Eddy & Schein can help you understand Social Security.

Social Security and Representative Payees

April has been designated as “Social Security Month.” To bring awareness to this important income source, we would like to share a client’s story and provide some information about Social Security.

Joanne was in a nursing home, and it seemed as though she would not be able to leave any time soon. Eddy & Schein Group was called upon to aid in the successful effort to bring her home. At that time, Gideon Schein was appointed her agent under power of attorney.

When we onboard a new client, one of our initial activities is to identify sources of income. In doing so, we determined that Joanne was no longer receiving her Social Security checks. When we asked where they were going, the Social Security Administration (SSA) told us they could not speak to us, since we were not her representative payee, nor would they tell us who the representative payee was.

Gideon went to the SSA with Joanne’s elder law attorney and learned that Joanne’s Social Security income was being paid to the nursing home and that the nursing home was the representative payee. Gideon needed to apply to become Joanne’s new representative payee in order to instruct Social Security to pay her directly, especially since she had returned to her apartment by this time.

Social Security is an important source of income for many retired Americans and is generally managed similarly to any other income source. The Social Security Administration presumes an adult is capable of managing his or her own benefits. However, once a loved one becomes either temporarily or permanently “incapacitated,” the rules change dramatically.

The Treasury Department does not recognize a power of attorney for negotiating federal payments, including Social Security or Supplemental Security Income (SSI) checks. This means, if you are acting as an agent under power of attorney for someone who is incapable of managing his or her own benefits, you must apply to serve as his or her representative payee for Social Security. With this designation, you will be able to endorse/deposit or spend the funds from Social Security. A representative payee is a person or an organization approved by the Social Security Administration (SSA) to receive the Social Security or SSI benefits for a recipient who cannot manage or direct the management of his or her benefits. Once declared a representative payee, a person or organization is then able to use the funds for basic needs of the Social Security recipient—housing, utilities, food, and other necessities. The representative payee will be required to file regular reports detailing the use of the recipient’s funds. Through the SSA website, a representative payee may also create online access to track payments and collect subsequent tax forms from Social Security.

Some things to be aware of are:

  • No individual may receive payment for acting as a representative payee. However, certain qualified organizational payees may be approved in writing by Social Security to collect a fee.
  • If necessary, the appointed representative payee can be changed to another person or organization as happened in the case of Joanne.
  • When acting as an agent under Power of Attorney for someone, it is important to become familiar with the Social Security benefits regulations as they regard representative payees.

If you have questions about becoming a representative payee, you may call us at 212-987-1427, or the SSA 1-800-772-1213 between 7 A.M. and 7 P.M. on business days, or contact your local Social Security office between 9 AM and 4 PM on business days. And, you can find answers to many questions by visiting  www.socialsecurity.gov/payee



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Eddy & Schein Group helps:

Seniors and their Families
People Facing Life Transitions
High-Net-Worth Individuals
Young Adults and Families
Legal & Tax Professionals
and their Clients
Tell us what you need.
Call for a free phone consultation.

Serving the Tri-State Area

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