It’s common to associate Social Security benefits with our comfort and peace of mind in retirement, but there’s another little-known aspect to the program. The Social Security Representative Payee program is a useful tool for anyone who cares for a loved one who are unable to manage their own retirement, spousal, child, parent, or disability payments. With many Americans living longer, this vital feature needs more attention to ensure those who need assistance, get it.
The program isn’t just for the retired, however. Of the 6 million people with representative payees, 500,000 are older beneficiaries. The rests are children or the disabled.
What Is This Program?
While a durable power of attorney agreement can ensure that money matters are handled by a trusted loved one, the Social Security checks still come in the name of the beneficiary. This is when the Representative Payee program comes in handy. Authorized in 1939 by members of Congress, the program authorizes representatives for beneficiaries who are incapable of making decisions regarding their income. Rather than assigning government employees to the task, it is entrusted to caregivers, family members, and loved ones. They take on the role of representatives from the program. In the cases of many ailments that are common later in life and compromise executive function – such as dementia or Alzheimer’s – the program can be a lifeline to keeping benefits for the recipient secure and used in the way most likely to ensure their quality of life.
Once a designation is made, the representative is responsible for keeping records of how the money is spent. It’s especially important that someone who is both trustworthy and respected by the beneficiary is chosen, as it can sometimes be hard to take away the responsibility of money management. For those who survive solely on Social Security benefits, this program can ensure the most important budget needs are met first.
What If There Is No One to Help?
While it’s ideal for relatives or close friends to be appointed as a payee in place of the beneficiary, it’s not always possible. It can also be a burden, as reporting must be filed annually listing every single expenditure resulting from the benefit payment. Those without family to help can still get assistance from a qualified organization authorized by the Social Security Administration. Through the training and resources provided by the government, it’s possible to equip those in the community to help take over care of this essential financial duty.
Additional Considerations for Representatives
For those who are concerned about diminishing capacity in old age, this program provides a solution for one of the most precious assets many Americans have in retirement. There are a few things that representatives should be aware of when applying to help, however. In addition to the annual reporting requirement, they are subject to additional review. They may have to interview with the agency overseeing the program, provide financial records beyond the annual report, or open their home or the home of the beneficiary for inspection. These reviews are not typical, but if elder abuse is suspected, they provide an extra layer of accountability.
If your loved one is showing signs of difficulty when handling financial tasks, it may be time to step in and help. While just one aspect of the overall transition plan for those who need one, this representative option diminishes the risk that benefit funds will be lost or stolen. To get started, contact your closest Social Security office and complete form SSA-11 as a payee. You will be asked to provide proof of your identity and interview in person.
It is critical to note that it is illegal to collect fees for a beneficiary for your role as a payee. While some organizations and community groups have been approved to collect a small amount to cover their administrative costs for this task, individuals are not usually eligible for payment of any kind. You may, however, reimburse yourself for legitimate costs of the beneficiary, provided it’s listed and accounted for in the annual report.
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This information is not intended to be legal or tax advice. The author can provide information, but not advice related to social security benefits. Clients should seek guidance from the Social Security Administration regarding their particular situation. Social Security benefit payout rates can and will change at the sole discretion of the Social Security Administration. For more information, please consult a local Social Security Administration office, or visit www.ssa.gov.
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