what your responsibilities or limitations are, you should contact the SSA or speak with an attorney.
Keeping Track of the Funds
As a representative payee, you will be in charge of keeping track of a steady stream of funds coming from the SSA or SSI. It’s important to keep strict track of these funds and ensure they are either put to good and proper use (based on SSA and SSI rules) or saved accordingly.
One major mistake many people make is mixing the funds they receive from SSA, the VA, or SSI with funds from other accounts, whether the accounts are owned by the representative payee or the protected person. If you are going to be using a bank account for these funds, it’s usually best to create a separate account the has the protected person’s name on the title.
Spending Funds on Approved Expenditures
The funds received from SSA and SSI must be used to pay for necessities for the protected person. These types of items can include mortgage or rent, food and clothing, utility bills, medical expenses, and personal care items. Leftover funds can generally be used for things like education, past-due bills and some other expenses. Anything else that is not spent should be saved in some type of interest-bearing account.
Reporting Changes to the SSA
There are several life changes that must be reported to the SSA, which include any of the following life events for a protected person:
- Marriage
- Death
- Moving
- Changes in roommates
- Being placed in a hospital, care center or other institution
- Gains or loses employment
- Is convicted of a crime
- Begins to receive child support or benefits from another organization
- Has a change in their disability or condition
Obtaining a Representative Payee
It’s not uncommon for people to have been placed into the role of a representative payee to be required to obtain a surety bond. If you need a personal representative payee bond, contact The Patrick J. Thomas Agency today.
Disclaimer: this is for informational purposes only and is not intended to be legal advice. If you need legal counsel, please contact an attorney directly.