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EDDY & SCHEIN FINANCIAL LITERACY SERIES

Representative Payees for Social Security

Here’s how Advance Designation works.

Did you know that the Social Security Administration (SSA) does not recognize a person’s Power of Attorney document?

If a recipient of Social Security needs someone to represent them with the SSA, a Representative Payee needs to be appointed by the SSA.

Who can be a Representative Payee?

A family member, friend, legal guardian, lawyer, social service agency, or nursing home can apply to be appointed.

What is the role of a Representative Payee?

The Representative Payee manages Social Security benefits to pay for the needs of the beneficiary, keeps records of expenses, and provides an accounting to the SSA when requested.

What happens if a person receiving Social Security benefits outlives their Representative Payee?

This recently happened to a client of Eddy & Schein Group.

Our client, Jan, who has Alzheimer’s Disease, had a Representative Payee appointed as a result of a fraud incident. When Eddy & Schein discovered that her Social Security payment was diverted to another person’s account, Jan’s agent under Power of Attorney asked the SSA to investigate the fraud and recover the missing funds. Because Jan was not able to represent herself, the only way the SSA would proceed was by having the agent become Jan’s Representative Payee. From then on, all correspondence went to the Representative Payee (who was also her agent under Power of Attorney).

The Representative Payee recently passed away. Because his Social Security number is linked with Jan’s in the Social Security system, it quickly became known to the SSA that Jan’s Representative Payee was deceased. The impact was two-fold:

  • The SSA stopped the direct deposit of Jan’s Social Security benefits into her checking account since it was deemed by the SSA that no one was managing Jan’s funds.
  • Medicare B premiums were not being paid since they came out of Jan’s Social Security benefits. A bill was sent to the Representative Payee’s address for the two months of premiums due and it was not acted on. To prevent Medicare B insurance from being canceled, the overdue and ongoing premiums will need to be paid from a separate source of Jan’s funds until a new Representative Payee gets appointed.

What is the process to get a new Representative Payee appointed?

In working with Jan’s new agent under Power of Attorney, we called the SSA to learn about the process to get the new agent assigned as the Representative Payee.

  • The proposed Representative Payee needs to make an initial phone call to the SSA, at which time the SSA will schedule an interview appointment for a future date.
  • During the phone interview, the proposed Representative Payee needs to share his/her own and Jan’s Social Security number and the name and contact information of Jan’s primary care physician, among other things.

How can you plan ahead with an Advance Designation of Representative Payees?

While making sure you have your other legal documents in order, you may also want to plan for the possibility of needing a Representative Payee and do an Advance Designation. The SSA offers the option to designate up to three individuals in advance who could serve as Representative Payee for you if the need arises. When the time comes, the SSA would evaluate your choices and determine suitability. You can change your designations at any time by clicking this on the SSA’s Advance Designation page.

If you need any help working with the SSA or considering who should be chosen for Advance Designation, please contact Eddy & Schein Group.

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