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SSA andRepresentative Payment: The Rules and Policies that Apply

This article discusses the rules and policies that apply to SSA and representative payees for beneficiaries, including the responsibilities of payees and the process for selecting a payee.

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SSA andRepresentative Payment: The Rules and Policies that Apply

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  1. SSA andRepresentative Payment: The Rules and Policies that Apply NDRNAnnual Conference June 5, 2014 Linda Landry Disability Law Center

  2. Representative Payee Policy • Every beneficiary has the right to manage his/her own benefits. • Unless s/he is a minor or has been adjudicated legally incompetent. • However, SSA may determine that a beneficiary’s interests are better served with a rep. payee. • 20 C.F.R. 404.2001, 416.601, GN 00502.010

  3. Representative Payee Responsibilities • Use benefits on behalf of beneficiary only. • Determine payment manner and purposes, under SSA guidelines. • Properly receive & account for benefits & expenditures. • Notify SSA of any change affecting benefits. • Submit accounting at SSA request. • Notify SSA of any change affecting performance. • 20 CFR 404.2035, 416.635, POMS GN 00600.000 et seq.

  4. Other Ways a Representative Payee Can Help • Help beneficiary establish a budget and make financial decisions. • Explain Social Security or SSI benefits. • Ensure beneficiary is aware of current and retroactive payments. • Help beneficiary find other services. • Negotiate with creditors and landlords. • Recommend another if/when can no longer serve. • POMS GN 00502.114B.

  5. Representative PolicyBeneficiary Under Age 18 • Beneficiary under age 18 must receive benefits through a rep. payee, unless s/he is: • Within 7 months of turning age 18 and is initially filing; • Receiving SSDI on own wage record; • Serving in the military; • Living alone & supporting self; • Parenting & experienced handling own finances; or • Capable and no qualified payee is available. • 20 CFR 404.2010(b), 416.610(b)

  6. Representative Payee PolicyBeneficiaries Over Age 18 • Beneficiaries determined legally incompetent must receive benefits through a rep. payee. • SSA may appoint the guardian or another person. • 20 CFR 404.2010(a), 416.910(a) • To be sure this applies, check extent of guardianship • SSA may determine that others are physically or mentally incapable of managing their benefits. • 20 CFR 404.2010(b), 416.910(b)

  7. Representative Payee PolicyDetermining the Need for a Payee • Court determination of legal incompetancy • Medical evidence • From medical professional based on recent examination of present condition • POMS GN 00502.025 • Other evidence must also be sought • Statements of relatives, friends and others • In a position to know and observe the beneficiary • POMS GN 00502.030, GN 00502.050

  8. Representative Payee PolicySelection Process • File SSA-11 – SSA takes online application • Face-to-face interview, unless impracticable • Advance notice to beneficiary of determination of need for payee and name of payee • Appeal within 10 days to stay the decision pending appeal • Provide evidence of ability to manage own benefits • Can provide evidence to dispute payee choice • Rep payee applicant cannot appeal denial of application • Beneficiary can apply to be own payee at any time • 20 CFR 404.2024, 404.2030, GN 00502.007, GN 00503.100 , GN 00503.110A.2.

  9. Representative Payee PolicyConsiderations in Selection • Relationship to the beneficiary • Interest shown in the beneficiary • Legal authority over the beneficiary • Custody of the beneficiary • Whether the potential payee is in a position to know of and look after the needs of the beneficiary. • 20 CFR 404.2020. 416.620, POMS GN 00502.130

  10. Order of Preference Beneficiaries Under Age 18 • Natural/adoptive parent • with custody, or a guardian • w/out custody, contributing to support & demonstrating strong concern • w/out custody, not contributing but demonstrating strong concern • Relatives or friends contributing or demonstrating concern • Social agency or custodial institution • 20 CFR 404.2021(c), 416.621(c), POMS GN 00502.105

  11. Order of Preference Beneficiaries Age 18 and Older • Legal guardian, spouse w/custody or demonstrating strong concern • Friend w/custody or demonstrating strong concern for beneficiary’s welfare • Public/nonprofit agency/institution w/custody • For profit institution w/custody • Others qualified & willing to serve as payee • 20 CFR 404.2021(a), 416.621(a), POMS GN 00502.105

  12. Order of PreferenceDrug Addition or Alcoholism • Community-based nonprofit service agency • Government agency w/social service or health care mission • Government agency w/fiduciary responsibility • Designee of an agency described above (except federal agencies) • Family member • 20 CFR 404.2021(b), 416.621(b), POMS GN 00502.105

