No matter what state you live in, the Department of Veterans Affairs and the Social Security Administration require all Representative Payees—those appointed to receive benefits for someone who is unable to manage their money—to obtain a surety bond in order to fulfill their duties. Representative payee bonds generally need to be obtained before a person can begin to administer SSA and VA benefits, so it’s essential to get them as soon as they are required.
Who Can Be Made a Representative Payee
As stated by the SSA, family members tend to get immediate preference when it comes to becoming a representative payee. If no family member is able and willing to take on the responsibility of becoming a representative payee, a qualified organization or other individual (a close friend or associate) can also be appointed.
In addition to the primary person set to be the representative payee, the SSA also allows for up to three individuals to be designated, should the need arise.
Changes to Who Must Complete an Annual Report
The largest update released by the SSA is that, according to changes in the law, the organization is no longer requiring a few types of representative payees to complete an annual Representative Payee Report. These individuals, according to the SSA website, are as follows:
- Natural or adoptive parents of a minor child beneficiary who primarily reside in the same household as the child
- Legal guardians of a minor child beneficiary who primarily reside in the same household as the child
- Natural or adoptive parents of a disabled adult beneficiary who primarily reside in the same household with the beneficiary
- The spouse of a beneficiary
NOTE: All representative payees, including those listed above, must still keep records of how payments are spent or saved. All records must also be available for review if requested by SSA, so it’s still important for those who have been appointed as a representative payee to keep a stable accounting of all benefits received, spent, saved, etc. It’s always helpful to keep a record of all receipts, bills, statements, and any other financial document related to the benefits administered.
The SSA has a full guide for Representative Payees available on their website. The guide can be found here.
Getting a Representative Payee Bond
Representative Payee bonds help protect the beneficiary as well as the SSA or VA from theft or mismanagement of funds, so they are still required in most cases. Getting these bonds can be complicated, but the process is easy if you work with the right agency. To get started on a 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.