  13. Who is Barred from Serving as Representative Payee? • Individual convicted of violation under §§208, 811, 1632 of the Social Security Act • These §§, codified at 42 USC §§408, 1011, 1383a, all involve fraud or similar fault • Individual receiving benefits with a representative payee. • 20 CFR 404.2022, 416.622, POMS GN 00502.132 - .135

  14. Who is Barred from Serving as Payee, Unless the Bar is Waived? • Convicted of an offense resulting in imprisonment for 1 year plus. Waived if no risk to beneficiary & appt is in best interest. • Previously misused benefits as payee. Waived on case by case basis, if in best interest. • Creditors, where no substantial conflict, risk. • 20 CFR 404.2022, 416.622, POMS GN 00502.132 - .135

  15. Conditional Payee Appointments • SSA may appoint a payee conditionally if SSA has doubts about the intentions of an otherwise qualified payee applicant. • SSA reviews the conditional payees performance in 3 month increments. • Depending on the result of the review(s) SSA may appoint the payee or develop for a different payee. • POMS GN 00502.183B.2.

  16. Use of benefits • Beneficiary’s current maintenance first: shelter, food, clothing, medical, comfort items • TANF household – OK to make benefits available to assistance unit • Support of legal dependents- if beneficiary’s current maintenance needs met • 20 CFR 404.2040, 416.640, POMS GN 00602.000 et seq.

  17. Use of Benefits • Creditor claims – payment not required if debt arose prior to payee appt. Can pay only if current & reasonably foreseeable needs met. • Institutional care – if beneficiary in government or private institution, customary charges for care can be paid, as well costs for recovery and personal needs. • 20 CFR 404.2040, 416.640, POMS GN 00602.000 et seq., GN 00603.000 (Conservation).

  18. Improper Use of Benefits • Improper use is an expenditure on the beneficiary that is unwise, not in best interests • SSA should discuss the rules with the payee and better expenditures • If payee agrees to change, follow up in 3 months • If no change, develop for successor payee • POMS GN 00602.130

  19. Misuse of Benefits • Misuse = misappropriation of benefits by the payee – when benefits are neither spent on nor conserved for the beneficiary • Report misuse/other failure in payee duties to SSA. Anyone can make the report. • SSA should investigate & stop benefit payment to the payee if substantiated • 42 USC 405(j)

  20. Liability for Misused Benefits • The general rule - SSA is required to repay misused benefits only where SSA was negligent in appointing the payee, failing to respond to complaints of misuse, or monitoring. • 20 CFR 404.2041(a),(c), 416.641(a),(c) • Negligence, but not misuse, determinations may be appealed. • 20 CFR 404.902(x), 416.1402(o),POMS GN 00503.110

  21. Liability for Misused Benefits • The Social Security Protection Act of 2004 expanded SSA’s obligation to repay benefits misused by organizational payees and individual payees serving 15 or more. • Benefits must be reissued where these payees converted benefits for use by other than the beneficiary. • 20 CFR 404.2041(b), 416.641(b),POMS GN 00604.065, GN 00604.070

  22. Suspension of Benefits Pending Payee Appointment • When no suitable payee is available, SSA must pay monthly (only) benefits to the beneficiary directly while the payee search continues. • Unless SSA determines that direct payment would result in substantial harm. • Even then, SSA can suspend for only 30 days, unless the recipient has a DAA condition, is a minor, or has been adjudicated incompetent. • 20 CFR 404.2011, 416.611, POMS GN 00504.105.

  23. Qualifying to Receive Benefits Without a Payee • A beneficiary whom SSA has determined incapable and in need of a payee can request to have his/her capability redetermined. • SSA will interview the beneficiary face to face and will contact the current payee • The beneficary should present medical, other professional and/or lay evidence of ability to manage benefits in his/her best interests. • POMS GN 00502.025, .030, .050.

  24. Other Rep. Payee Topics • Conservation and investment of benefits. 20 CFR 404.2045, 416.645. • Transfer of conserved/invested benefits when payee changes. 20 CFR 404.2060, 416.660. • Representative Payee accounting. 20 CFR 404.2065, 416.665. • Compensation for qualified orgs serving as rep. payees. 20 CFR 404.2040a, 416.640a.

  25. Resources • Statute: 42 USC 405(j), 1383(a)(2)(3) • Regulations: 20 CFR 404.2001 et seq., 416.601 et seq. • POMS: GN 00500.000 et seq., Payee Selection, GN 00600.000 et seq., Use of Benefits • SSA’s Website, Representative Section, http://www.socialsecurity.gov/payee/index.htm • Info for beneficiaries • Info for individual payees • Training, guide & best practices for organizational payees • Guide for managing someone else’s money • Online payee accounting

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